Abstract
This article examines field-level processes that condition actors’ efforts to mobilize collective strategic action for institutional change in markets, showing how such efforts may unsettle existing arrangements while simultaneously laying the groundwork for new ones. Drawing on strategic action field theory, we analyze the transformation of the recorded music market from physical records to online streaming in the early 2000s. Conceptualizing markets as configurations of interconnected fields, we develop a process model of inter-field dynamics demonstrating how exogenous shocks in proximate fields reconfigure power relations and enable coordinated action. Our analysis traces how collective mobilization destabilized incumbent structures, how struggles over legitimacy facilitated organizational appropriation of emerging practices, and how temporary settlements consolidated a new market infrastructure. We contribute to macromarketing theory by specifying the mechanisms through which market-shaping unfolds across interconnected fields and by explaining why disruption often culminates in settlements that re-stabilize, rather than displace, incumbent power.
Keywords
Introduction
How institutional change is enacted in markets has seen an upsurge attracted increasing interest in marketing and consumer research in recent years (for an overview, see Pedeliento et al., 2023). Considering markets not merely as static formations in which actors respond to changes in the institutional surroundings, but as dynamic and continuously unfolding, recent research has examined how actors can exert agency to bring institutional change about through institutional work (Baker & Nenonen, 2025; Coskuner-Balli et al., 2021; Ghaffari et al., 2019), or boundary work (Diaz Ruiz & Makkar, 2021). While this literature has emphasized how markets emerge through conflicts and power struggles rooted in institutional multiplicity and contradictory logics (Zilber, 2011), enabling consumer collectives and other social movements to envision and pursue institutional change (Ertimur & Coskuner-Balli, 2015; Giesler, 2008, 2012; Humphreys et al., 2017), less attention has been paid to how such multiplicity is enacted as an unfolding process over time. This question is important because it touches upon the neglected issue of market actors’ power endowment and relative influence strategies in market system dynamics (Pedeliento et al., 2023, p. 188). Indeed, actors are oftentimes assumed in prior research to have a predetermined, almost heroic super-power to change markets independent of the institutional settings in which their strategic actions are embedded (Abdelnour et al., 2017).
Against this background, we ask: how do collective market-shaping efforts unfold over time across interconnected institutional fields, and what outcomes do such process dynamics produce for market dynamics and institutional change? Importantly, rather than presupposing any specific outcome, this question reflects a process-theoretical sensitivity to the possibility that collective market-shaping may produce outcomes that diverge from market-shapers’ original intentions (Baker et al., 2019; Kleinaltenkamp et al., 2021; Langley, 1999). We refer to these patterned cross-field processes as inter-field dynamics, defined as temporally unfolding interactions between proximate institutional fields through which exogenous shocks redistribute capacities, reconfigure power relations, and enable new forms of collective action that reshape markets.
In the present article, we examine these inter-field dynamics by analyzing the shift from physical records to music streaming in the market for recorded music in the early millennium, with a particular focus on Sweden as the forerunner of this transformation in the global market. In a nutshell, this shift was spurred by a macro-level digitalization wave in proximate fields in the early 1990s, which actualized the shift from a physical records product market to a streaming market, with 85% of all music consumption from about 2015 onwards occurring through online streaming (Musiksverige, 2016), via a parallel yet illegal MP3 music downloading market in the early new millennium (Denegri-Knott, 2004; Denegri-Knott & Tadajewski, 2017; Giesler, 2008). Backed by Pedeliento et al. (2020, 2023), we draw on emerging discussions in marketing theory of markets as nested within strategic action fields (Kjeldgaard et al., 2017; Laamanen & Skålén, 2015) to problematize how this institutional shift was brought about.
In doing so, we adopt a process lens that keeps temporal order and mechanisms in view rather than treating market change as a sequence of outcomes. Following Langley (1999), we treat the empirical record as process data; messy, multi-level, and temporally embedded, and build a process model (see Figure 1) that goes beyond descriptive chronology by identifying the driving forces and layered patterned mechanisms through which market change unfolds. This matters for institutional perspectives on market change, because multiplicity is not only a condition of markets; it is also something that becomes consequential through episodes, turning points, and patterned sequences that redistribute power, reshape legitimacy, and reconfigure collective action.
A synthesized process model of strategic action field dynamics and change.
More specifically, we examine how the Swedish consumer collective the Pirate Bay was able to mobilize market-shaping capabilities to oppose and challenge the current set of institutions underpinning the physical records market. We theorize these market-shaping capabilities as collective strategic action, which first and foremost emphasize the social as opposed to individual dimension of consumption (Arnould et al., 2021). Notably, while consumers engaging in file-sharing in the early 2000s cannot necessarily be considered a consumer collective since they were typically motivated by individualistic interests, the Pirate Bay was explicitly organized around the collective goal of disrupting the existing market system through technological innovation (Friman, 2011). Beyond facilitating file-sharing of various kinds of media at a global scale, the Pirate Bay also contributed to the broader mobilization of strategic action by functioning as a role model for other file-sharing consumer collectives that emerged in its wake. These subsequent consumer collectives, while not the focus of the present article, pursued similar disruptive ambitions.
Furthermore, the notion of strategic action fields (SAFs or just simply fields henceforth) focuses on how different actors intentionally engage in collective action to create, stabilize, or change social arenas such as markets (Fligstein & McAdam, 2012; Laamanen & Skålén, 2015). Collective action in fields is thus ‘strategic’ in the sense that actors intentionally engage in such practices while being mindful of what others are doing in the same field (Fligstein, 2013), either to create, disrupt or maintain institutional change. Importantly, this process view implies that collective action is not a static attribute of an actor category (e.g., “incumbents” or “challengers”), but a shifting and relational achievement of power that develops through contention, appropriation, and settlement.
We contribute to macromarketing theory and discussions on institutional change and market system dynamics (Giesler & Fischer, 2017; Pedeliento et al., 2023) by developing a process model of institutional change in markets as it unfolds across interconnected strategic action fields. We show how exogenous shocks originating in proximate fields, considered in relation to the focal setting, enable loosely coordinated collective action that destabilizes incumbent arrangements, how ensuing contention over legitimacy drives hybrid appropriation of disruptive practices, and how temporary settlement stabilizes a new market infrastructure, often in ways unintended by the original challengers and incumbents alike.
Accordingly, we problematize the assumption that institutional change in markets is driven by market-shapers embedded within a single field or operating under a dominant institutional logic. Instead, we show that institutional change emerges when actors occupy positions across multiple fields, enabling them to draw on and navigate different and potentially competing logics (Fligstein & McAdam, 2012). In this way, we contribute a more nuanced understanding of institutional diversity in market-shaping by emphasizing that markets do not evolve as disconnected islands but as linked arenas in which institutional shifts unfold through power relations between actors moving across interconnected fields. Most notably, such institutional diversity enables market-shapers to “get outside of their own heads” (Fligstein & McAdam, 2011, p. 7) by activating multi-field entrepreneurial capabilities that are crucial for challenging and radically transforming the institutionalized market dynamics. Furthermore, by theorizing these dynamics through a process model (Langley, 1999), we specify how these shifts unfold over time, what triggers them, what mechanisms propel them, and what forms of (un-)intentional settlement they produce.
Our contribution advances explanations of institutional change in markets by developing a process model of collective market transformation across interconnected strategic action fields. Drawing on SAF theory (Fligstein & McAdam, 2011, 2012) and Langley's (1999) strategies for theorizing from process data, we conceptualize the Swedish shift from physical records to streaming as a phased sequence in which exogenous shocks originating in proximate fields reconfigure power and enable collective action, ensuing contention over legitimacy drives hybrid appropriation of disruptive practices, and temporary settlement stabilizes a new market infrastructure. This processual account clarifies why market-shaping outcomes frequently diverge from the intentions of challengers and incumbents alike, often reconfiguring rather than displacing incumbent advantage (Pedeliento et al., 2020, 2023).
