When Market Information Constitutes Fields: Sensemaking of Markets in the

Commercial Music Industry

Author(s): N. Anand and Richard A. Peterson
Source: Organization Science , May - Jun., 2000, Vol. 11, No. 3, Special Issue: Cultural
Industries: Learning from Evolving Organizational Practices (May - Jun., 2000), pp. 270-
284
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 When Market Information Constitutes Fields:
Sensemaking of Markets in the Commercial
Music Industry

N. Anand * Richard A. Peterson

London Business School, Sussex Place, Regent's Park, London, NW] 4SA, United Kingdom, nanand@lbs.ac.uk
Vanderbilt University, Department of Sociology, Box 1635 Station B, Nashville, Tennessee, 37235,
richard. a.peterson @ vanderbilt. edu

Abstract processes through which an aggregation of organizations

In this paper we outline a key mechanism through which or-
ganizational fields are constituted. We suggest that in compet-
itive fields, the market serves as a magnet around which groups
of actors consolidate, and that cognition of markets occurs
through the creation, distribution, and interpretation of a web
of information about the "market." To illustrate our theory, we
present a case study of the Billboard music chart from the com-
mercial music industry to show that changes in either scope,
methodology, or political tone with which market information
is presented can provide a major jolt to the participants' under-
standing of their field.
(Field Formation; Sensemaking; Market Information Re-
gimes; Music Industry)
What is taken to be real, is real in its consequences.
W.I. Thomas
The idea of field has attracted the attention of social sci-
entists at least since Kurt Lewin (1951) showed the utility
of this metaphor of magnetic attraction in understanding
behavior in human groupings that are in the process of
consolidating as recognized coherent systems. Institu-
tional theorists have used the term "field" to denote for-
mations of organizations that are similar, have common
practices, or share a certain focus of attention such as a
market. Drawing on a number of earlier uses, DiMaggio
and Powell (1983, p. 148) define organizational fields as
"those organizations that, in the aggregate, constitute a
recognized area of institutional life: key suppliers, re-
source and product consumers, regulatory agencies, and
other organizations that produce similar services or prod-
ucts. "
While very useful, this definition does not suggest the
comes to "constitute a recognized area of institutional
life." This important question has received relatively lit-
tle attention from institutional theorists. A number of case
studies have gone some way towards improving our un-
derstanding of field formation (e.g., DiMaggio 1991,
Leblibici et al. 1991), yet we still lack a general frame-
work that explains the institutionalization of organiza-
tional fields. Such knowledge is especially critical for stu-
dents of culture industries, since mutually defined
boundaries and commonly shared practices constrain both
cognition and action within such fields (Becker 1982).
In this paper we propose a framework to explain the
process of field formation. The paper is organized in
seven sections. In the first section, we develop three theo-
retical concepts central to our framework of field for-
mation: market information regimes, field-level attention
focus, and sensemaking of markets. We believe that com-
petitive fields develop by cohering around a market.
Given that markets are abstract entities, and as such can
be experienced only by participating in the production
and reproduction of commercial transactions, the cogni-
tion of markets generally occurs through socially con-
structed information regimes that compile reports about
"the market." We will argue that in competitive fields,
market information regimes provide a focus of attention
around which groups of organizations consolidate. In the
second section, we review developments that made mar-
ket information contained in Billboard magazine' s
weekly performance charts crucial for making decisions
and signaling reputations for all those in the commercial
music field. In the following four sections, we present a
case study of the technological innovations and entrepre-
neurial actions that forced Billboard to accept a change
in the methodology for compiling the weekly charts in
1991, and touch upon the consequences of this change.

