Creative Destruction and the Music Industry: an investigation concerning new music technologies such as peer-to-peer file sharing and cloud computing and how these affect the informal and formal norms towards copyright protection and music consumption.

Abstract: This thesis deals with how creative destruction of the music industry caused by digital technologies can change formal and informal norms concerning the protection of copyrighted material. In the process of creative destruction new innovations can be so great that they change people’s beliefs: in the case of the music industry the technological shift from analogue to digital technologies, in particular peer-to-peer file sharing, have changed people’s views on the morality of piracy due to the low risk involvement that these innovations bring. A major issue of interest in this investigation is the level of control the industry has lost over its product and how effective institutional reform (IPRED act) is at reversing the strong informal norm of illegal file sharing. The investigation also deals with the increasing role that subscription based cloud computing services is playing as a legal alternative to illegal file sharing, and concludes that even though music consumers are unwilling to pay traditional prices for music, they are willing to honor copyrights at lower prices which cloud computing offers, the choice of cloud computing is also due to institutional reform.