Markets and Strategic Action Fields
Before turning to the methodology, we develop our theoretical framework in three steps. First, we situate our study within marketing theory and discussions on market system dynamics and market-shaping, showing how institutional perspectives have advanced the understanding of market change but also leave open questions regarding inter-field dynamics and institutional multiplicity. Second, we outline a strategic action field (SAF) framework to conceptualize markets as nested fields in which actors occupy incumbent and challenger positions and engage in collective action under conditions of stability, shock, and contention. Third, we specify how this SAF perspective supports a process analysis of market change, allowing us to identify patterned mechanisms across phases rather than offering a purely descriptive chronology (Langley, 1999).
Market System Dynamics and Market-Shaping
That markets are always in a state of becoming has not been missed in marketing theory. Markets are formations under continuous change, not least in the sense of being intentionally and unintentionally reshaped by market actors through practices of production and consumption (Araujo, 2007). The politics of market-shaping thus imply a broad array of interests and undertakings by different actors aimed at affecting current market system dynamics (Giesler & Fischer, 2017). These activities range from maintenance efforts, in which actors seek to uphold existing power relations (Beninger & Francis, 2021; Dolbec & Fischer, 2015; Yngfalk, 2019), to disruptive efforts, in which actors seek to destabilize current market dynamics and steer the market's trajectory in new directions (Harrison & Kjellberg, 2016; Nenonen et al., 2019). Flaig et al. (2021) further distinguish between defensive and offensive market-shaping strategies, where defensive efforts aim to preserve existing arrangements and offensive efforts seek to induce change in line with alternative interests.
Importantly, recent work has emphasized that market-shaping rarely unfolds through isolated or unilateral actions. Instead, markets emerge through collective activities and coordinated strategies involving multiple actors whose interests may only partially overlap (Baker et al., 2019; Kleinaltenkamp et al., 2021, 2022). From this perspective, market-shaping cannot be reduced to the intentions of focal actors, such as firms or institutional entrepreneurs, but is produced through evolving constellations of engagement of multiple actors that mobilize practices, resources, and narratives over time.
Besides straightforward efforts to create new markets, for example through market bifurcation (Diaz Ruiz & Makkar, 2021) or countercultural resistance (Hietanen & Rokka, 2015), market-shaping can also modify existing market dynamics more incrementally (Fyrberg Yngfalk & Yngfalk, 2020). As suggested by Kleinaltenkamp et al. (2022), such outcomes often reflect the emergent and negotiated character of collective market-shaping processes rather than the realization of clearly articulated strategic goals, which we turn to next.
Collective Market-Shaping and Legitimacy
While market-shaping efforts are often initiated at the micro-level (Nenonen & Storbacka, 2021, p. 346), institutional perspectives emphasize how such efforts are always embedded in meso-level social orders or organizational fields (DiMaggio & Powell, 1983). These perspectives imply that actors’ agency, and thus their capacity to shape markets, is institutionally embedded and conditioned by the need to establish legitimacy in relation to prevailing rules, norms, and cultural-cognitive frameworks (Meyer & Rowan, 1977). Accordingly, institutional studies in marketing and consumer research have focused on how markets are constructed, maintained, and transformed through processes of social legitimization (Nenonen & Storbacka, 2021). Humphreys (2010) study of casino gambling in the US illustrates how new markets emerge through gradual processes of cultural, normative, and territorial legitimation. Relatedly, research on institutional logics has shown how markets are shaped by shifts in the relative dominance of competing logics that structure actors’ understandings and practices (Thornton et al., 2012). Ertimur and Coskuner-Balli's (2015) study of the US yoga market, for example, demonstrates how market-shaping involves changing emphases among spirituality, medical, fitness, and commercial logics.
Taken together, these studies highlight how institutional multiplicity creates both opportunities and constraints for market change. However, while institutional research has been highly productive in explaining how markets are legitimated or contested, it has been less explicit about how collective action unfolds over time across interlinked fields, and how power is exercised in and through such processes.
Power and Institutional Work
Market-shaping research has increasingly foregrounded power as a central yet still under-theorized dimension of collective market change. Rather than treating power as a stable resource held primarily by dominant actors, Schildt et al. (2020) conceptualize power as shaping what actors come to see as plausible and actionable in ongoing processes of sensemaking. In this view, power works both episodically, through deliberate interventions that steer others’ interpretations, and systemically in the Foucauldian sense (Foucault, 1977), through taken-for-granted knowledge structures, identities, and evaluative criteria that render some courses of action legitimate, necessary, or even thinkable, while marginalizing others. This shifts attention away from power as formal authority or discursive dominance alone, and toward how the organization of meaning-making, and the infrastructures and arrangements that stabilize it, enable some forms of collective action while constraining others.
From this viewpoint, institutional work (Lawrence & Suddaby, 2006) becomes one mechanism through which collective market-shaping is pursued, as actors mobilize resources to influence the regulative, normative, and cultural-cognitive pillars of institutions (Scott, 2008). However, Schildt et al. (2020) also emphasize that power effects are rarely fully controllable: sensemaking processes are central arenas for conflicts (p. 245). Once new interpretations, practices, or templates gain plausibility, they can travel, harden into taken-for-granted frames, and be re-used in ways that exceed the intentions of those who initiated them. This insight complements Kleinaltenkamp et al. (2021, 2022) argument that collective market-shaping is characterized more by becoming or emergence than orchestration, and that market outcomes frequently diverge from the original intentions of the actors involved. Together, these perspectives suggest that market-shaping should be analyzed as a process in which collective action and power co-evolve, producing outcomes that may stabilize, transform, or even undo markets in ways that no single actor fully controls.
Strategic Action Fields and Processual Market Change
While the literatures reviewed above emphasize collective action, institutional embeddedness, and power, they remain relatively silent on how such dynamics unfold over time across interconnected fields. To address this limitation, we turn to strategic action field (SAF) theory. Integrating practice theory (e.g., Giddens, 1984), institutional theory (e.g., Meyer & Rowan, 1977), and social movement theory (Mueller, 1992), Fligstein and McAdam (2012, p. 9) conceptualize SAFs as fundamental to any form of collective action in markets. Collective action refers to the joint efforts of actors based on shared or partially shared interests aimed at mobilizing market alternatives (Arnould et al., 2021).
From this perspective, market-shaping is inherently a collective accomplishment that emerges through often loosely organized activities and asymmetrical power relations between multiple actors, rather than through the intentions of isolated market participants (Baker & Nenonen, 2025; Kleinaltenkamp et al., 2021). For example, the consumer collective behind the Pirate Bay platform challenged the institutional logics of the recorded music market by contesting how music was distributed and consumed. That ordinary consumers on the platform did not necessarily share identical collective interests does not undermine this characterization. Rather, it illustrates how collective market-shaping can occur even in the absence of full consensus or centralized coordination, if actors’ practices are mediated and become aligned around a shared direction of change (Kleinaltenkamp et al., 2021).
A central insight of SAF theory is that actors occupy positions of varying power as incumbents or challengers, which shifts analytical attention away from the actions of collectives in isolation and toward the dynamic field processes unfolding between them. Power, from this perspective, is not a static resource possessed by incumbents alone, but is enacted relationally through configurations of actors, practices, technologies, and interpretive frames that shape what forms of collective action become possible, plausible, or legitimate over time (Schildt et al., 2020). Challengers typically seek to contest institutionalized practices and redirect the orientation of strategic action in the field, while incumbents respond through heterogeneous strategies such as imitation, cooptation, accommodation, or collaboration (Zietsma et al., 2018). These incumbent responses do not necessarily restore stability; rather, they may reconfigure field dynamics in ways that foster new rounds of challenger mobilization by generating additional mobilizing frames and sites of contention (Kim & Schifeling, 2022). Recent work on collective market-shaping similarly emphasizes that such reciprocal and evolving interactions between incumbents and challengers are central to how strategies emerge at the collective level, often producing outcomes that exceed the intentions and control of any single actor or coalition (Kleinaltenkamp et al., 2022).