1047-7039/00/1103/0270/$05.00 ORGANIZATION SCIENCE, C) 200Q INFORMS

1526-5455 electronic ISSN Vol. 11, No. 3, May-June 2000, pp. 270-284

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N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
We analyze information contained in the charts before
and after the change, and we infer that changing the meth-
odology for compiling the weekly charts was a major jolt
to the habitual sensemaking structure in the commercial
music field, because it fundamentally changed partici-
pants' understanding of the market for commercial music.
In the seventh and final section, we conclude by discuss-
ing the role of market information regimes in constituting
fields.
Theoretical Background
Most institutional theorists have focused on fields com-
prising government agencies and nonprofit organizations
devoted to education and social welfare, where regula-
tions and professional norms play a central role in struc-
turing the field. In contrast, in the sort of competitive field
focal here, organizations derive critical resources from
their market. The market serves as a magnet around
which groups of organizations begin to cohere. Compet-
itive organizations need to reduce uncertainty about their
market (Pfeffer and Salancik 1978) in order to secure re-
sources from it. In order to reduce market uncertainty,
organizations make sense of their markets not only by
generalizing from their direct experience of it, but also
by relying on information on "market" activity. While it
is often convenient for field participants to presume that
the market is given by nature, in this paper we assume
that cognition of markets occurs through the generation,
distribution, and interpretation of a web of information
about activity in the "market." That is, market infor-
mation is the prime source by which producers in com-
petitive fields make sense of their actions and those of
consumers, rivals, and suppliers that make up the field.
We believe that because organizations in competitive
fields seek to reduce ambiguity and uncertainty surround-
ing their market, the construction of field-wide informa-
tion regimes making sense of the goings-on about the
market is critical to the consolidation of organizational
fields.
Market information regimes have three characteristics.
First, they provide the attention focus for an organiza-
tional field. Second, they essentially serve to help partic-
ipants make sense of market activity within the field. Fi-
nally, market information regimes are socially and
politically constructed and are hence fraught with biases
and assumptions that are largely taken for granted.
Creating Market Information Regimes
Cyert and March (1963) explore the ways that organiza-
tions limit the search for solutions to problems by creating
what they call attention focus. They theorize that orga-
nizations survive multiple conflicting demands largely
ORGANIZATION SCIENCENVol. 1 1, No. 3, May-June 2000 271
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because of the partial routinization of organizational in-
formation processing around a temporal attention focus.
March and Simon (1958) propose that the presence of a
temporal attention focus within organizations creates pre-
dictable routines of information search and interpretation.
Building on the work of Simon (1957), they conclude that
most information processing within organizations occurs
in a negotiated information order comprising limited
searches and truncated interpretation routines. In a similar
vein, Stinchcombe (1990) concludes that organizations
are essentially patterns of activity structured around in-
formation flows. Finally, DiMaggio and Powell (1983)
observed that a key marker of field formation is the
growth in interaction among a set of organizations, ac-
companied by a heightening awareness among partici-
pants of being involved in a common enterprise. A natural
outcome of this process, they conclude, is the need for
processing information about spheres of mutual activity.
We propose to explicitly link the idea of attention focus
broached by March and Simon with DiMaggio and
Powell's notion of information routinization at the orga-
nizational field level. Guided by these two sets of theo-
rists, we suggest that competitive organizational fields co-
alesce around a shared focus of attention-information
about the market. Market information regimes provide a
predictable set of field-wide activity through routinization
in the collection, delivery, and interpretation of infor-
mation about market activity.
In fields composed of organizations competing for the
same resource and product consumers, there is a need for
the creation of information about market activity. Gen-
erally, market information generated at the organizational
level by a single resource or product provider results in
only an incomplete and sometimes delayed picture of
field-level activity (Heimer 1985, Stinchcombe 1990). No
organization in the field has enough current information
on the sales of rival producers to accurately estimate field-
level measures such as total market potential and relative
market shares of all producers. Consequently, in order to
create knowledge about market activity at the field level,
organizations find ways to pool market information, and
this is commonly done in the United States by indepen-
dent information suppliers who emerge to make such data
available (Heimer 1985), creating what we term a market
information regime.
A market information regime comprises regularly up-
dated information about market activity provided by an
independent supplier, presented in a predictable format
with consistent frequency, and available to all interested
parties at a nominal cost. Executives in the consumer
goods industry, for example, routinely use retail point-of-
sale scanner panel data aggregated and sold by indepen-
dent market information suppliers to make assessments
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
about total market size and relative market share (Ing and
Mitchell 1994). The culture industries, dependent on sat-
isfying consumer tastes that change rapidly, develop mar-
ket-defining measures such as the New York Times best-
seller list in the commercial book-publishing field and the
Nielsen ratings for television programming.
Sensemaking and the Construction of Market
Information Regimes
A number of sociologists have observed that markets are
not only economic, but also social and political entities.
White (1981) proposes that markets can be best under-
stood as tangible cliques of producers observing each
other. Fligstein (1996) suggests that market participants
work in a "murky world" and are constantly forced to
construct an essentially political account of their world
that makes sense of the murk and provides a basis for
agentive action. According to DiMaggio and Powell
(1983), mutual information processing within a group of
organizations is a vital sign of field formation.
In competitive market fields, performance-related in-
formation is the raw material from which organizational
actors make sense of their environment. The outcome of
this process is an enactment of a "market." Market in-
formation regimes are the medium through which pro-
ducers observe each other and market participants make
sense of their world. What is more, the regular collection
of specific information focuses the attention of field par-
ticipants on those reports. The existence of a particular
market information regime conveys the impression that
the information is valid and vitally important, and its
availability creates demand for its use in interpreting their
environment (Pfeffer and Salancik 1978). In our view,
participants cognize competitive fields by receiving and
interpreting market information.
Sensemaking devices comprise cues and connections
embodied in routine organizational activities (Weick
1995). In market information regimes, information typi-
cally takes the forms of sales reports, inventory infor-
mation, trade magazine reports of "hot selling" items,
newspaper articles, rumors or gossip with connections to
past, present, and future courses of action. The framing
of market information can vary in terms of the scope of
information collected, the methodology for compiling in-
formation, and the political tone with which the infor-
mation is presented.
Scope is a key criterion for framing market informa-
tion, because framing involves the narrowing of choices
for combining a plethora of preexisting elements (Rao
1998). The scope of a market information regime effec-
tively bounds the range of field actors' attention to a lim-
ited set of activities, and thus inevitably is a political pro-
cess since actors advocating a regime must make
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judgements about necessary, valid, and appropriate fram-
ing for such information (Rao 1998).
The methodology used for framing market information
is vital to the social construction of a market. Thus, for
example, while some fields may develop traditions of
market information assembled according to scientific
methods of sampling and analysis, other fields make do
with information that is little better than gossip and ru-
mor. As often, fields make do with information regimes
that many in the field know to be flawed because the field
has been institutionalized around their use. The Nielsen
ratings, on the basis of which television shows are cut or
renewed, is a celebrated case in point (Vogel 1998).
Choosing an appropriate political tone is critical to
framing market information, because frames need to
make sense to key constituents within organizational
fields (Rao 1998). Market information regimes can be
framed to jibe with the needs of producers, consumers,
suppliers, or regulators, but best serve as a basis of field
formation by managing to seem neutral and objective.
The Commercial Music Field
Field Formation and Consolidation
The commercial music field became organized in the
1880s around sheet music publishers, touring perfor-
mance companies, and musical theater circuits. With the
spread of reliable railroads, the telegraph, and the exten-
sion in 1909 of the copyright law to cover popular music,
what had been primarily local urban markets increasingly
became a national market (Sanjek 1988). While the geo-
graphic scope was becoming national, there were as yet
no large national corporations, rather there were innu-
merable small players in the field. A number of trade
papers-of which Billboard was one-sprang up to pro-
vide information on the comings and goings of artists,
booking agencies, publishers, and venue promoters.
In the period from 1940 to 1955, the commercial music
field reconstituted itself around recorded music. Phono-
graph records, which had been commercially available
since early in the twentieth century, now became the pri-
mary revenue-generating products of the industry. Re-
corded music was played over the radio and on juke-
boxes, heard in movies, and sold to fans. What is more,
songs were rendered in live performances and on televi-
sion as closely as possible to the recorded version (Hirsch
1972, Sanjek 1988). At the center of this reconstituted
