The Kids In The Hall is a seminal example of sketch comedy, but as a broadcast show, the audio from the live audience had to be engineered into the sound channel of the program, since live performances have to mic the audience, to capture their laughs as part of the recording, and mix it properly, so that its volume pairs well with the broadcast performance, just like a sporting event.

The show really does hold up, years after the original recordings, still proving funny and awesome. But it turns out that the sounds of the audience change the whole dynamic of the humor. This is demonstrable if you stand it next to their movie, Brain Candy, which is also funny and watchable, but a different experience, without the noise of an audience.

You could argue that the performers have had their performances altered by the demands of improvisation and the give-and-take interaction that occurs with a live audience, but in retrospect, as a viewer watching the same show twenty years later, I don't really care about whether the audience effects are manufactured or not.

The truth is, the quality of the show has the sounds of the audience built into it as an integral quality, that boosts the entertainment value of the show.

The Kids In The Hall seem to have realized that the live improvisation really was a strong aspect of what made their show good, which is why they opted to engage in touring as a live show, instead of continuing as a broadcast series. I think if anyone were so inclined, though, the right kind of genius could be applied purely as post-production. It's just that the authenticity is preferred for obvious reasons, and ultimately, it's probably actually cheaper to just be talented.

If you film a comedy in front of a live audience, the actors have to adjust their delivery to speak around the laughter. If you take the laughter out of the final cut the pauses were the actors were waiting for the laughter to die down make it weird and awkward.

If a scene only needs one or two takes to get right, they can just go with the laughter from the live audience. If it takes several takes, they will still be getting laughter from the live audience, and so changing the timing of the delivery, but it won't be as intense as it should be for the quality of the joke, and if that live laughter was used it could change the perception of the joke for the broadcast audience. (Our perception of a joke is influenced by how we think others perceive it).

Hence, if you use a late take you need to replace the late take live laughter with either earlier take live laughter or laughter from a laugh library.

https://99percentinvisible.org/episode/the-laff-box/

Really. It's probably on the Top 3 stupid gimmicks by showbiz bigwigs together with the Loudness Wars and anti-piracy messages on original DVDs