SAF theory further emphasizes that collective action is shaped not only by actors’ cultural resources but by their social skill, understood as the capacity to induce cooperation by constructing shared meanings, identities, and interpretations of situations (Fligstein & McAdam, 2011, 2012). This emphasis aligns with views of collective market-shaping as an emergent process in which strategic direction is co-produced through interaction rather than imposed through deliberate orchestration (Kleinaltenkamp et al., 2021). Crucially, because strategic action fields are nested within one another, institutional shifts in markets are often triggered by exogenous shocks originating in proximate fields (Corbo et al., 2016; Fligstein & McAdam, 2011; Pedeliento et al., 2020). Such shocks, such as rapid digitalization, can disrupt established interpretive frames and reconfigure power relations, giving rise to episodes of contention in which new actors, identities, and practices become plausible and actionable (Thornton, 2002). From a power perspective on collective market-shaping, these moments are particularly consequential because they open up sensemaking processes through which actors reassess goals, practices, and alignments, enabling collective strategies whose outcomes are emergent and often unintended (Kleinaltenkamp et al., 2021, 2022; Schildt et al., 2020).
To sum up, our SAF-oriented framework enables a processual theorization of market change by foregrounding how power, collective action, and institutional diversity unfold through evolving sensemaking across interconnected fields over time. This perspective allows us to identify patterned mechanisms, rather than isolated events, that drive market transformation (Langley, 1999). Before analyzing how these dynamics played out in the transformation of the Swedish market for recorded music, we next turn to the methodology of our study.
Method
Case and Data
This article is part of a larger study of the digitalization of the Swedish market for recorded music. The primary data consist of 39 semi-structured interviews (Kvale & Brinkmann, 2008) with central market actors, focusing on the period from approximately 1995 to 2015. Interviewees include incumbents, represented by record company CEOs, marketing managers, artist and repertoire (A&R) representatives, music artists, and songwriters affiliated with record companies and music publishers; challengers, primarily represented by so-called music “pirates”, both formally and informally associated with The Pirate Bay; and internal governance units (IGUs), represented by trade organizations, political parties, interest organizations, and unions.
Because it was not possible to follow this 20-year period in real time, the interviews were conducted retrospectively. Interview questions focused on respondents’ accounts of market changes and their own roles within those processes. Following Langley (1999), the interviews were explicitly designed to elicit process narratives rather than isolated opinions, encouraging respondents to reflect on sequences of events, turning points, conflicts, and adaptations over time. In line with this process-theoretical approach, secondary data were not treated merely as contextual background but were systematically collected and analyzed alongside the interview material to support triangulation, identify key events and turning points, and inform the temporal structuring of the market transformation process. Although retrospective interviews are a necessary and common component of qualitative process research, they may introduce recall bias (Langley, 1999; Leonard-Barton, 1990). To safeguard the trustworthiness of the interview material, we triangulated individual accounts across respondents and against existing research on the music industry during the period (e.g., Leyshon, 2014; Wikström, 2020).
In addition, we triangulated interview data with a corpus of secondary materials consisting of official government investigations, policy documents, and reports addressing issues relevant to changes in the Swedish music market. In total, 14 such documents were identified and analyzed. We further triangulated interview data with concurrent media coverage. Using the Swedish database Retriever (a leading media archive in the Nordics), we collected all articles containing the phrases “the music industry” or “the music business” published in the eight largest Swedish daily newspapers between 1995 and 2015. After removing irrelevant items and duplicates, this resulted in a corpus of 562 articles. Moreover, the transformation of the recorded music market represents a heavily scrutinized case, repeatedly revisited in scholarly work (e.g., Denegri-Knott, 2004; Giesler, 2008) and media coverage. As a result, many respondents had engaged with these events repeatedly over time, which helped mitigate memory decay. Taken together, this triangulation strategy allowed us to cross-check individual recollections against contemporaneous accounts and institutional documentation, thereby strengthening the credibility of our process reconstruction and reducing the risk of post hoc rationalization.
Data generation and analysis proceeded iteratively. As recommended by Gioia et al. (2013), emerging themes informed subsequent interviews, allowing us to probe developing interpretations and clarify ambiguities. A full list of interviewees is provided in Table 1. To preserve anonymity, interviewees are listed using fictional but typical Swedish names, and the organizations with which professionals were affiliated are not disclosed.
Interviewees.
Interviewees were recruited using a combination of convenience, snowball, and theoretical sampling strategies. Initially, professionals holding key positions in the Swedish market for recorded music were contacted and interviewed if they agreed to participate. To recruit music pirates, we relied on personal networks (e.g., friends of friends) to identify individuals who had engaged recurrently in music downloading during the period under study. Both professionals and consumers were asked to suggest additional interviewees, who were then contacted if they were deemed relevant and consented to participate. Theoretical sampling (Strauss & Corbin, 1998) guided further recruitment by prioritizing actors who could shed light on emerging themes. Sampling continued until theoretical saturation was reached, that is, when additional interviews no longer generated substantively new insights into the dynamics of conflict, collective action, and institutional change in the market.
Data Analysis
The data were analyzed following hermeneutic principles, involving a continuous interpretive movement between parts and whole (Alvesson & Sköldberg, 2017). Rather than treating empirical material as evidence to be coded once and fixed, we engaged with interviews and secondary sources through iterative cycles of interpretation, in which emerging understandings were repeatedly confronted with the data and revised. This interpretive stance aligns with process research, where theorizing develops through sustained engagement with empirical material over time rather than through linear hypothesis testing (Langley, 1999).
Following Gioia et al. (2013), we began with open coding that was initially uninformed by formal theory. In this phase, we coded interview transcripts line by line to capture informants’ own terms and problem framings. First-order codes such as debate, trial, court, illegal, ideology, and power reflected perceived conflict between incumbents and challengers, while codes including file sharing, MP3, internet, CDs, stereo, and broadband highlighted the centrality of technological change and diffusion. Coding in this phase was conducted independently by the authors and subsequently discussed in joint sessions to align interpretations, refine code definitions, and ensure consistency across interviews and actor categories. As analysis progressed, it became evident that the emerging patterns could be productively interpreted through strategic action field (SAF) theory, given its focus on conflict, power, and collective action between incumbents and challengers. As Gioia et al. (2013, p. 21) note, this marks a shift from largely inductive analysis toward abductive theorizing. From this point onward, we engaged in theory-guided coding while remaining attentive to empirical material that challenged or refined SAF concepts. In a first analytic stage, first-order codes were clustered into categories capturing opposing practices and strategies among challengers and incumbents (e.g., pirate downloading versus copyright enforcement). In a second stage, these categories were abstracted into themes aligned with core SAF concepts such as exogenous shocks, episodes of contention, and social skill. For example, interview statements framing file-sharing as a moral or political act were initially coded as ideology and resistance; through abductive comparison across interviews and secondary materials, these codes were later theorized as part of an episode of contention within the strategic action field of recorded music.
Secondary data were analyzed in parallel with interview material and treated as process data rather than contextual background. Government reports, archival news articles, and industry documents were used to corroborate interview accounts, refine the temporal ordering of events, and identify exogenous shocks and turning points that were not always salient in retrospective interviews. This triangulation was particularly important for anchoring policy reforms, legal proceedings, and infrastructural developments in time and for assessing convergence and divergence across actor narratives. In a third analytic stage, the SAF-aligned themes were ordered temporally to trace patterned sequences of conflict-driven institutional change. This temporal ordering follows Langley's (1999) temporal bracketing strategy, which enables theorizing by examining how outcomes in one phase become the conditions for subsequent phases rather than treating events as isolated occurrences. When alternative interpretations of phase boundaries or causal sequences emerged during analysis, these were addressed through iterative return to the empirical material, comparison across data sources, and focused discussion among the authors, with particular attention to deviant cases.
The analysis resulted in three analytically distinct phases in the institutional shift and gradual undoing of the analog market for recorded music: (i) technology shock and diffusion, (ii) contention and hybrid appropriation, and (iii) practice adaptation and settlement. Albeit simplified, Table 2 illustrative summarizes how first-order interview data and secondary sources were systematically coded and aggregated into second-order themes and SAF concepts, and how these were linked to the three phases. In line with Langley's (1999) approach, the table provides a transparent evidence trail from empirical material to process theorization.
Data Analysis.
Building on these phases, we developed a process model of collective strategic action in the Swedish market for recorded music (Figure 1). Following Langley's (1999) temporal bracketing strategy, the model distinguishes between dynamics within the focal market, actions originating in proximate fields, and SAF-theoretical mechanisms linking them. One-ended arrows indicate directional relationships in which one factor drives another, while double-ended arrows denote iterative or mutually reinforcing dynamics. Together, the model and supporting Table 2 synthesize empirical findings and theory by making explicit the driving forces and patterned sequences through which institutional change unfolded.