field was a number of record companies both large and
small, and a large number of radio stations, most of them
unaffiliated with broadcast networks (Barnouw 1970).
The radio and record industries were bound together
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
by a unique arrangement. Record companies made prod-
ucts which they expected to sell without advertising by
giving them to the radio stations, which in turn freely
broadcasted the records in the expectation of drawing lis-
teners and selling their attention to the merchandisers of
consumer products. Regulations of the Federal Commu-
nications Commission and the Federal Trade Commission
kept these two partners at arm' s length. In practice, it was
easiest to show that there was no collusion when radio
stations programmed those songs that were "objec-
tively" most popular (Barnouw 1970, Ennis 1992).
The sales of individual songs flowed and ebbed rapidly,
especially after the development of "Top 40" format ra-
dio, in which a song is played in tight rotation with just
a few others, on many radio stations across the country.
The critical question for record companies, radio stations,
and record stores was, how to show song popularity?
Some individuals in the field became known as "hit pick-
ers," but because their judgments were open to external
influence, increasing reliance was placed on market-
based criteria, and there were numerous quantitative
sources available. By the late 1940s, record stores, pub-
lishers and music licensing agencies, record industry and
broadcasting trade magazines, industry tip sheets, and
jukebox distributors all generated lists of their most pop-
ular records. The leading radio stations themselves re-
leased rankings of hit records played, and the NBC radio
network broadcasted the widely popular countdown pro-
gram "Lucky Strike's Your Hit Parade" (Sanjek 1988).
Thus, much as Pfeffer and Salancik (1978), Feldman
and March (1981), and Elsbach and Kramer (1996) have
found in quite different contexts, organized actors in the
music field increasingly based their interpretation of past
performance-and created belief structures for future ac-
tivity-on readings of chart information. Each segment
in the field-from song writers who tailored new songs
to what was selling (Korb 1949) to the primarily youthful
audience that weekly listened to "Your Hit Parade"-
came to define the field as a competition between songs
expressed in rankings of popularity by chart positions.
However, what was lacking in the field until 1958 was a
single chart that could be used to reliably couple the di-
verse organizations and interlock the behavior of all ac-
tors (Weick 1979) interested in the popular music market.
In a successful effort to become the single best-
respected source of market information in the commercial
music field, Billboard magazine made reliance on a single
set of numbers possible. Beginning August 4, 1958, the
magazine integrated its three lists "Best Sellers in the
Stores," "Most Played by Jockeys," and "Most Played
in Juke Boxes" into a single weekly chart of a record's
popularity in the "Hot 100" chart (Whitburn 1994). This
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superseded the earlier "Top 100" chart, a combined tab-
ulation that ran concurrent with the other three charts for
stores, radio airplay, and juke boxes. The plethora of
charts existing before the "Hot 100" divided the atten-
tion of the field that was gravitating towards a common
focus (see Ennis 1992). Billboard's fortuitous move,
couched with accounts of accuracy, scope, and timeliness,
interlocked the attention of radio programmers, store in-
ventory managers, and jukebox operators into one source
of information. The "Hot 100" was touted as complete,
accurate, up-to-the minute information useful to all in the
field as a reliable predictor of future sales (Billboard,
1958).
Development of a Market Information Regime
Billboard was no newcomer to the field-defining process
in 1958. In fact, it had been instrumental in the devel-
opment of the commercial entertainment field decades be-
fore the phonograph had been invented. The magazine
helped shape the field in three ways. First, it defined the
scope of the field by making choices about domains of
entertainment to include or exclude. The magazine began
in Cincinnati in 1894 as Billboard Advertising, "a
monthly resume of all that is new, bright, and interesting
on the boards," reporting on all aspects of live popular
entertainment. The demand for up-to-date information
among those working on the popular stage and in enter-
tainment generally was so great that by 1901 the maga-
zine was being sold on newsstands in all major cities
(Schreiber 1979).
By 1913 Billboard was calling itself "The Show World
Encyclopedia" and 39,500 copies were being circulated
worldwide (Schreiber 1979). Columns that year included
the following: Vaudeville Music and Burlesque, Circus
and Wild West, Fairs and Expositions, The Amusement
Profession, Lists of Films (and their release dates), and
London Newsletter. The extensive classified advertising
columns noted both employment opportunities for spe-
cific kinds of acts and the availability of those with spe-
cific skills. Billboard prospered by incorporating news
and features about all major branches of popular enter-
tainment-adding and dropping sections as the popularity
of genres waxed and waned. Over a century, the magazine
moved from being an information source for participants
in the many developing genres of the emerging entertain-
ment industry to a trade publication focusing on com-
mercial music, thereby helping to frame the individuali-
zation and consolidation of that field (Ennis 1992).
Second, Billboard has institutionalized the methodol-
ogy of reporting market information within the field by
creating performance charts. This practice can be traced
back to 1913, where one of the columns- "Popular
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
Songs Heard in Vaudeville Theaters Last Week" -col-
lated information from New York, Chicago, and San
Francisco. It was not until the mid-twentieth century,
however, that charts focusing on recorded music became
a regular feature (Whitburn 1986). While rival magazines
such as Talking Machine World, Variety, and Metronome
included charts, Billboard alone framed its methodology
as statistically sound. In the integrated "Hot 100" chart
launched in 1958, the magazine cited in detail the weight
assigned to each of the components, including radio air-
play, jukebox plays, and recorded sales. Over the years,
Billboard refined the methodology for compiling its per-
formance charts to convey the impression of presenting
statistically reliable and valid data that field participants
could use as the standard source of information about
market activity. For example, in 1957 each week's chart
was accompanied by an official looking seal and a state-
ment that said, "Sample design, sample size, and all
methods used in this continuing study of retail record
sales are under the direct and continuing supervision of
the School of Retailing of New York University" (see
Billboard 1957, p. 22).
Third, Billboard tried to serve the interests of important
constituents of the field by taking a seemingly objective
and neutral political tone (Sanjek 1988). Throughout the
first half of the twentieth century, phonograph machine
companies, song publishers, radio networks, and movie
interests, as well as several powerful labor unions, vied
for favorable legal rulings and Wall Street financing
(Sanjek 1988). Billboard served as a major information
resource for all these interests in the consolidating re-
corded music industry and, unlike its principal early rival
in that field, Talking Machine World, managed to report
the contests without becoming a clack for any. More ac-
curately, through its regular weekly columns, it became
a mouthpiece to the others for each of the contending
interests, and in its news articles it disseminated infor-
mation on the drift of legal rulings, technological ad-
vances, corporate restructuring, and capital flows. Claim-
ing the use of tamperproof scientific sampling methods
buttressed the magazine's attempt to frame its political
tone as neutral, objective, and performance-based.
Use of Market Information for Sensemaking
The scope, methodology, and political tone of Billboard's
information regime makes it a unique and crucial source
of sensemaking for participants in the field (Ennis 1992,
Lopes 1992). While five major conglomerates dominate
the United States. Then in 1991, Billboard changed to
the industry in the United States, much of the work of the
field is accomplished in a diverse community of smaller
organizations (Sanjek and Sanjek 1996). The large con-
glomerates outsource much of the creative, production,
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and promotion work to specialized firms and individuals
ranging from songwriters to artists and from repertoire
agents and producers to promoters and distributors. The
quickly interpretable chart information is used to coor-
dinate and evaluate the performance of various organi-
zational subunits (Peterson and Berger 1971). Market
success reported in the form of chart information serves
as a common coin while making decisions about the al-
location of resources and the extension, retention, or elim-
ination of various interorganizational relationships. In the
words of Roger Karshner (1971, p. 115), former vice-
president of Capitol Records, "Everybody in the record
business is constantly lipping chart potentials, trade picks,
chart positions, and chart life. In fact, the entire industry
rises and falls upon the waves of this silly number game."
Chart information is also used to make attributions
about individual careers. In the commercial music field,
job tenure is continually under review and career lines are
untidy. Individuals are regularly promoted, reassigned, or
fired based on the success of work with which they have
been associated (Karshner 1971, Peterson 1997). This
continual change of personnel means that actors in the
field must develop a standard system for evaluating career
success. Thus the very untidy irregularity of individual
careers forces all in the field to base their attributions
about individuals' potential on the standardized infor-
mation provided by the music charts. Information con-
tained in the chart serves as both signal and symbol
(Feldman and March 1981) to justify the making of de-
cisions pertaining to individuals, organizations, and mu-
sic genres.
Compiling Information for the Billboard
Album Chart
In the decades since the introduction of the "Hot 100"
singles chart, much has changed in the production and
marketing of music. The multisong "album" format, first
in the form of vinyl records, then tape cassettes, and dig-
ital CD discs has replaced 45 rpm singles records as the
prime source of profit for record labels. Singles usually
serve as loss leaders in the marketing of albums. Conse-
quently the Billboard "200" album chart that tracks these
has replaced the "Hot 100" singles chart as the most
relevant indicator of market acceptance. Beginning in
1955, the Billboard album chart was compiled weekly
