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Since the last decade, several technologies have been abruptly influencing our lives. Among the notable major changes in the human society is the way humans interact with each other, which now involves the social media heavily where this is previously unknown to the masses. This type of technology is called Disruptive Innovation, a type of technology which has the potential to alter how human lives, market trends as well as other aspects including transportation and communications. Studies show that in the next few years, there are plenty of technology with the disruptive features. The new technologies, part of the domino effect of previous emerging technologies, include autonomous vehicle, the blockchain as well as Internet-of-Things. Despite the rapid advent, little discussion has been done to discuss and summarizes the emerging technologies in a single work in Malaysia. This brief survey is written as an effort to initiate the discussion, particularly in Malaysia about the disruptive innovation. It gives an introductory idea to the general audience, as well as academician and practitioners about the examples of the innovation, as well as brief discussion about the future studies which need to be commended in relation to the current development. This work is hoped to speed up the implementation of the emerging technologies in Malaysia as well helping and guiding policymakers, practitioners as well as academicians in understanding the phenomenon.
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EMERGING TECHNOLOGIES WITH DISRUPTIVE EFFECTS: A REVIEW
Airini Ab Rahman1, Umar Zakir Abdul Hamid2*, Thoo Ai Chin1*
1Faculty of Management, Universiti Teknologi Malaysia, Johor Bahru, Malaysia
2Moovita Pte Ltd, 8 Burn Road Trivex Building, 13-01, 369977 Singapore
*Corresponding author: acthoo@utm.my; umar@moovita.com
ABSTRACT
Since the last decade, several technologies have been abruptly influencing our lives. Among
the notable major changes in the human society is the way humans interact with each other,
which now involves the social media heavily where this is previously unknown to the masses.
This type of technology is called Disruptive Innovation, a type of technology which has the
potential to alter how human lives, market trends as well as other aspects including
transportation and communications. Studies show that in the next few years, there are plenty
of technology with the disruptive features. The new technologies, part of the domino effect of
previous emerging technologies, include autonomous vehicle, the blockchain as well as
Internet-of-Things. Despite the rapid advent, little discussion has been done to discuss and
summarizes the emerging technologies in a single work in Malaysia. This brief survey is
written as an effort to initiate the discussion, particularly in Malaysia about the disruptive
innovation. It gives an introductory idea to the general audience, as well as academician and
practitioners about the examples of the innovation, as well as brief discussion about the future
studies which need to be commended in relation to the current development. This work is hoped
to speed up the implementation of the emerging technologies in Malaysia as well helping and
guiding policymakers, practitioners as well as academicians in understanding the phenomenon.
Keywords: Disruptive innovation, Emerging technologies, Fourth industrial revolution.
1.0 INTRODUCTION
Human’s tendency to innovate is fueled and encouraged by their creative ability. According to
Amabile et al., it is impossible to witness an innovation without the involvement of the human
creativity [1]. The ability to identify the new problems and solutions, analyzing the
information, yielding latest theories and validating the ideas is part of the human creativity,
which plays a deep role in the innovation throughout the history [2]. According to Christensen
[3], innovation is classified into two main categories, sustaining and disruptive. Figure 1
illustrates their respective brief definitions.
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Figure 1. Two types of innovation [3].
Sustaining innovation refers to the type of innovation, which does not relatively impact the
current available market and society. It may come in as an improvement type to the current
product. However, it does not necessarily create a new product [4, 5]. Disruptive innovation on
the other hands is the innovation, which stimulates the creation of new market and business
niche [6, 7]. It yields a new concept of product values which overrides the current market.
According to Zeleny [8], the entity which is most affected by the disruptive innovation is the
support network of current existing high technology (Technology Support Net). However, due
to the human creativity and dynamic nature of human creativity and innovation, technology
always evolves [9]. This dynamic nature prompted the birth of several industrial revolutions
along the history. According to Teich et al [10], the term ‘industrial revolution’ has been coined
as early as in 1799 by Louis-Guillaurne Otto, which mentioned that France had joined the race
to industrialize. After several decades and types of industrial revolutions, it is now entering the
fourth phase, which is called Fourth Industrial Revolution (FIR) [11]. FIR stimulates the
development of several types of new technology, which include the focus on artificial
intelligence and automation of the system. With the advent of many new technologies, the
discussion on the disruptive innovation has been getting more focused now. Due to the new
technologies create a new market and will change the society, a study on it should be done for
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policymakers and researchers to understand the issue. Example of the disruptive innovation
can be seen on Facebook. Prior to its existence, the idea of connecting with each other and
hanging out on the internet alone is quite strange. Though the internet has existed prior to that,
only with such disruptive innovation that the people in the rural areas are also affected [12].
Thus, for the FIR, the emerging technologies are expected to bring the same effects as
Facebook to the society and the world. In Malaysia, the talks of Fourth Industrial Revolution
have gained some attention recently with the report of the government to focus on tax
incentives for the FIR [13]. However, despite the progress, not much has been conveyed to the
ground level and among the practitioners in Malaysia. Thus, the authors aim to write and share
about the current emerging technologies and their disruptive potential towards changing the
humankind.
This work is organized as follows. The next section briefly describes the background of
disruptive innovation, which includes its definition and previous examples of technology with
disruptive abilities. In section 3.0, the authors review ten emerging technologies with the
disruptive abilities. The discussions encompass of their backgrounds, current implementations,
their potential disruptive ability as well as future considerations regarding the development. In
the final section, the conclusions of the work are denoted, where considerations of future works
are also included. This survey will be beneficial for identifying future potential researches for
policymakers as well as practitioners in Malaysia as well as other countries.