Findings: Shifting Logics in Music Market Dynamics
This section analyzes the transformation of the Swedish market for recorded music using SAF theory and a process lens. Following Langley's (1999) temporal bracketing strategy, we structure the empirical material into three phases that reflect shifts in field relations, collective action, and institutional logics. Importantly, the objective is not only to describe what occurred, but to theorize the process by identifying the driving forces that connect these phases over time (Langley, 1999). Rather than treating the phases as isolated episodes, we conceptualize them as analytically distinct but sequentially linked moments in a broader field-level process, driven by recurring SAF mechanisms: (1) the activation of exogenous shocks through field interdependencies, (2) contention and power struggles over legitimacy and control, and (3) institutional adaptation and settlement that reconfigures market power dynamics.
In the first phase, two national digitalization reforms and technologies developed in proximate fields created new interrelations between previously disconnected fields. These developments enabled consumers to mobilize collective action through which the current set of institutions in the market for recorded music was disrupted. In the second phase, this shock spurred contention, in which normative and regulative struggles over piracy became intertwined with the emergence of more formalized organizational solutions, illustrated by the rise of Spotify in the market. In the third phase, adaptation and settlement stabilized new institutional logics and market dynamics, effectively ending the market for analog recorded music as it was.
Technology Shock and Diffusion
The first phase outlines how two key digitalization policy reforms fostered new technologies in proximate fields and within Swedish households, thereby bridging previously disconnected fields and generating an exogenous shock to the power dynamics underpinning the market for recorded music. Because markets function as nested strategic action fields, shocks originating in one field can have far-reaching consequences for adjacent fields and their incumbents. The central driving force in this phase is the activation of an exogenous shock originating outside the focal market, which destabilized incumbent positions by enabling new forms of collective action before incumbents could respond strategically (Fligstein & McAdam, 2011, 2012). Almost all respondents emphasize two incumbent actors that dominated the market for recorded music prior to digitalization in the 1990s: (a) record companies that produce, record, and promote artists, and (b) music publishers that represent and develop songwriters (Leyshon, 2014; Wikström, 2020). However, respondents also stress that two Swedish government reforms in the 1990s substantially altered the conditions of this market.
The first reform was enacted by the Swedish IT-commission in 1994 and refers to the successive implementation of a national broadband infrastructure during the 1990s and early new millennium. In the 1994 Swedish official government report “Information technology – Wings for human ability,” Sweden's ambition to take global leadership in building a national IT infrastructure is explicit. This framing is further reflected in later official decisions. For instance, the 1999 SOU “Future-proof IT infrastructure for Sweden” contends: Sweden needs a radically new one open IT infrastructure that gives everyone access to high real communication capacity, which can be achieved by the state, the regions and the municipalities taking responsibility together to build a fiber-optic IT infrastructure (SOU, 1999).
This optimism surrounding infrastructural digitalization is echoed in the interviews. Respondents repeatedly compare Sweden with countries such as the US, the UK, and Germany, emphasizing that broadband expansion occurred more rapidly in Sweden. Ingemar, a lawyer for a trade organization, describes this perceived exceptionalism: The development was amazing. Around year 2001–2002 I had 100-megabit fiber broad band in my apartment. You know, our whole office in London didn’t have that! They asked me: ‘what kind of crazy country is Sweden?’
The second reform frequently mentioned is the so-called Home PC reform of 1997, designed to strengthen digital competence at the population level. By allowing consumers to deduct much of the cost of purchasing a personal computer from their tax returns, the reform significantly increased computer ownership in Swedish households. Many respondents argue that this policy, in combination with rapid broadband diffusion, accelerated illegal downloading and contributed to the sharp decline in Compact Disc sales.
At the same time, new digital technologies developed largely outside the music industry, such as file-sharing programs like Napster (launched in 1999), protocols such as BitTorrent (launched in 2001), and compressed digital formats such as MP3 (Denegri-Knott & Tadajewski, 2017), enabled consumers to connect and share content at population scale (Ryan, 2013). These technologies made possible a consumer-driven system of distribution that effectively put dispersed individuals to work in circulating music globally (Leyshon, 2014; Wikström, 2020). While the Internet was initially developed for defense and academic collaboration, it increasingly became a medium for distributing cultural content such as film and music. Industry respondents explicitly link the rise of “music piracy” to this development and the downturn in CD sales. Gunnar, an Artist & Repertoire manager, describes this turning point: I started to work here 2002 at the same time as the big downturn in the CD sales started. Piracy increased, and one after another, my colleagues had to leave their jobs.
The new downloading consumption practices had severe consequences for incumbents. Hans, CEO of a major record company, states: “I sacked around 250 people during a period…of four years, about half of the work force because of piracy.” In this phase, the primary challenger emerged as consumers enabled to transgress the existing market system through new technologies diffused by particular consumer collectives. Although a distinction can be made between the collectives that developed and diffused these technologies, on the one hand, and ordinary consumers who used them to download music, on the other, incumbents labeled all consumers engaging in music downloading as “music pirates.”
The music pirates were coordinated through the digital platform The Pirate Bay, which functioned as a focal organizing device for collective action. The Pirate Bay was a Swedish BitTorrent-based file-sharing site that became one of the largest global enablers of “free” downloading of music and other media during the 2000s. Crucially, the pirates were able to do something incumbents were not: leverage the exogenous shock produced by macro-structural infrastructural developments. As Maria, CEO of a trade organization, explains: The digital development did not come from the music industry itself. We were a little slow to react in the beginning, but the pirates were quick to pick up the new possibilities.
This illustrates how challengers’ agency in this phase did not stem from superior market resources, but from their embeddedness in proximate technological fields, allowing them to translate infrastructural change into collective strategic action. Multiple respondents portray incumbents as both reluctant and lacking technical competence. An A&R representative reflects: When I started to work at this record company in the beginning of the noughties, I came from a company that made web-solutions. My first reflection was that the technical knowledge about computers was very low here.
Similarly, Hans, the record company CEO quoted earlier, expresses incumbents’ affective resistance to change: “We hated the change. We would have preferred it to be like it was before.” The incumbents thus attempted to preserve a physical product logic organized around discrete sales of CDs, which had underpinned their privileged position. However, The Pirate Bay operated not merely by mobilizing technological means. By providing an easy-to-use platform for file-sharing, it also mobilized collective action through symbolic means. Ulf, a leading pirate consumer, explains: People have downloaded so much music and movies. They’re very grateful to The Pirate Bay. Some people that I meet have even tattooed the logo of pirate bay on their bodies. So, it is a lot about symbols when it comes to The Pirate Bay, it's about taking a stand against those in power.
Despite being illegal, piracy gave new meaning to music consumption and, according to incumbents in hindsight, offered a superior service relative to physical records. However, because piracy was illegal, it lacked legitimacy, a tension that becomes central in the next phase. Thus, downloading was not only more convenient and affordable; it became a political-symbolic stance and a community. It emerged as a symbol and a community for something radically different. In SAF terms, The Pirate Bay exercised social skill (Fligstein & McAdam, 2011) by offering an attractive identity or subject position for consumers to relate and redirecting collective action from buying records to accessing music online. John, an ordinary consumer that was labeled as pirate by the industry, describes his shift in practice: A few years after my high-school years [about year 2002–2005] I built up a large library of MP3s. I downloaded different albums and songs… I connected my computer to the to the amplifies on the stereo… I listened to the MP3 files via the stereo and my MP3 players.
Despite being illegal, “piracy” gave new meaning to music consumption and, according to incumbents in hindsight, offered a superior service relative to physical records. However, because piracy was illegal, it was not a legitimate business model for companies to adapt, which becomes central in the next phase.
Hybridizing Ideologies Through Contention and Appropriation
The emergence of downloading as a dominant consumption practice was followed by a second phase characterized by contention between incumbents and challengers. During this phase, the threat and opportunity posed by digitalization became tied to specific organizational and regulatory struggles (Fligstein & McAdam, 2011, p. 9). What had initially emerged as a technologically enabled disruption now unfolded as a prolonged conflict between incumbents and challengers over legitimacy, regulation, and control.