with sales information from a sample of record stores in
using sales figures collected at the point-of-sale, that is,
from each cash register transaction in most record stores
in the United States. In this section, we look at the events
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
leading up to this change, criticism and resistance sur-
rounding the change, and the actions that Billboard took
to make the charts compiled from the new methodology
conform to the old.
Establishing Chart Validity and Reliability
From its inception, the album chart was the subject of
close scrutiny and criticism. These concerns can be di-
vided into questions of validity and questions of reliabil-
ity. In the early years chart compilation was supervised
by Billboard's market research department, which cre-
ated a panel of about 200 reporting sales outlets repre-
senting a weighted cross section of stores selling com-
mercial music records.
Each week Billboard's research staff would fax the
panel of stores a list of several hundred albums it judged
to be among the top sellers of the week.' Stores reported
estimates of their week's sales of records, and this infor-
mation was weighted to reach a fair estimate of the na-
tional sales of each record. Finally, the 200 albums with
the highest raw scores were ranked from one to 200, and
any album that had significantly increased its raw score
from the prior week was given a "bullet" to indicate
accelerating sales. The validity of this method of com-
piling the charts only rarely became the subject of public
complaint, largely because of Billboard's framing of its
methodology as "scientific sampling." There was, how-
ever, plenty of room for concern. As we will show later,
a large class of records and a major genre of commercial
music were being systematically underreported by using
this methodology.
Much attention was focused on the reliability of Bill-
board' s methodology because, outside of the research de-
partment, it was impossible to independently verify the
accuracy of the rankings. Over the years there was a cho-
rus of complaints that it was possible to directly or indi-
rectly "buy chart position." At least four different tactics
were regularly mentioned. First, bribing reporting outlets
to report more (or less of rivals') sales. Second, influenc-
ing Billboard to add what were asserted to be "more rep-
resentative" reporting outlets or drop allegedly "biased"
ones. Third, buying advertisements in Billboard maga-
zine in exchange for improved chart position, and, more
infrequently, directly influencing Billboard editorial or
research department personnel. Descriptions of these al-
leged practices can be found in Karshner (1971), Denisoff
(1986), Dannen (1990), and Negus (1993).
While Billboard denied their existence, such practices
were widely considered to be part of the cost of doing
business in the commercial music field (Dannen 1990).
Many people in the field held what seem to be two con-
tradictory views of the charts. While alleging instances
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of the unreliability of the charts, they simultaneously de-
fined market activity in the field in terms of the charts
and based their actions upon them. This dual view served
most in the commercial music field because they could
cite the rising chart position of their product as proof of
its success while attributing their failures to specific errors
in the charts or to other people' s "manipulation" of sales
figures.
The SoundScan Revolution
In the mid 1980s record store chains began introducing
barcode-reading sales registers that automatically com-
municated each purchase to a computer. Scanners were
introduced in stores primarily to facilitate the stores' own
supervision and inventory control needs. In other con-
sumer goods fields such technology was also being used
to accurately track the relative popularity of competing
consumer products and to monitor the effectiveness of
specific sales promotions (Ing and Mitchell 1994). Noting
these developments, two entrepreneurs, Mike Fine and
Mike Shallet, started a company called SoundScan Inc.
in 1987 to exploit the information available because of
point-of-sale technology. The company proposed to ag-
gregate sales information from record stores and sell it
back to interested decision-makers in the commercial mu-
sic field. SoundScan Inc. would make possible direct
weekly retail sales figures, and when aggregated in a
computer database, the information could not only help
control inventory better, but also be asked to answer de-
tailed market research questions on the consumption pat-
terns of record buyers.
At the outset, Fine and Shallet were interested in hav-
ing the market research application of their technology
sold to industry subscribers, and did not intend it as an
alternative methodology for compiling music charts
(Shallet 1996). The two entrepreneurs quickly realized
that when aggregated for a representative segment of all
U. S. outlets, the point-of-sale information would make a
fast, accurate, and more tamper-resistant alternative to the
Billboard methodology of the time (Terry and Christman
1990). SoundScan's proposed methodology promised to
overcome most of the reliability and validity problems
inherent in Billboard's way of compiling the charts.
SoundScan Inc. moved aggressively to sign exclusive ar-
rangements with a number of the largest record store
chains to claim all of their point-of-sale data, thus, in
effect, cutting Billboard and others out of the new field
of information exchange. Although Billboard magazine
asserted that it was forming an information network of its
own, in reality it had been upstaged by SoundScan's pur-
chase of exclusive rights to sales information.
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
Resistance to Change
Although SoundScan received broad support from record
retailers for its chart compilation proposal, there was a
howl of protest from other elements in the field, and es-
pecially from distributors associated with the major rec-
ord-making conglomerates (see Goldberg 1991, Haring
1991, Village Voice 1991a, 1991b). It was claimed that
the SoundScan-based chart would be highly volatile, that
it would hurt smaller labels, new and upcoming artists,
and those records that generally occupied the lower half
of the chart. Reportedly, the reason for at least some of
the complaints was the realization that the new chart
could not be "manipulated" in the same ways that the
old one had been (Mayfield 1995). In an effort to force
Billboard to change its mind about allying with
SoundScan Inc., several major record firms withdrew ad-
vertising support for the magazine and refused to sub-
scribe to the detailed market information that SoundScan
was making available (Village Voice 1991b). However,
despite such pressures, Billboard announced an agree-
ment to publish the new point-of-sale-based chart, with
SoundScan's barcode insignia appearing alongside the
Billboard logo. The new chart debuted in Billboard on
May 25, 1991 (Terry 1991a).2
Impact of the SoundScan-based Chart
The introduction of SoundScan was intended to affect
only the methodology of the Billboard market informa-
tion regime as represented in the album chart, without
changing the substance of the chart itself. From the first
week, however, it seemed clear that changing the meth-
odology changed the content of the chart as well, and
these changes directly implicated Billboard in the politics
of presenting market information to the field. Before the
advent of SoundScan, there was speculation among many
in the music field that some specific genres of music
would be hurt. Most often the prediction was that heavy
metal or hard rock music and rhythm & blues (R&B)
artists would find it more difficult to get onto the chart
(e.g., Haring 1991).
In order to test whether the new basis of collecting data
for the chart did, in fact, make a difference in the distri-
bution of genres on the Billboard album chart, we care-
fully compared the weekly charts for 13 weeks before and
after the advent of the SoundScan methodology. We re-
corded similarity and difference in trends for chart dy-
namics and relative share of various categories of artists
and genres.3
The major genres appearing in the album chart are pop
(which has the largest market share), R&B, heavy metal
or hard rock (here termed "heavy rock"), and country
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music. To test the impact of SoundScan on these genres,
we counted the number of records in the R&B, heavy
rock, and country genres, charting twelve weeks before
and after. Note that pop music was the excluded genre,
because by accounting for changes in three out of four
genres, we can infer about changes in the fourth. The
sampling period is restricted to a quarter of a year before
and after the change because the music industry is inher-
ently cyclical and, for longer periods, cyclical trends may
confound the impact of the change.
Identifying a canonical 1991 record for each of these
genres is easy, but there is great difficulty in deciding
exactly where to draw the boundary between each of
these genres and pop or rock music. For both R&B and
country music, we counted in the genre every Billboard
album chart listing which also charted on Billboard's
R&B and country charts. The solution for classifying
heavy metal or hard rock albums was not so simple, since
there is no Billboard chart for that genre. To count albums
in this genre, we identified artists by using the Guinness
Who's Who of Heavy Metal (Larkin 1992), and Bill-
board's 1991 and 1992 annual features on the heavy
metal business (Billboard 1991, 1992).
The introduction of SoundScan led to three major
changes (please see Figure 1). First, there was a change
in the relative strengths of various music genres repre-
sented in the chart, with country music making spectac-
ular gains largely at the expense of pop music. Second, a
greater number of albums reached the much-vaunted
number-one chart position, and reached peak chart posi-
tion more swiftly. Third, specific types of records were
advantaged or disadvantaged. In particular, there was a
fall in the number of independent labels and new artists
appearing in the chart, and the proportion of R&B, coun-
try, and heavy rock records on the Billboard album chart
pre- and post-SoundScan are shown in Figure 1.
Shifts in Genre
Contrary to predictions, there was no big loser among
these genres. In the 12 weeks before SoundScan, the av-
erage number of R&B albums was 53.6 per week, and in
the 12 weeks following, it was 53.1. A t-test for difference
in means (t24 = 0.32) was not significant. Heavy rock
declined from 36.1 to 31.0 albums on the average every
week (t24 = 6.8, p < 0.01).
The big change revealed in Figure 1, however, is for
country music. In the quarter-year before SoundScan, an
average of 17 country music albums charted per week,
while, after its introduction, the number was up to 32.3
albums (t24 = -23.05, p < 0.01). Before SoundScan, an
average of two country music albums listed among the
top-50 positions in the album chart; the number tripled
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry

