The coevolution of IT innovation and copyright institutions: The development of the mobile music business in Japan and Korea

In order to understand how IT impacts at the industry level, this paper adopts a theory of the coevolution of technological innovations and copyright institutions and applies it to examine how the mobile music business in Japan and Korea has developed. In Japan, mobile music business is controlled by incumbent recording companies and is complementary to offline CD sales. In Korea, however, the online music business (including mobile and fixed-internet) is dominated by mobile carriers and has replaced offline businesses, which has caused disruptive changes in the music industry structure. This paper suggests that diverging national copyright institutions give rise to the contrasting industrial changes, which in turn emphasizes how political processes drive the interactions between technologies and institutions.

► We analyzed the development pattern of mobile music businesses in Japan and Korea.
► It is based on the theory of coevolution of technology and social institutions.
► Japanese strong but strict copyrights restricted changes in existing industry.
► Korean weak but flexible copyrights disruptively changed existing music industry.
► The changes were caused by IT innovations’ complex interactions with copyrights.