The conflict was initially characterized by pirate challengers, most prominently The Pirate Bay, on the one hand, and record companies supported by incumbent governance units (IGUs), such as trade organizations and legal institutions, on the other. Ingemar, a lawyer for one such trade organization, notes: “I focused on anti-piracy for 10–15 years.” This phase unfolded over many years and reflected radically divergent interests. Incumbents defended music as a profit-making business grounded in copyright law, while pirates insisted that music should be freely accessible. This conflict resonates with Giesler's (2008) distinction between “possessive individualism,” associated with incumbent logics, and “social utilitarianism,” associated with pirate consumption practices.
Copyright legislation became the central battleground. For record companies, music publishers, artists, and songwriters, copyright was foundational to revenue generation, and many business respondents framed strict adherence to copyright law as non-negotiable. Pirates, by contrast, occupied a contradictory position, framing music as a cultural commodity that should be accessible to all. Ulf explains: Pirate Bay and other sharing platforms were not [merely] about the technology, they were about the ideological stance and power. Pirates have generally agreed that it is important that all people have access to everything on the same terms.
This ideology gained political expression in Sweden through the Pirate Party, established in 2006, which supported the logic of social utilitarianism and the practice of pirating (cf. Giesler, 2008). In the 2009 EU parliament election the party earned two seats. Piracy and surveillance were major political questions; even in the 2006 parliamentary debates between the leaders of the largest political parties in Sweden, Göran Persson and Fredrik Reinfeldt, who neither took a stance against piracy despite intensive lobbying from industry interest organizations.
The conflict culminated in 2009 when the three Pirate Bay founders were convicted of copyright infringement, sentenced to up to one year in prison, and ordered to pay damages of 46 million SEK (about 4.5 million euros). The trial contributed to delegitimizing music downloading as it were (cf. Denegri-Knott & Tadajewski, 2017), which became a key event in pushing the institutional shift in the market.
At around the same time, the music streaming company Spotify was launched. Respondents widely identify the launch of Spotify as a turning point because Spotify was able to bridge the opposing institutional logics of the challengers and incumbents, which reframed streaming as a new digital service category (Hsu et al., 2018). This hybridization of conflicting ideologies was accomplished by Spotify's skillful appropriation of the music downloading discourse. However, the success of Spotify also reflects that technological diffusion was an end in itself, which was detached from ideological positioning. This becomes visible in the role played by key technical actors. Ludvig Strigeus, founder of the BitTorrent client uTorrent and a key technological contributor, which also was employed by Spotify in 2006, notes in an interview from 2011: It can be perceived as a bit strange, but I have never been a front figure of the music pirates. My involvement was more akin to that I considered it to be a fun technical task. I don’t really have an ideology in me in that respect, more than that I like free stuff. (Strigeus, quoted in Filter Magazine. See Friman, 2011)
This quote by Ludvig Strigeus illustrates that key actors behind the file-sharing technology of Spotify were not primarily motivated to transform the recorded music market; rather, they were motivated by technological challenges. Spotify incorporated such competences and thereby advanced the shift from a physical product logic to an immaterial digital logic. Respondents also identify the implementation of IPRED in Sweden on April 1, 2009, as a key event. IPRED increased the risk of prosecution for ordinary consumers who downloaded illegally. Hans explains: Sweden enacted the IPRED directive the first of April 2009, which implied that if you downloaded before this date you received an amnesty but if you did it after, you could be prosecuted. The cool thing about this is that between March 31 and April 1, the total Internet traffic in Sweden dropped by 42%. So IPRED had a huge effect.
Here, Hans suggests that 42% of the Swedish Internet traffic before the implementation of the IPRED directive was illegal downloading. Olof, a union lawyer, describes how the normative environment now shifted: In 2005/06 there was a huge debate about pirate activities. The Pirate Party grew strongly. Politicians did not put their foot down and say ‘this is wrong, you must not download.’ Rather, the societal norm was that it was okay to download illegally. The Pirate Bay trial and the enactment of IPRED changed this.
During this stage, Spotify emerges as the actor most capable of leveraging the new institutional conditions by providing alternative action frames (Fligstein & McAdam, 2011, 2012). Spotify's hybrid positioning was central: it needed music rights controlled by record companies, which it secured by offering them shares, while simultaneously disrupting the discrete-sale business model by distributing music through the internet. A growing minority within record companies felt they had little to lose. Mats describes the situation in 2007: There was a rather non-existent digital market but at the same time the physical market had dropped radically, so you kind of realized that if something doesn't happen, I don't know if we'll be here in Sweden in five years, the market could be lost forever. So, it was very much really like saying [that] we have to take this chance, we have to dare to license our music to Spotify.
Streaming did not exist as an available market technology in the late 1990s. Yet record companies’ eventual licensing enabled a rapid shift in consumption. In Sweden, streaming has accounted for about 85% of recorded music consumed since the market stabilized around 2015 (Musiksverige, 2020). Multiple respondents emphasize that Spotify's emergence as global market leader in music streaming depended on prior contention with pirates. The CEO of an independent record company and music publisher Kjell says: These pirate gangs did quite a lot of damage in the short run. But if you look in the rearview mirror, I think that pirating was not such a bad thing. It was a trigger to get started with a lawful activity.
According to our interviewees, Spotify was also widely seen as offering a better, more user-friendly service than piracy, and thus drew consumers away from illegal downloading. Kristina, A&R specialist at a major music publisher, explains: Spotify offers an extremely user-friendly platform where all music exists and they help the listener that can’t find music themselves to find music by offering playlists according to moods and the time of day: ‘Now it's Monday at the office, yes perfect, there is a playlist for that occasion, it's already there.’ Spotify is user-friendly and can be used on the smartphone. The pirates didn’t offer any of that.
Spotify also made used of the new technical skills that were derived from and coupled with the emerging digital infrastructures. Leading music pirate Ulf emphasizes that the same technical skills needed to program the Pirate Bay were needed to build Spotify, thus suggesting a direct link between the technical and social skills needed to accomplish the two: Spotify was built on BitTorrent technology. It was even built by the same person who built the largest BitTorrent client in the world, which they sold to the BitTorrent INC that funded Spotify.
Spotify also demonstrated social skill by implementing a business model new to the music field: shifting the market from ownership to access. The subscription model offered either paid access or ad-supported free access, giving consumers direct access to the catalogue (about 80 million tracks as of November 2022, according to Spotify). In sum, Spotify provided a new action frame that reoriented market system dynamics by redirecting collective action among both consumers and professionals. In Langley's (1999) terms, this represented a critical turning point in the process, through which earlier disruptive practices were translated into a legitimate and scalable configuration. This translation did not resolve conflict outright, but altered its form and direction, setting in motion the conditions under which the market could move from open contention toward a more stable, yet provisional, settlement.
Digital Practice Adaptation and Settlement
According to Fligstein and McAdam (2011, 2012), episodes of contention eventually lead to some form of settlement, in which overt conflict becomes more covert, and a new status quo is established, either through the restoration or reconfiguration of positions and institutions (e.g., norms, regulations, and cultural-cognitive schemas). Here, the outcomes of the contention phase above do not merely represent “end states,” but instead become the conditions that stabilize, and partially re-close, the field. In other words, this bracket (cf. Langley, 1999) makes visible a key driving force of institutional change: the consolidation of new practices as they are normalized, governed, and rendered taken-for-granted once the most visible struggles have been resolved or displaced.
In our case, the general picture is that settlement emerged unintentionally for the challengers. Rather than institutionalizing the Pirate Bay's ideological orientation toward “free music for all”, streaming emerged as the dominant practice and simultaneously enabled incumbents, especially the record companies, to retain and even strengthen their positions. This illustrates a key SAF pattern: challengers may generate field disruption and mobilize collective action successfully yet still lose control over the longer-term institutional trajectory once incumbents (and allied governance structures) regain the capacity to shape rules, norms, and material infrastructures. Put differently, the Pirate Bay's disruptive success became a condition of possibility for a counter-conduct and settlement that contradicted what many pirates had initially wanted.