Table 1 Changes in the Billboard Album Chart

Pre-SoundScan Post-SoundScan Difference

CHART VOLATILITY IN THE

NUMBER ONE POSITIONa
Climbing time to become number one 13.6 weeks 2.9 weeks - 10.4 weeks
(s.d. = 13.5 weeks) (s.d. = 3.4 weeks) (Mann-Whitney U = 8.5, p < 0.006)

Tenure in the number one position 9.8 weeks 3.3 weeks - 6.6 weeks
(s.d. = 8.4 weeks) (s.d. = 4.2 weeks) (Mann-Whitney U = 28.0, p < 0.35)

SMALL & INDEPENDENT LABELSb

Independent labels placing albums 30.9 per week 23.7 per week - 7.2 per week
(s.d. = 1.6/week) (s.d. = 1.3/week) (t24 = 12.84, p < 0.01)

Independent label albums in the chart 35.4 per week 29.6 per week -5.8 per week
(s.d. = 2.2/week) (s.d. = 1.9/week) (t24 = 7.27, p < 0.01)

NEW ARTISTSb
New artists albums entering the chart 2.8 per week 1.7 per week - 1.1 per week
(s.d. = 1.7/week) (s.d. = 1.3/week) (t24 = 1.81, p < 0.1)

Notes: (All figures are means, standard deviation indicated as s.d.)

aVolatility was observed for 52 weeks pre- and post-SoundScan.
bVolatility was observed for 12 weeks pre- and post-SoundScan.

Figure 1 Genre Composition of the Billboard Chart Making Sense of the Revealed Importance of
70 Country Music
Interestingly, before the introduction of SoundScan, there
60 was very little discussion of the possibility of country
music's share changing (e.g., Village Voice 1991a), al-
50 though, post-SoundScan, country music's increase was
the major focus of industry attention. How did those in
o40
the commercial music field make sense of the new infor-
mation on country music revealed by the SoundScan
F. 30 chart? Three distinct explanations were proposed, and
these reveal much about the place of the charts in defining
20
the commercial music field. The first explanation was that
country music's gain was an artifact of the sources re-
I0
porting to SoundScan (e.g., Terry 1991b). In the first
month of the introduction of SoundScan, Wal-Mart,
0
Kmart, Target, and similar discount chain stores where
-13 -11 -9 -7 -5 -3 -I 2 4 6 8 10 12
country music sales might be disproportionately large
Week # Pre- and Post- SoundScan were reporting their data, but a number of trend-setting
independent stores and urban chains were not yet on-line
+ Heavy Rock *Country -R & B]
(Terry 1991b, Verna 1991). This explanation proved in-
adequate when over the next eighteen months the bulk of
following the introduction of SoundScan. Clearly, the all stores selling popular music albums reported to
previously used methodology was underreporting country SoundScan (Zimmerman 1991). Country's proportion did
music albums' sales relative to other genres. Because the not drop, so the rise in country music was not just an
count for R&B albums stayed almost the same and that artifact of the type of stores initially sampled.
of heavy rock declined by about 5 albums, we can infer The second explanation was that country music in
that country' s gain came mainly at the expense of the pop March 1991 was just beginning to boom in sales nation-
genre. ally (Gates and Peyser 1991). The huge one-time jump

