In-Consumption Information Cues and Digital Content Demand : Evidence from a Live-Streaming Platform

Due to time constraints and search costs, consumers are unable to explore millions of pieces of digital content, such as e-books, music, and movies, before making consumption decisions. Previous studies have extensively scrutinized how pre-consumption information artifacts—e.g., online reviews, popularity charts, and previews—help reduce search costs for quality variation between products. However, little is known about search costs for utility-maximizing segments within digital content. Drawing on time allocation theory, we hypothesize that an in-consumption information cue (hereafter, ICIC), which depicts the time-varying quality of a digital product unobserved before consumption, can facilitate demand for that digital product. Leveraging a natural experiment wherein a live-streaming platform adopted engagement graphs—a visualized timeline of previous viewers’ liked moments appearing at the bottom of each video clip—on a video-on-demand (VOD) channel, we find that ICIC substantially increases VOD demand in terms of the number of unique videos watched and content providers explored. Furthermore, while integrating engagement graphs on the VOD channel has a positive spillover effect on live-streamed content, it discourages users from virtual gift-giving due to strained viewer-streamer relationships caused by a high volume of content hopping. We also discuss managerial implications for digital platforms and advertisers