This reassertion of incumbent strength is reflected in broader industry outcomes. For example, as reported in March 2022 by Music Business Worldwide, Universal Music had its most profitable year ever in 2021, with annual revenue surpassing 10 billion USD (Ingham, 2022). Such results do not mean that piracy “failed” in the short run. Rather, they point to a longer field process in which pirate-driven disruption triggered institutional adaptation and reconfiguration that ultimately benefited incumbents. In SAF terms, the challengers helped open a window of instability, but incumbents were better positioned to shape what the field stabilized into.
Our emerging results thus suggest that this outcome was not simply a story of incumbents crushing pirates. Instead, it reflects a transformation in which pirates mobilized technological competences and collective action that were subsequently appropriated, formalized, and redirected into a legitimate streaming market aligned with incumbent interests. Here, the Pirate Bay can be seen as generating a radical shift in consumption expectations (availability, immediacy, abundance), while Spotify and the record companies converted these expectations into an institutionalized, revenue-generating order. This is consistent with Langley (1999) in the sense that it explicates how adjacent phases are connected through mechanisms that reproduce a “logic” over time, in this case, a shift from disruption to stabilization through appropriation (Fligstein & McAdam, 2011).
With Spotify's rise, the major record companies whose existence seemed threatened in the noughties remain incumbent actors in the Swedish music field (Musiksverige, 2020). The major change concerns Spotify's expanding power and its emergence as a new incumbent actor in the field. Respondents repeatedly connect this to Spotify's technological capabilities and, crucially, its direct relationship with consumers. Arne, CEO of a trade organization, argues: “Spotify was the first to take responsibility for the technology and to have direct contact with the consumer.” Yet, importantly, this occurred in a configuration that also benefited record companies rather than replacing them. Nils, a music journalist, explains: The major record companies owned about 15% of Spotify and that was to Spotify's advantage since they were technical people who came into the music industry. They weren’t primarily music people; they were technical people and partly businesspeople.
This quote captures a central mechanism of settlement: the stabilization of a new market order through a hybrid coalition in which incumbents partially embed themselves in the challenger's organizational vehicle. In other words, Spotify did not overthrow incumbents; it reorganized the field in a way that redistributed power but also created alignment between Spotify and the record companies. This sharply contrasts with the Pirate Bay's project. The Pirate Bay sought to transform both the technological foundation of distribution and the capitalist foundation of the market by sharing music for free. Spotify, by contrast, transformed the technological foundation while maintaining and elaborating the capitalist foundation together with incumbents. This also highlights the difference between The Pirate Bay and Spotify. The Pirate Bay sought to transform both the capitalist foundation and technological foundation by eliminating the market; sharing music for free and distributing online. Spotify, in contrast, transformed the technological foundation while maintaining and elaborating the market and the capitalist foundation together with record companies. Record company CEO Mats describes how incumbents shaped Spotify's model: In the beginning, Spotify didn’t have any thought of launching a paid service. They had only intended to make an advertising-financed one. But in conversations with the rights holders [the major record companies], it was clear that there must be a paid part to the service.
This statement illustrates how settlement involved not only a shift in consumption practice (from ownership to access), but also the consolidation of a field-compatible revenue model. In SAF terms, incumbents exercised their positional power and governance capacities to influence what forms of innovation could become legitimate and scalable. This was not possible with the Pirate Bay, where ideological and legal conflicts made alignment unworkable. Thus, the settlement emerged through a selective institutionalization of the technology of the pirate alternative, while rejecting the ideology of “free access” as a legitimate organizing principle.
Finally, the rise of streaming enabled new forms of market intelligence and control through consumer data, which further stabilized Spotify's position as a new incumbent and reshaped field governance mechanisms. Spotify collects and maps real-time consumer behavior and provides it to other market actors such as record companies. Sven, marketing manager, notes: “We pay a lot of attention to the user data that comes from Spotify, all record companies do that. Prior to Spotify we knew very little about consumers actual listened to music.” This indicates that the settlement was not driven solely by normative change (i.e., pirates losing cultural legitimacy), but also by the consolidation of a technological infrastructure that reorganized market coordination and control. As a result, the field stabilized around streaming not only as a convenient consumption practice, but as a data-driven market order that redistributed power toward the platform while simultaneously restoring revenue stability for incumbents.
In sum, this third phase makes explicit an unintended but patterned outcome: the Pirate Bay's disruptive collective action helped destabilize a physical product logic and normalize digital access expectations, but the settlement that followed institutionalized a different logic than the pirates originally sought. Following Langley (1999), our temporal bracketing shows how this outcome is not an abrupt “ending,” but a processual consolidation driven by contestation, appropriation, coalition-building and, ultimately, infrastructural stabilization, resulting in a temporary settlement that reconfigures, rather than abolishes, incumbent dominance in the Swedish market for recorded music.
Discussion and Conclusion
While prior research has showed how markets emerge through dynamism enacted by conflicts and institutional contradictions, which allow actors to envision and pursue institutional change (e.g., Ertimur & Coskuner-Balli, 2015; Giesler, 2008, 2012; Humphreys et al., 2017), the concrete ways in which institutional multiplicity is enacted is less addressed. This study contributes to macromarketing theory by developing a process model of market transformation that explains how institutional change unfolds through inter-field dynamics across nested strategic action fields. Rather than treating institutional multiplicity as a background condition, we show how exogenous shocks originating in proximate fields reconfigure power relations and enable collective market-shaping, how contention over legitimacy drives hybrid appropriation of disruptive practices, and how temporary settlement stabilizes a new market infrastructure, often producing unintended outcomes that reconfigure, rather than abolish, incumbent advantage.
The discussion proceeds in four steps. First, we synthesize the findings into a process model and specify the driving forces and patterns that connect the three phases of institutional change (Langley, 1999). Second, we reconnect the results to prior work on market system dynamics, institutional work, and collective market-shaping (e.g., Giesler & Fischer, 2017; Lawrence & Suddaby, 2006; Kleinaltenkamp et al., 2021, 2022). Third, we articulate the paper's contribution to macromarketing theory through the lens of strategic action fields and nested markets (Fligstein & McAdam, 2011, 2012; Kjeldgaard et al., 2017; Laamanen & Skålén, 2015; Pedeliento et al., 2020). Fourth, we elaborate managerial and policy implications and reflect on the limits of the study and directions for future research.
A Process Model of Collective Market Transformation Across Nested Fields
Figure 1 summarizes the process model developed in this study and highlights the key mechanisms driving institutional change across phases. Following Langley's (1999) temporal bracketing strategy, the model distinguishes three analytically connected phases, (1) exogenous, infrastructural field-bridging shock, (2) contention and hybridization, and (3) temporary settlement, while emphasizing the mechanisms that link them over time.
First, exogenous shocks originating in proximate fields expand cultural-cognitive and material capacities at population scale, enabling the activation and alignment of dispersed practices into collective action that destabilizes incumbent arrangements. Second, this destabilization gives rise to contention over legitimacy and regulation, during which hybrid actors appropriate disruptive practices and reconfigure power by embedding them in legitimate organizational and technological forms. Third, these dynamics culminate in a temporary settlement, in which a new market infrastructure is institutionalized, often in ways that stabilize incumbent positions and produce outcomes unintended by the original challengers. Rather than depicting a linear sequence of events, the figure thus explicates how outcomes of one phase become the enabling conditions for subsequent phases, clarifying the patterned mechanisms through which collective action, power, and institutional change unfold across nested strategic action fields.
Specifically, exogenous shocks originating in proximate fields, such as digital infrastructure reforms and population-level diffusion of technological competence, reconfigure power relations in the focal market and enable collective action at scale. This collective action destabilizes incumbent arrangements and triggers an episode of contention, characterized by struggles over legitimacy, regulation, and acceptable market practices. Market actors occupying multi-field positions translate these contested practices into hybridized organizational solutions that align disruptive practices with incumbent interests. The final phase illustrates how these dynamics culminate in a temporary settlement that stabilizes a new market infrastructure, often in ways unintended by the original challengers.