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N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
when SoundScan was introduced on May 25, 1991 makes
this idea implausible. Beyond this, there are corroborating
indications that country music had been increasing its ac-
tual market share well before the advent of SoundScan.
For example, country music radio listenership was rising
slowly all through the late 1980s, and picked up momen-
tum in the years 1989 through 1991. What is more, coun-
try music albums certified as "Gold" or "Platinum" by
the Recording Industry Association of America (RIAA)
rose steadily in the late 1980s, well before the advent of
SoundScan. The largest gain in country music album
sales occurred in 1992, when the market share for country
music jumped from 12.5% of all albums to 16.5% well
after SoundScan had been introduced (Country Music As-
sociation 1993). Thus, the second line of sensemaking
suggesting that country music sales rocketed at the time
SoundScan was introduced is not supported by these fig-
ures.
The third and most plausible explanation for country's
spectacular gain on the SoundScan chart was that country
music had had larger sales than were being reported all
along, and that these had been underreported when Bill-
board's old chart compilation methodology was used
(Village Voice 1991a). The reason for the underreporting
had to do, it was argued, with retailers' view that country
music was a separate category with its own special cli-
entele. Stores typically segregated country music in a
separate set of racks in the store, and only those that were
selling exceptionally well were brought to the front of the
store. With this mindset, record stores and retailers re-
ported their country music sales for the Billboard country
chart, but did not bother to report the same for the Bill-
board album chart (Mayfield 1995). Another explanation
is that the Billboard research department did not put many
country music records on their list of albums to be sur-
veyed. From whatever sources they came, these biases in
Billboard's methodology led to systematic errors in the
estimates of the best-selling records, consequently lead-
ing field participants to underestimate the market for
country music vis-a-vis other genres.
Interestingly, executives in Nashville were aware that
country music's popularity had been growing at a fast clip
well before the advent of SoundScan, based on their
knowledge of the RIAA certifications, radio listenership
trends, and internal corporate sales figures. However, they
were quite glad to go along with the report that a boom
in country music was just getting started, because it fit
their interests in promoting country music (Gubernick
1993). This line of sensemaking was fanned by a flurry
of media attention given soon after the advent of
SoundScan to "the new country boom" by the following
national publications: Newsweek (Gates 1992), the New
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York Times (O'Connor 1992), Forbes (Gubernick and
Newcomb 1992), and a cover story in Time magazine
(Painton 1992). As prominent national media publica-
tions focused on "the new country boom," executives at
conglomerate headquarters began to take notice, and
started allocating larger budgets to country music divi-
sions (Gubernick 1993).
Chart Volatility
In the year prior to SoundScan, the five albums that
reached the number one position on the chart took an
average of 13.6 weeks to climb to the top spot. In the year
following SoundScan, for the 16 albums that reached the
top spot, the climbing time was down to 2.9 weeks. Be-
cause one of the two groups in the sample was small, the
t-test with its assumption of normal distribution of error
terms is not appropriate here. We used the nonparametric
Mann-Whitney test, which transforms the data into ranks
and checks if the two groups are from the same distri-
bution. The test reveals that the two groups are signifi-
cantly different (U = 8.5, p < 0.006), thereby suggesting
that chart volatility was higher after the introduction of
SoundScan (see Table 1).
In the previous regime, record industry executives, re-
tailers, and artists assumed that a record gradually finds
its audience before reaching the top end of the charts,
whereas SoundScan data revealed that generally an album
sells strongest in the weeks just following its release. Pre-
viously, the myth was that a record had to "pay its dues"
in terms of being initially "plugged" at the right time
and in the right places before it could build up the mo-
mentum to chart nationally (Negus 1993). This rational
myth was supported by institutional structure geared to-
wards promoting records through canvassing of radio
program directors and retailers, and included some prac-
tices that were revealed to be less than legal in the wake
of the "payola" scandal (Dannen 1990). With the intro-
duction of SoundScan it became clear that flaws in Bill-
board's research methodology led to some inaccurate re-
porting on chart positions for newly-released albums, and
consequently the elaborate myth structure surrounding
the promotion of records had to be modified to take into
account the patterns emerging from the SoundScan data.
Armed with the new knowledge indicating that most
records sell strongest initially, executives concentrated
their marketing efforts before the release of an album
rather than after (Shallet 1996). Given the rapid reporting
and the early promotional push, industry actors came to
expect that releases would do well right out of the box or
not do well at all, and more quickly gave up on albums
that did not perform well in the chart (Brown 1994).
Indeed, the homespun advice given in Nashville to artists
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
releasing albums became "get hot or go home"
(Gubernick 1993).
Numerous observers within the music field had pre-
dicted that the SoundScan chart would show more vola-
tility than the pre-1991 Billboard chart (Village Voice
1991a, 1991b). On balance this has proved correct, as
evidenced by the time required by albums reaching the
number one spot to climb to the top. Also, in the entire
year prior to SoundScan the top album held its spot for
an average of 9.8 weeks, while in the year following the
average was down to 3.3 weeks, although the difference
is not statistically signficant (Mann-Whitney U = 28,
n.s.). Assuming that the quality of music did not change
significantly, the volatility of records at the number-one
position reveals a real difference between the old and the
new method of calculating a record's popularity.
Impact on Independent Labels
Trade journals other than Billboard had predicted that the
SoundScan methodology would hurt independent label
firms' releases (Village Voice 1991a, Haring 1991). The
SoundScan methodology in practice did reduce charting
opportunities for independent label albums.4 In the twelve
weeks prior to SoundScan, an average of 30.9 indepen-
dent label firms had placed albums in the charts every
week. In the twelve weeks after, the average decreased to
23.69 per week, or approximately seven less firms (t24 =
12.8, p < 0.01). Correspondingly, the number of albums
distributed by independents decreased from 35.38 albums
per week to 29.6 (t24 = 7.27, p < 0.01). In contrast,
Billboard magazine tried to draw attention away from
these declines for independent companies by attributing
the exceptional success of a few independent labels, es-
pecially those in the rap genre, to the SoundScan meth-
odology (e.g., Blatt 1992, McCormick 1992). We did not
find much attribution in the trade press about the specific
causes of the decline, save for references to the reliability
problems in Billboard's earlier methodology. We spec-
ulate that the key explanation for the difference lies in
the fact that prior to SoundScan's introduction, attracting
the attention of Billboard's research staff was vital to
charting in order to ensure that album releases would be
included in surveys sent to stores included in the mea-
surement panel. In the previous regime, promoters of
some independent labels might have been particularly
successful in getting albums noticed by Billboard, but this
tactic was no longer useful in the SoundScan era.
Reconciling Market Information
Regimes
Bell (1984) has shown that the form in which market
information is presented significantly influences the man-
ner in which it is interpreted by field members. The in-
stitutionalization of a particular reporting framework is
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often an unintended consequence resulting from choices
made at the outset by the providers of market information.
The look and feel with which information is formatted
tends to become taken for granted among those who ha-
bitually pay attention to the data contained in it. In firms
adopting sophisticated computing technology for analyz-
ing the business environment, executives often insist on
data being presented in reports and formats they are used
to, without fully understanding or even investigating the
depth of information that newer data processing tools
make possible (Mintzberg 1973).
While the SoundScan system now seems inevitable,
natural, and a taken-for-granted structuring element of the
commercial music industry, its institutionalization was
made difficult by the inertial form of the Billboard chart.
There is an important difference between the scope of
information gathered in the older panel survey method
used by Billboard and the new point-of-sale method used
by SoundScan. The panel survey methodology generated
ordinal (or ranking-type) data derived from nominal cate-
gories in the survey (respondents were asked to check
"top," "strong," and "good" sellers). SoundScan, on
the other hand, gathers absolute figures on sales, that is,
