When Platform Governance Hurts: Content Moderation, Monetization, and Complementor Responses, joint with Raphaela Andres, Michelangelo Rossi, and Mark Tremblay.

Work-in-progress

Digital platforms orchestrate value creation in multi-sided ecosystems, yet their governance decisions shape how value is captured by complementors. This paper studies how complementors respond when a dominant platform’s governance intervention reduces monetization opportunities. We exploit the 2017 YouTube “Adpocalypse” during which advertiser boycotts prompted YouTube to tighten content moderation and restrict eligibility for its Partner Program, increasing monetization uncertainty for creators. While YouTube faces limited competition in audience discovery, many creators can bypass its advertising-based monetization layer by reallocating effort to Patreon, a membership-based platform that enables direct transactions with users. Using panel data on more than 11,000 Patreon creators from August 2017 to August 2018 and a difference-in-differences design, we compare multi-homing creators exposed to the shock to creators active only on Patreon. We find that exposed creators increase paid content production, attract more patrons, and experience substantial earnings growth. Engagement also rises for paid content, suggesting increased effort rather than mechanical effects. Effects are stronger for more popular creators and those in advertiser-sensitive categories. Our findings highlight cross-platform spillovers of platform governance and identify off-platform monetization as a key strategic margin for digital ecosystems.