Hyojung Sun - Digital Revolution Tamed: The case of the recording industry

Cover credit: David Kozlowski

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This book is an updated version of my Ph.D. thesis from Science, Technology and Innovation Studies at the University of Edinburgh. Huge gratitude goes to my supervisors, Prof. Robin Williams and Dr. James Stewart, who guided me with insightful comments, constructive criticism and great patience. Great appreciation also goes to the interviewees who have taken time out of their busy schedules to share insights with me. Their input has played a vital role in bringing this book together, and this would not have been possible without their generosity. I am also grateful for Music 2025 team, particularly Peter Jenner and Paul OHagan who gave life to this research and rekindled my academic interest in the digital music industry. Special thanks go to David Humphries for his emotional and practical support.

By enabling the duplication and sharing of cultural products at no cost with no degradation of quality, digitalisation suggested there would be a major shift in the way cultural contents are produced, distributed and consumed. The recording industry has been the first of the cultural industries to confront the changes posed by digital technology. The debut of Napster , the pioneering digital music service based on Peer-To-Peer (P2P) technology, promoted widespread predictions of an imminent and radical transformation within the music industry. The concept of radical innovation brings to mind Schumpeter s concept of innovation as involving gales of creative destruction , a process of far-reaching changes to existing frameworks, technologies and institutions that incessantly revolutionizes the economic structure by incessantly destroying the old one, incessantly creating a new one ( Schumpeter , p. 83).

This radical change was claimed to bring about the networked information economy that could offer individuals greater autonomy, political communities greater democracy, and societies greater opportunities for cultural self-reflection and human connection ( Benkler ).

However, the path of technological innovation is by no means straightforward. The unauthorised use of copyrighted material has undermined the recording industrys business structure, which was based upon distributing and selling cultural content embedded in physical artefacts, through which an artificial scarcity created as a rival good was used to control distribution and consumer price. The possibility of infinite reproduction and distribution of free music, in conjunction with the ease of music recording, presented a great challenge to the recording industry, potentially displacing the conventional gatekeepers or rendering them redundant. The immediate consequence was manifested in the decreasing revenue from record sales. The recording industry cultivated the so-called digital crisis rhetoric to lobby for longer and stronger copyright protection . The war on piracy was launched to stamp out P2P file-sharing, criminalising all forms of file-sharing activities. Napster was shut down, and a plethora of subsequent P2P services remained on the outskirts of the marketplace as darknet (Biddle et al. ). While iTunes and a myriad of other digital music services arose to valorise music on the digital music networks, a large proportion of digital music users remained unwilling to pay for digital content.