a precise count of the actual number of units sold at retail
outlets linked into the system. SoundScan's point-of-sale
data could provide a wider range of detailed information
(such as breakdowns by region, city, store, and type of
audio format) than had been possible using the old meth-
odology (Shaw 1991).
Fine and Shallet first introduced point-of-sale figures
as a substitute for Billboard' s relative performance charts,
but few in the music industry had interest in using the
data in this form. Therefore, the new SoundScan-based
information had to be presented in the familiar form of a
relative-position chart (see Lander 1991), at best a mar-
ginal improvement on the thoroughly institutionalized old
methodology. More important, it was vital that the new
chart look like the old one and, in so far as possible,
change week-by-week in the same way. Billboard's de-
cision to preserve the format and, as far as possible, rep-
licate the content of the album chart, led to an important,
unanticipated consequence. In order to preserve the in-
stitutionalized avatar of the old album chart, Billboard
was forced to create two entirely new categories of charts:
the "Catalogue Album Chart" and "Heatseekers" in or-
der to provide more detailed information on specific art-
ists and albums.
The Catalogue Chart. With SoundScan technology
reporting the sales of all albums (rather than just recent
releases), Billboard had to deal explicitly with the cata-
logue album issue, because several dozen older albums
that continue to sell well many years after their release
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
would take up much of the lower half of the chart. Ex-
amples of such catalogue albums include Pink Floyd's
"The Wall" and "Best of . . ." compilations by the likes
of Patsy Cline, the Eagles, Elvis Presley, the Steve Miller
Band, and Led Zeppelin. To legitimatize excluding cat-
alogue albums from the SoundScan chart, Howard
Lander, the publisher of Billboard, announced the crea-
tion of a separate 50-position "Top Pop Catalogue Al-
bum" chart saying that "Billboard has a historic com-
mitment to foster the development of new talent" (Lander
1991, p. 77). Continual reminders of the fact that some
records produced twenty to forty years earlier still outsell
most current releases would bring into question the entire
strategy of focusing on new products, which is the bed-
rock assumption on which the entire commercial music
industry is constructed.
The political agenda in forming the catalogue album
chart was to focus field attention on releases by currently
active artists. Executives in the industry went along with
Billboard's strategy of not including catalogue albums
because it opened up the top 200 album chart to accom-
modate poorer-selling new releases for which the exec-
utives were directly responsible (Mayfield 1995).
The Heatseekers Chart. The fifth week after the ad-
vent of SoundScan, an album by the new rap group Nig-
gaz With Attitude titled "Efil 4 Zaggin," debuted at num-
ber two and moved up to the top spot in the following
week. This sort of chart performance was totally unprec-
edented for a debut album from a new band. Some ob-
servers in the music industry took this to be a sign that
SoundScan would help break new acts in a way that the
old Billboard chart did not (Blatt 1992, McCormick
1992). However, the success of this debut release was the
exception. According to our data, in the twelve weeks
prior to the advent of SoundScan, an average of 2.8 new
artists (that is, artists who had never charted before) ap-
peared on the albums chart (see Table 1), while in the
twelve weeks following, the number was just 1.7 per
week (t24 = 1.8, p < 0.1). Although the difference is
only marginally significant, field participants extrapolated
this weekly figure to yearly, and perceived this change to
be devastating (Village Voice 1991 a, Haring 1991), be-
cause the implication was that 88 new artists who might
have otherwise debuted in the album chart could no
longer do so.
Taking a cue from the catalogue albums experience,
the publishers of Billboard created a separate, 40-position
"Heatseekers" chart, open only to artists who had not
yet charted on the album chart. They also introduced a
column devoted to "new and emerging acts." Introduc-
ing the new feature, Geoff Mayfield of Billboard's re-
search department explained: "Breaking new artists has
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become more difficult than ever. We intend to ease the
process by attempting to catch the buzz on those acts who
have never hit the upper reaches of the existing charts"
(Mayfield 1991a, p. 95). Mayfield's justification shows
that Billboard was intentionally going beyond simply re-
porting data to helping shape the music field by exercising
control over the scope of market information presented.
Evaluating the Effects of SoundScan
The changed information regime ushered in by Sound-
Scan has directly reshaped the commercial music field
revising sensemaking by participants in at least three
ways.5
1. Success Seen as "Unit Sales" not "Chart Posi-
tion." Before the use of SoundScan, information on
sales figures, inventory levels, and distribution losses,
such as spoilage and returns, moved slowly through cor-
porate information channels. Field participants had no ac-
cess to real-time data on how well their records were do-
ing at the retail level nationally. In such a scant
information environment, they focused on chart position,
and paid attention to whether a record was gaining or
losing a "bullet," because the bullet was the best avail-
able estimate of whether a record was picking up or losing
sales momentum. Because industry executives relied on
the music charts to make decisions about record produc-
tion and promotion, there was little point in reconciling
chart-based perceptions with sales data as they became
available months later (Dannen 1990).
SoundScan ushered in an era of real-time information
on sales and inventory levels. With the new more sensi-
tive measure, it was easier for record label executives,
artists, promoters, and retailers not only to track sales, but
also to correlate chart position movement with news-
making events involving artists (Gubernick 1993). Ex-
amples of such events include an appearance on national
television, the winning of a Grammy or other coveted
award, a focused targeted promotional campaign, or sig-
nificant personal events in the artists' lives. Construction
of belief structures around presumed causal relationships
between chart position movements and news-making
events soon became routine in the trade press (e.g.,
Mayfield 1992a), and music industry executives shifted
away from focusing on the relative ranking of records
(Dannen 1990). In the process, "unit sales" replaced
"chart position" as the prime yardstick for measuring an
album's commercial success (Mayfield 1994, Brown
1994, and Shallet 1996). SoundScan also makes possible
genre-free comparison of album sales, because charts
compiled with the new methodology schematize the dy-
namics of the entire commercial music field in a way that
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
the old Billboard album chart did not (and could not) do.
The information provided by SoundScan has helped con-
glomerate executives evaluate each of their genre-based
divisions on a uniform standard and make decisions to
expand or cut them accordingly (Brown 1994).
2. Consolidating Control. Our analysis shows that
multilabel conglomerates gained chart positions at the ex-
pense of independents, whose share of the top 200 posi-
tions went down by 17%. In a parallel study, McCourt
and Rothenbuhler (1997) have found a similar trend.
They conclude that information provided by SoundScan
leads to consolidation of control within the field, because
it "increases the efficiency of commercial exploitation by
those who can afford it, while decreasing opportunities
and raising costs for others" (p. 213). Smaller, less fi-
nancially sound record labels cannot afford the high cost
of obtaining detailed market information from Sound-
Scan, which can impact their decision making adversely
and leave them in a poorer position to compete with the
larger, better-financed labels.
3. Segmenting Markets. As the previous section in-
dicates, SoundScan can enable the homogenization of the
field through consolidation of control. Paradoxically, the
detailed information provided by SoundScan can also
help organizations in the field adapt to the growing trend
in fragmentation and narrower segmentation of the music
audience and the consolidation of new niche markets such
as those in Latin music, dance music, and alternative
country music (Hesmondhalgh 1996). Organizations that
have access to SoundScan information and sufficient ex-
pertise to interpret it can identify opportunities early and
exploit them. Music industry executives well-versed in
the use of the technology can quickly spot emerging
trends in an isolated niche and mobilize sufficient re-
sources to target customers in that market, the net effect
of which is the increasing fragmentation of market offer-
ings. Similarly, Billboard magazine is in a position to
introduce new charts by identifying classes of actors
(such as new artists) or new, growing genres of music
(such as Rap) at its discretion. In so doing, Billboard al-
ters the field information regime and thus alters the shapecontained in college-ranking charts is taken seriously
of the commercial music field. since their consequence on institutional reputation are
Conclusions
We started by observing that researchers have given scant
attention to the vital issue of organizational field forma-
tion. In this paper we have combined insights from the-
ories of institutions, organizational information process-
ing, and sensemaking to sketch the role of market
information in field formation. Based largely on data
