A Model of Shoppertainment Live Streaming

“Shoppertainment” live streaming, a blend of entertainment and product selling, is becoming increasingly popular. In shoppertainment sessions, streamers face bandwidth constraints so balance between providing product information and entertainment (such as singing, dancing, and storytelling). We conceptualize a shoppertainment live streamer as a novel type of online retail platform that maximizes total commissions from selling a range of manufacturer products. Our study investigates how streamers can leverage entertainment bandwidth as a long-term strategy to influence manufacturers’ pricing decisions and consumers’ attendance, as well as purchasing behaviors. Our model reveals several intriguing findings. First, we find that higher entertainment bandwidth encourages more manufacturers to adopt a demand-oriented, low-pricing strategy to attract buyers rather than a margin-oriented, high-pricing strategy that appeals only to buyers who perceive a high likelihood of finding a suitable product. Second, we observe that an increase in entertainment bandwidth initially boosts consumer traffic to shoppertainment sessions, but this trend may reverse once the bandwidth becomes excessively high, indicating an inverted U-shaped relationship. Conversely, the streamer’s expected profit per attending consumer first decreases and then increases with higher entertainment bandwidth, forming a U-shaped relationship. Third, our results suggest that a commission-maximizing streamer facing bandwidth constraints should not exclusively focus on providing product information. Instead, it is advantageous to allocate significant bandwidth to entertainment, even with limited entertaining capability, and potentially beneficial to dedicate all bandwidth to entertainment if the capability is substantial. Lastly, we demonstrate that the streamer’s quality threshold moderates the impact of entertainment bandwidth on these dynamics. This paper was accepted by David Simchi-Levi, information systems. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.01724 .