By foregrounding these mechanisms and their interrelations, Figure 1 moves beyond descriptive chronology and clarifies how institutional diversity, collective action, and power interact over time to reshape, and possibly undo, markets. Inspired by Pedeliento et al. (2023), our analysis expands emerging discussions of markets as assemblages of strategic action fields (Kjeldgaard et al., 2017; Laamanen & Skålén, 2015). More specifically, the results show how institutional diversity is produced at intersections between proximate strategic action fields, which contributes to market actors’ agency and entrepreneurial capacities to shape markets at the macro level. Crucially, this moves beyond the recurrent general proposition from market system dynamics that markets are “always in a state of becoming” (Araujo, 2007) by specifying how becoming is patterned over time. Inspired by Langley (1999), we identify an iterative sequence driven by three linked mechanisms: (1) infrastructural field-bridging shocks, (2) contention and hybrid appropriation, and (3) settlement through platform-oriented reorganization toward music streaming. These driving forces connect the phases such that outcomes of one phase become the conditions of the next (Langley, 1999). In other words, rather than treating the move from CDs to downloading to streaming as a descriptive chronology, we theorize it as a process in which (i) policy-enabled diffusion of technology makes new practices scalable, (ii) incumbents and challengers struggle over legitimacy and regulation, and (iii) hybrid organizational forms stabilize a new institutional order.
This also clarifies a core point from the theoretical framework: market shaping is not reducible to unilateral intention. Prior research differentiates between defensive and offensive market-shaping strategies (Flaig et al., 2021) and emphasizes that market shaping often emerges through collective activity rather than controlled orchestration (Kleinaltenkamp et al., 2021, 2022). Our results sharpen this further: collective market shaping may originate in proximate fields (digital infrastructures and consumer tech competence), and when it does, it can trigger an exogenous shock that reconfigures the focal market even when no single actor can fully control the direction of the eventual settlement.
Institutional Diversity Enabling Collective Agency in Market Change
By foregrounding the market dynamics and conflicts between The Pirate Bay as a challenger seeking to disrupt the institutional logics of the physical records market and incumbent actors led by record companies seeking to maintain the status quo, we show how divergences can become productive of institutional change (Denegri-Knott, 2004). Interpreting this “dynamic conflict” through the lens of strategic action field (SAF) theory extends prior research on market-shaping by demonstrating how institutional diversity facilitates flows of collective action that propel institutional change in markets.
In the theoretical framework, we argued that market actors’ agency is institutionally embedded and closely intertwined with legitimacy-building processes (DiMaggio & Powell, 1983; Meyer & Rowan, 1977; Nenonen & Storbacka, 2021). Our findings both complicate and extend this institutional insight in two important respects. First, the case demonstrates that the capacity to disrupt institutions can be grounded in cultural-cognitive and infrastructural conditions that are not controlled by the focal market itself. The Home-PC reform and the national expansion of broadband infrastructure, developments in proximate fields, expanded digital skills and competencies and reconfigured the material conditions of consumption at population scale. These developments do not replace institutional work explanations (Lawrence & Suddaby, 2006) but rather specify a critical precondition: institutional work becomes possible, and often necessary, once field-bridging shocks alter what actors are able to do collectively and at scale.
Second, our analysis sharpens the collective dimension of market-shaping emphasized by Kleinaltenkamp et al. (2021, 2022). In the framework, collective market-shaping is conceptualized as emerging through evolving constellations of actors whose interests only partially overlap. The Pirate Bay exemplifies such partial overlap. While ordinary consumers did not share a fully articulated ideology to end the market for physical record sales, their aligned practices nonetheless unintentionally constituted a powerful collective force. This observation supports Kleinaltenkamp et al. (2021) while adding an important nuance: collective market-shaping can occur even in the absence of tight coordination, full consensus, or shared engagement toward a particular goal, provided that practices become sufficiently aligned, which can be enabled by infrastructural diffusion and the widespread acquisition of digital skills.
Beyond Dyadic Conflict: Power and the Temporal Dynamics of Settlement
Our study further demonstrates that extreme market transformation does not unfold solely through dyadic ideological power struggles between challengers and incumbents (cf. Giesler, 2008), but through institutional diversity in which actors occupy positions across multiple fields and are exposed to different, and sometimes competing, discourses and logics (Fligstein & McAdam, 2012). In this regard, we extend Giesler's (2008, 2012) conflictual approach to unintentional market expansion and transformation. As suggested by Pedeliento et al. (2023, p. 16), SAF theory helps remedy the theoretical imprecision of market system dynamics in its treatment of conflict by situating market change within interconnected fields and shifting power relations.
Building on this perspective, and drawing on Schildt et al. (2020), we conceptualize power not as a stable resource held by incumbents alone, but as something enacted through processes of sensemaking that shape which interpretations, identities, and courses of action become plausible and collectively actionable. From this viewpoint, power operates by enabling certain forms of collective alignment while constraining others, often without being deliberately orchestrated. Empirically, The Pirate Bay exercised power by fostering a shared interpretive frame that rendered large-scale file-sharing legitimate and meaningful to participants, thereby enabling collective action that destabilized incumbent arrangements. Yet this power did not translate into durable institutionalization. As anticipated in our SAF framework, power effects frequently unfold in unintended ways, as practices diffuse and are reinterpreted, appropriated, and reconfigured by other actors, ultimately contributing to hybrid forms of settlement in which generative resistance within actors’ sensemaking processes lead to new shared understandings that accommodate the conflicting interests at hand, rather than the wholesale displacement of incumbents (cf. Schildt et al., 2020).
Spotify's rise illustrates precisely such appropriation. By internalizing technical competences and reframing music consumption in a legitimate and scalable way, Spotify converted the socio-technical momentum generated by piracy into a legitimate platform organized market infrastructure for streaming. Here, Langley's (1999) process perspective is particularly useful in which we identify a recurring pattern: disruption followed by legitimacy struggles and subsequent hybrid stabilization. Settlement, in this sense, is not simply “what happened next,” but the cumulative outcome of interactions among field-level governance (e.g., IPRED and the Pirate Bay trial), incumbent adaptation (licensing arrangements and equity stakes), and the social skill of hybrid actors in reframing contested practices (Fligstein & McAdam, 2011, 2012; Hsu et al., 2018). In SAF terms, such settlements are inherently temporary and tend to reassert incumbent advantage; in our case, settlement was also clearly unintended relative to The Pirate Bay's ideological ambition to dismantle commodified music. Importantly, our analysis thus foregrounds the unintended outcomes of collective market-shaping and the pivotal role of multi-field actors in translating disruption into stabilization. These dynamics extend prior accounts of market conflict and institutional change by clarifying how power, agency, and outcomes are redistributed across interconnected fields over time.
While earlier studies show how moves and countermoves between challengers and incumbents may culminate in compromise (Giesler, 2008; 2012), and how discursive and legal struggles shape the acceptability of new consumption practices (Denegri-Knott, 2004; Denegri-Knott & Tadajewski, 2017), we show how compromise and stabilization are also outcomes of collective market-shaping processes that unfold through evolving constellations of actors rather than through unilateral strategies (Kleinaltenkamp et al., 2021). In our case, pirate consumer collectives mobilized technological competences and collective practices with the explicit ambition of undermining capitalist market logics and institutionalizing free access to music. Yet these efforts unintentionally generated the infrastructural, normative, and cultural-cognitive conditions for a highly capitalized, platform-based streaming market.
This outcome underscores power not as a stable attribute of incumbency, but as an emergent effect of collective sensemaking processes that shape which practices and market arrangements become plausible and actionable over time (Schildt et al., 2020). Multi-positioned actors, such as platform developers, policy intermediaries, and hybrid organizations, most notably Spotify, were able to translate practices developed in adjacent technology and pirate fields into legitimate market solutions. This complements research on shifting institutional logics (Ertimur & Coskuner-Balli, 2015) by demonstrating that logics do not merely shift within markets but are actively carried across fields by actors positioned at their intersections, reinforcing macromarketing accounts of markets as assemblages of interconnected strategic action fields (Fligstein & McAdam, 2012).
