The Power of Star Creators: Evidence from the Live Streaming Industry

The digital content market heavily relies on top talents, known as star creators, to produce high-quality content and attract consumers. We study the competition between star creators and non-star creators and explore the impact of a star creator's presence on the demand and supply of digital content. To test our theoretical predictions, we leverage two exogenous events that occurred on Twitch.tv to causally identify the star exit effect. Consistent with our predictions, we find that the star exit leads to a decrease in content consumption in the star's focal live streaming category. Moreover, on the content supply side, we find a reduction in incumbent non-star creators' content creation effort as well as a drop in the number of related active streaming channels after the star exit. Lastly, our results reveal that the impact of star exit on overall content provision and consumption can persist over several months.