gathered from our study of the commercial music field,
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we found that market information shapes fields in three
very significant ways. First, market information regimes
provide a common focus of attention that serves to inter-
lock disparate actors into a common field. We showed
how Billboard's agency in creating the "Hot 100" chart
in 1958 focused the attention of artists, record label ex-
ecutives, retailers, jukebox operators, radio programmers,
and the like on a single summary measure of performance
in the field. In the field of commercial music, the creation
and weekly dissemination of information showing the
relative success of the most popular phonograph records
made it possible for field participants to structure their
beliefs about the success or failure of particular record-
ings, artists, and sub-genres by reading the performance
charts. Record label executives, artists, retailers, radio
programmers, and the like began using chart information
initially as an indicator of current market activity, and in
the course of time, also began to make sense of past track
records and future potential of individuals and organiza-
tions. As we have shown, data and interpretations fostered
by regimes such as the Billboard and SoundScan charts
provide regular cues and connections about market activ-
ity that is vital to sensemaking in competitive fields.
Market information regimes facilitate continuity in on-
going fields by providing a focus of attention around
which participants can cohere. Take the case of higher
education. Colleges are in the business of providing pres-
tige education, the value of which cannot be directly as-
sessed by its consumers (Stinchcombe 1990). A number
of popular guidebooks provide a wide array of ratings on
universities and colleges to help prospective students and
their sponsors decide upon the relative merits of the vari-
ous programs that are offered. Like the Billboard chart,
ranking information supplied by newsmagazines such as
Business Week and U.S. News and World Report serve a
crucial role in field structuration by providing cues for
similarity and rivalry among a set of producer organiza-
tions (Porac and Thomas 1990). Although not as explic-
itly performance-related as music charts, the information
taken to be real (Elsbach and Kramer 1996, Glieck 1995,
Stecklow 1995). Ranking charts can interlock attention
and generate intense sensemaking about the relative
standing of an organization within a field.
Second, we established that the constitution of fields is
information regime-dependent, because reframing the
scope, methodology, or tone of a market information re-
gime creates a cognate change in participants' under-
standing of the field itself. Initially, SoundScan seemed a
mere change in methodology for compiling the album
N. ANAND AND RICHARD A. PETERSON Markets in the Commercial Music Industry
chart. However, embedded in its methodology is a fun-
damentally different view of the scope of the field, one
that involved field-wide focus on absolute counts of al-
bum sales rather than just the relative ranking of a pre-
selected list of albums.6 Following the switch to
SoundScan, Billboard was forced to present a broader
scope of field-level information.
Third, we showed that the inclusion of new categories
of market information can itself spur the formation of new
niches within a field. Even before its involvement in the
creation of the Catalogue and Heatseeker charts, Bill-
board played a key role in catalysing focused niches
within the commercial music field by developing new
charts and linking related news and information. In the
early 1970s, for example, the dance music called "disco"
was being performed in small urban clubs by inventive
discotheque disc jockeys, but the form was invisible to
all those outside the specific club scene. Billboard gave
it coverage, created a chart for the current hot dance
tracks, and sponsored several national conventions that
brought together club owners, disco DJs, industry exec-
utives, and academic scholars.
A key implication of this insight is that variations in
categories of information within a regime can be used to
create differentiation within a mature organizational
field.7 The inclusion of new categories of market infor-
mation within an existing market information regime can
help create new market niches. Industry structure is con-
stituted by coalitions of producers creating small, defen-
sible niches for themselves within the broad spectrum of
a product market (White 1981). Our study suggests that
the creation of such niches can be greatly facilitated by
the presence of cognate market information. A related
illustration can be found in a study of the creation of the
minivan market niche in the U. S. auto industry. Porac et
al. (forthcoming) found that until 1984, the scope of mar-
ket information supplied by the trade press was restricted
to cars and trucks with almost no systematic attention
given to hybrid forms. After 1984, trade publications such
as Car and Driver, Consumer Reports, Ward's Auto
World, and Automotive News played a key role in creating
a coherent market niche by featuring news and informa-
tion about consumer demand, producer forecasts, product
reviews, and sales trends of car-like minivans. This ex-
ample demonstrates that market information regimes play
a central role in creating the differentiation of niches
within an industry.
As can be seen from the illustrations provided above,
the field-defining force of information is not restricted to chart compilation by Mayfield (1991a, 1991b, 1992a, 1992b, 1994), as
the commercial music field. We conclude by reiterating
that organizational theorists need to pay more attention
to the problem of field formation. In this paper, we have
282 ORGANIZATION SCIENCE/Vol. 11, No. 3, May-June 2000
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made a start by offering the language and logic of market
information regime as a convenient way of understanding
both the stasis and the rapid change in the structuration
of competitive organizational fields.
Acknowledgments
The authors gratefully acknowledge the very useful comments made
on earlier versions by Richard L. Daft, Paul DiMaggio, John Meyer,
Rekha Nagaraj, Claire Peterson, W. Richard Scott, William Sewell,
Jamal Shamsie, and two anonymous reviewers. They would like to
thank Ronnie Pugh for his help in locating material archived at the
Country Music Foundation in Nashville. They also appreciate the fi-
nancial support of an Owen Graduate fellowship and a National En-
dowment for the Arts contract. An earlier version of this paper was
presented at the NYU-Stern conference Research Perspectives on the
Management of Cultural Industries (May 1997).
Endnotes
'From time to time, Billboard magazine published notes on its chart
compilation methodology. Chart formation took place roughly as fol-
lows: At a designated time each week stores would .respond with the
following information: the 30 top selling albums during the prior week
were arranged in rank order, followed by a list of up to 50 albums with
"strong" sales, and then another 50 albums whose sales were deemed
"good." Billboard research staff assigned points to each record, and
these in turn were multiplied by a weight based on the sales volume
of each reporting store. Finally, these numbers were summed across
all reporting stores to obtain the week's raw score for each album. The
veracity of the pre-1991 process described in this paper was checked
in an interview conducted by the second author with Bill Williams
(1982), Nashville editor, and with Geoff Mayfield, director of the chart
department at Billboard.
2The sequence of events described was pieced together from trade press
reports cited elsewhere in this paper and corroborated by Mike Shallet
in an interview with the first author. To ensure that we captured the
details of critical incidents, the first author read and summarized all
trade and general magazine articles published on SoundScan listed in
the Music Index for the years 1988-1993.
3The first author spent over 150 hours coding data from charts pub-
lished in Billboard magazine before and after the SoundScan change
in order to generate the summary information presented in Table 1 and
Figure 1. Classifications made by the first author were reviewed reg-
ularly by the second author when coding was in progress.
4Given the many loosely coupled units in the record industry and their
changing relationships to each other, the specification of an "indepen-
dent record company" is imprecise; the important thing is that we used
the same criteria to compare independent label albums before and after
the advent of SoundScan. We consulted Fuch's (1994) sourcebook on
the recording industry for classifying major versus independent album
releases.
5Wherever a source has not been cited explicitly, sensemaking attrib-
uted to executives in the field is based on interviews with Geoff May-
field (see note 1), Mike Shallet (see note 2), published commentary on
well as informal interviews by the two authors with record industry
executives including Tim DuBois (Arista-Nashville), Tony Brown
(MCA-Nashville), and Brad Holliday (Curb).
N. ANAND AND RICHARD A. PETERSON Markets in the Conmmercial Music Industry
6As of this writing, the weekly unit sales figures are regularly reported
in Billboard articles and commentaries on chart performance, but they
have not been incorporated into the charts themselves.
7We thank an anonymous reviewer for this insight.
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Accepted by Jamal Shamsie; received February 16, 1998. This paper has been with the authors for three revisions.

284 ORGANIZATION SCIENCE/VOl. 11, No. 3, May-June 2000

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