The Limits of Disruption
Institutional perspectives emphasize that markets are organized through shared understandings and interpretative frames, implying that actors require social legitimacy to function effectively (Coskuner-Balli & Ertimur, 2017; Dolbec & Fischer, 2015; Ertimur & Coskuner-Balli, 2015). In our case, the music pirates did not offer a legitimate or sustainable market model. Rather than seeking to institutionalize an alternative market arrangement, they aimed to disrupt, and in some respects terminate, existing institutional orders in pursuit of political goals that extended beyond the prevailing capitalist logic. Consequently, the pirate version of the recorded music market lacked normative and cultural-cognitive legitimacy. Our analysis therefore suggests that markets are not organized solely around actors’ strivings for legitimacy, but also around the will to power. As our findings show, The Pirate Bay was not primarily invested in building legitimacy; instead, it was oriented toward constituting a powerful disruptive alternative to incumbent institutional logics. Conversely, incumbents, particularly record companies, were able to implement practices that other actors perceived as illegitimate, yet which nonetheless provided the foundation for market organization. A salient example is incumbents’ interpretations of copyright law, which favored their interests but were viewed by others as weakly supported in existing legislation.
This observation reconnects with the notion of institutional work in markets, which encompasses not only the creation of legitimacy for new institutional arrangements, but also the maintenance and reassertion of incumbency under threat (Beninger & Francis, 2021; Dolbec & Fischer, 2015; Lawrence & Suddaby, 2006; Scott, 2008). Our case shows how such maintenance may proceed through alliances with internal governance units (IGUs) and regulatory interventions, while challengers’ power remains socially resonant yet institutionally unsustainable.
Exogenous Shocks from Proximate Fields and Implications for Market-Shaping Research
Finally, our SAF analysis underscores that markets are not shaped solely through social movements originating within the focal market itself (Mamali et al., 2018). Instead, agency may be rooted in proximate fields and generate exogenous shocks that destabilize market institutions. While piracy has long existed in the music field (Leyshon, 2014), the digital pirates in our study were not initially positioned as challengers within the recorded music field. Rather, many operated in adjacent, non-specific technological fields, driven by interests in learning, developing, and diffusing digital technologies at broader societal scales.
In this respect, our study extends institutional research on market-shaping, including work on new market infrastructures (Fuentes & Fuentes, 2022; Lee et al., 2018), lobbying for regulation (Diaz Ruiz et al., 2020), and deregulation (Kjellberg & Olson, 2017). It supports the proposition that extreme forms of market-shaping rarely culminate in outcomes intended by participating actors. Instead, they emerge as unpredictable effects of actors’ temporary capacity to channel exogenous shocks. In our case, digitalization and the digital infrastructuralization of consumers’ households enacted in proximate fields triggered an episode of contention in the music market fields (cf. Hesmondhalgh & Meier, 2018). This contributes to macromarketing theory by articulating a systemic insight: when markets are conceptualized as nested and interdependent, macro-level policy and infrastructural arrangements can create, reconfigure, and ultimately dissolve markets by redistributing skills, access, and coordination capacities across populations. Market-shaping agency, therefore, should not be treated as a property of dominant firms or institutional entrepreneurs alone, but as a temporally emergent effect of how interconnected market systems are configured across fields.
Managerial and Policy Implications: Managing Radical Institutional Disruption from Digital Technology
Our findings offer clear implications for managers and policymakers confronting radical disruption driven by digital technologies. The case shows that such disruption is rarely only competitive; it is fundamentally institutional and infrastructural. Digital change reshapes what consumers can do, how collective action scales, and which forms of legitimacy become viable. Managing disruption therefore requires capabilities beyond product innovation or marketing execution, notably field-sensing, governance engagement, and strategic hybridization.
Treat digital disruption as a field-bridging shock, not a channel shift. Digital disruption often originates in proximate fields rather than within the focal industry (e.g., broadband diffusion and household computing). Managers should develop systematic field-sensing routines that monitor infrastructural reforms, standards, and the diffusion of consumer technological competence. Such developments can rapidly expand the cultural-cognitive pillar of institutions (Scott, 2008) and enable new practices to scale. In our case, incumbents underestimated disruption by framing it as a distribution issue rather than a population-level shift in capability and coordination. Pair enforcement with legitimacy-building pathways. The case illustrates the limits of purely defensive market-shaping (Flaig et al., 2021). While legal enforcement mattered, it did not restore stability on its own. Stabilization required a legitimate alternative that matched the consumer value proposition established by challengers. For managers, this implies that enforcement must be paired with rapid experimentation and legitimation of substitute practices; otherwise, enforcement risks intensifying conflict without resolving it (Denegri-Knott & Tadajewski, 2017; Giesler, 2008). Use hybridization to convert disruption into durable infrastructure. Spotify's success highlights hybridization as a pragmatic route to stabilizing markets under disruption (Hsu et al., 2018). Rather than simply imitating challengers, incumbents can repackage disruptive practices in forms compatible with existing regulative and normative institutions, through new licensing models, access-based value propositions, revenue-sharing arrangements, or partnerships. This reinforces research showing that market outcomes emerge through negotiated, collective processes rather than unilateral orchestration (Kleinaltenkamp et al., 2021, 2022). Manage temporal power and sequencing. A key managerial risk is losing control over how institutional change consolidates over time (Langley, 1999). Managers can mitigate this risk by actively shaping sequencing: early-stage sensemaking and consumer-aligned prototypes; mid-stage engagement with governance actors; and late-stage institutionalization of metrics, contracts, and infrastructures. Platforms, standards, analytics, and interfaces thus function not merely as technical tools but as governance devices shaping coordination and market stabilization. Policy implication: digitalization reforms are indirect market interventions. For policymakers, the study shows that reforms aimed at digital competence and infrastructure function as indirect market interventions. Such reforms can empower consumer collectives, intensify contestation, and accelerate a shift toward digital platform logic, often in unintended ways. Policy design should therefore anticipate second-order effects across nested fields (Fligstein & McAdam, 2011, 2012) and be complemented by governance measures that shape how post-disruption settlements emerge.
Generalizability, Limits and Future Research
Although empirically grounded in the Swedish recorded music market, generalizability from this study resides in the identification of mechanisms and patterned sequences that lead to institutional change in markets. The identified phases; infrastructural field-bridging shocks, contention and hybrid appropriation, and temporary settlement through platformized reorganization, are not unique to music markets. Similar dynamics are observable in media, mobility platforms, accommodation markets, financial services, and parts of healthcare and education, where digital infrastructures alter the cultural-cognitive and material conditions of consumption at scale.
Importantly, the SAF perspective enhances transferability by showing that disruption often originates outside traditional industry boundaries, in proximate technological or policy fields. This insight is particularly relevant for markets undergoing digitalization, where incumbents may misrecognize threats because they emerge beyond the focal field. Finally, the result that collective market-shaping frequently produces unintended outcomes has broad relevance. As emphasized by Kleinaltenkamp et al. (2021, 2022), market transformation often exceeds the intentions of both challengers and incumbents. Our case shows how consumer-driven disruption can ultimately stabilize new forms of incumbency, suggesting that digital disruption is better understood as reconfiguration rather than linear replacement.
While this study foregrounds institutional diversity and collective strategic action, highlighting how field-level changes can shape markets in ways that exceed purposeful action and focal market contexts, nevertheless, several limitations warrant attention. First, the focus on recorded music limits direct empirical generalization to markets such as electric vehicles, e-health, or prescription medicine, where consumer-driven technological innovation may be less visible and where critical competences remain concentrated among incumbents. Future research could examine how exogenous shocks operate in such settings and whether alternative forms of collective agency, such as professional groups or policy coalitions, play comparable roles. Second, our temporal focus on the institutionalization of streaming does not capture subsequent market developments, most notably the revival of vinyl records in the 2010s and 2020s. Although vinyl remains marginal in Sweden in volume terms, its resurgence is theoretically important because it underscores the temporary nature of market settlements (Beverland et al., 2024). Future research could examine such revivals as niche reconfigurations shaped by alternative value regimes (e.g., authenticity, materiality, collectability) and their interaction with platform-based markets.
Ultimately, our analysis challenges the view of institutional change in markets as the triumph of collective action. Instead, we conceptualize it as a dynamic process in which power relations and coordinated efforts reconfigure markets in ways that rarely align with actors’ original intentions. Markets are transformed not simply by who mobilizes, but by how inter-field dynamics structure what becomes collectively possible, and which new arrangements ultimately become institutionalized.
Footnotes
Associate Editor
Anthony John Samuel
Ethics Statement
This study did not involve human participants and therefore did not require ethical approval or informed consent.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Declaration of Conflicting Interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Data Availability Statement
The data are not publicly available due to privacy and ethical restrictions.