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This Thesis Has Been Submitted in Fulfilment of the Requirements for a Postgraduate Degree (E.G This thesis has been submitted in fulfilment of the requirements for a postgraduate degree (e.g. PhD, MPhil, DClinPsychol) at the University of Edinburgh. Please note the following terms and conditions of use: This work is protected by copyright and other intellectual property rights, which are retained by the thesis author, unless otherwise stated. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This thesis cannot be reproduced or quoted extensively from without first obtaining permission in writing from the author. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given. Digital Disruption in the Recording Industry Hyojung Sun Thesis presented in fulfilment of the requirement of the degree of Doctor of Philosophy THE UNIVERSITY OF EDINBURGH DECLARATION I hereby declare that this following thesis is my own work and that, to the best of my knowledge, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree or diploma of the university or other institute of higher learning, except where due acknowledgement is made in the text. December 2016 Hyojung Sun i ABSTRACT With the rise of peer-to-peer software like Napster, many predicted that the digitalisation, sharing and dematerialisation of music would bring a radical transformation within the recording industry. This opened up a period of controversy and uncertainty in which competing visions were articulated of technology-induced change, markedly polarised between utopian and dystopian accounts with no clear view of ways forwards. A series of moves followed as various players sought to valorise music on the digital music networks, culminating in an emergence of successful streaming services. This thesis examines why there was a mismatch between initial predictions and what has actually happened in the market. It offers a detailed examination of the innovation processes through which digital technology was implemented and domesticated in the recording industry. This reveals a complex, contradictory and constantly evolving landscape in which the development of digital music distribution was far removed from the smooth development trajectories envisaged by those who saw these developments as following a simple trajectory shaped by technical or economic determinants. The research is based upon qualitative data analysis of fifty five interviews with a wide range of entrepreneurs and innovators, focusing on two successful innovation cases with different points of insertion within the digital recording industry; (1) Spotify: currently the world’s most popular digital music streaming service; and (2) INgrooves: an independent digital music distribution service provider whose system is also used by Universal Music Group. The thesis applies perspectives from the Social Shaping of Technology (“SST”) and its extension into Social Learning in Technological Innovation. It explores the widely dispersed processes of innovation through which the complex set of interactions amongst heterogeneous players who have conflicting interests and differing commitments involved in the digital music networks guided diverging choices in relation to particular market conditions and user requirements. i The thesis makes three major contributions to understanding digital disruption in the recording industry. (1) In contrast to prevailing approaches which take P2P distribution as the single point of focus, the study investigates the multiplicity of actors and sites of innovation in the digital recording industry. It demonstrates that the dematerialisation of music did not lead to a simple, e.g. technologically-driven transformation of the industry. Instead a diverse array of realignments had to take place across the music sector to develop digital music valorisation networks. (2) By examining the detailed processes involved in the evolution of digital music services, it highlights the ways in which business models are shaped through a learning process of matching and finding constantly changing digital music users’ needs. Based on the observation that business models must be discovered in the course of making technologies work in the market, a new framework of ‘social shaping of business models’ is proposed in order to conceptualise business models as an emergent process in which firms refine their strategies in the light of emerging circumstances. (3) Drawing upon the concepts of musical networks (Leyshon 2001) and mediation (Hennion 1989), the thesis investigates the interaction of the diverse actors across the circuit of the recording business – production, distribution, valorisation, and consumption. The comprehensive analysis of the intricate interplay between innovation actors and their interactions in the economic, cultural, legal and institutional context highlights the need to develop a more sophisticated and nuanced understanding of the recording industry. ii ACKNOLWEDGEMENTS It is a great privilege to be able to devote several years of one’s life to researching a topic one is passionate about. Growing up in South Korea, which prides itself on the world’s fastest and widest Internet connection, I had often resorted to Napster and its progeny to quench my thirst for worldly cultural experience. Since then, the tremendous change that this medium can bring to the way we relate music, people, law and technologies has captivated my intellectual curiosity. Throughout the long and winding road, I was often exhilarated by the mere thought that I might have a voice in this field. My deepest gratitude, therefore, goes to Prof. Robin Williams, who first accepted me as a continuing Ph.D. student in STS, moving from the Law School, and has tirelessly guided me intellectually with insightful comments, constructive criticism and great patience. I am also greatly thankful to Dr James Stewart for the constant support and encouragement and invaluable feedback he has given me throughout the process. Great appreciation goes to the interviewees who have taken time out of their busy schedules to share insights with an unknown international student. Their thoughts constitute a vital part of the thesis, and this would not have been possible without their generosity. Special thanks goes to Alex Branson who offered me an opportunity to work at INgrooves, allowing me to have a lived-in experience in the music industry. I have also been fortunate to work with Prof. Ruth Towse, who has been an intellectual role model that I thought I could only dream of meeting. I am deeply indebted to the wonderful opportunity not only to meet but also to work closely with her. Throughout the long journey, I have come across many wonderful people. Special gratitude goes to Stacia Greenwood who has been there for me in times of fire and rain. I also sincerely appreciate Dr Diego De La Hoz, Dr Miguel Sanchos, Dr Nick Prior, Sara Bea and Tyler McWilliams (in alphabetical order), for providing intellectual/emotional support and wise advice. Each one of them deserves a separate acknowledgement; I will save it for a pint. I am much obliged to my family, especially my mum, whose infinite love has taught me to have the courage to follow my heart, and friends in Korea, particularly Kyoung Hye Cho and Hyun Shik Kim, who reminded me iii that I have friends upon whom to call. The greatest gratitude goes to Jeong-In Park, my daughter, who grew with my thesis, but turned out so much better despite being paid less attention than the thesis. This thesis is dedicated to her. I love you, Jeong-In. I would not have been able to complete this without you! iv TABLE OF CONTENTS DECLARATION ..................................................................................................... i ABSTRACT .............................................................................................................. i ACKNOLWEDGEMENTS .................................................................................. iii TABLE OF CONTENTS ...................................................................................... v LIST OF TABLES ............................................................................................... viii LIST OF FIGURES ............................................................................................... ix GLOSSARY ............................................................................................................. x CHAPTER 1. INTRODUCTION ......................................................................... 2 1.1 Problem Statement ..................................................................................................... 2 1.2 Scope and Aims of the Research ............................................................................... 6 1.3 Thesis Outline ........................................................................................................... 9 CHAPTER 2. THEORETICAL BACKGROUND, AND RESEARCH DESIGN AND METHODOLOGY ..................................................................................... 12 2.1 Introduction ............................................................................................................. 12 2.2 Theoretical Background .........................................................................................
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