2.0 DISRUPTIVE TECHNOLOGY
This section discusses the background of the disruptive innovation as well as examples of
previous disruptive innovation with disruptive ability.
2.1 History
In a study by Christensen, a Harvard professor who came up with the idea of disruptive
technology, and later renamed it to disruptive innovation it is noted that the main factor which
caused disruptive innovation to be disruptive is due to its impact on the business model and
current system (and society) [3, 14]. Christensen later denotes the theory regarding disruptive
innovation’s emergence, which possesses similar pattern in many scenarios [3, 14]. To allow
the better understanding of the disruptive innovation idea, the authors illustrates the idea in
Figure 2.
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Figure 2. Disruptive innovation concept [3, 14].
As can be seen in the Figure 2, the emergence of certain disruptive technology begins with
its rise, whereas can be expected, due to its non-conformist feature, could not initially attract
the consumer perception due to low acceptance yet [15]. In the second phase, the distinctive
features of the product subsequently gradually attracted a significant number of the new
consumers. Following the second phase, Christensen noted two different scenarios and actions
done by two sides. The first one is the big industry player, who feel resilient to change and
improve their product according to the trend, thinking the consumers are not attracted to the
new ‘emerged’ feature. On the other side, there is a new market player who manipulates the
widespread publicity of disruptive technology and assimilated it into their products.
Christensen finally mentioned that usually, the disruptive innovation explodes and the new
technology naturally replaces its predecessor and the predecessor lost their influences. Many
examples can be shown in relation to this short anecdote. For example, the collapse of the major
players due to their reluctance to adapt to the new changes as well as the stories of how start-
up companies come to change the world [16, 17].
2.2 Examples of Previous Disruptive Technology
Before proceeding with the review of current emerging technology which is expected to disrupt
the current industry, the authors review some of the previous disruptive technology in the last
few decades (Table 1).
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Table 1. Previous examples of technology with disruptive impact.
Technology
Disruptive Impact
References
Digital Media Store
Before 2003, most of the consumers buy their favorite
music in the form of the Compact Disc (CD). With the
emergence of Digital Media Store such as iTunes, led to
the decline in the sales of physical press album such as
CD and Long Play Vinyl (LP). In addition, continuous
declination led to the demise of cassette tapes.
[18-20]
Streaming Video
Portal
With the emergence of streaming video portal such as
Netflix, people started to watch video online. This
subsequently led to the declination in TV Cable and
DVD sales. The Netflix series such as, Stranger Things
which saw very high view rating, support this.
[21, 22]
Smartphones
Smartphones start to be used extensively since 2013.
Since then, many products were created solely due to the
existence of smartphones such as Instagram, Snapchat,
WhatsApp and so on. These products did not exist
several years backward.
[23, 24]
Internet
The existence of Internet prompted the birth of a lot of
other technologies such as e-mail, social media,
smartphones as well as file sharing among many others.
[25, 26]
These examples above show the existing disruptive innovation and their disruptive effects
toward the existing technology. For the fourth industrial revolution however, there are several
new emerging technologies which are expected to possess the disruptive feature. This will be
discussed in the next section.
3.0 CURRENT AND FUTURE DISRUPTIVE TECHNOLOGY
Fourth Industrial Revolution, which revolves around the development of many new emerging
technologies with disruptive innovation feature, is said to disrupt a lot of industry sectors
globally [11]. In this section, ten examples of the emerging technologies with the disruptive
feature are listed. In addition to that, for each technology, discussions will revolve on their
background and benefits, their disruptive potential as well as the future works which are
required to be studied for their implementation. Figure 3 below illustrates the emerging
technologies with the disruptive ability which will be discussed in the next subsections.
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Figure 3. Emerging technologies with disruptive ability.
3.1 Car and Ride Sharing
Car sharing can be defined as a car rental service which allows the consumer to rent cars for
short time and errands [27]. Ridesharing, on the other hand, works like traditional taxi service,
where it allows the consumer to share the rides to a certain destination. However, the
differences are the ridesharing utilizes the idea of carpooling, where the owner of the car
utilizes their empty seats to transport their potential customer [28]. Most of the car and ride-
sharing service utilizes the common technology possessed by the majority of the modern city
inhabitants, such as Global Positioning System (GPS) and smartphones as well as social
networks [29]. Figure 4 depicts the usage of car and ride sharing.
Figure 4: Car and ride sharing heavily relies on the usage of smartphones among the
consumers.
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According to Katzev [30] based on his study of the car sharing in Portland, most of the
users use car sharing due to three factors, which include the need to use a vehicle and the
financial savings which will be inherited by joining the service. The second one is due to the
fact that the membership is more important to the vehicle owners rather than the non-owners.
In addition, most of the participant in the car-sharing program in Portland sold their vehicle
after the program, and 53% of them canceled the car purchase intention. Car sharing has been
extremely popular, particularly in major cities, since the service allows for a service which the
public transport does not cover. The extreme popularity of Uber, a ride-sharing company, has
led to the formulation of the word uberisation, which refers to the peer-to-peer ridesharing
pioneered by the company [31]. In addition, it is noted in a study by d'Orey et al. [32] that the
major factor of consumer acceptance in ride-sharing services is the economic factors. Among
the notable examples of Car and Ride Sharing is Uber, Lyft and Grab [33, 34]. Car and ride
sharing is a rapidly expanding economy segment, and with the advent of self-driving cars, new
discussions revolve around the ownership of the autonomous vehicle. The idea is that the
ownership of autonomous vehicles will not be possessed by private consumers, instead, it will
be shared among city citizen [35]. This in return has a strong disruption effect on the current
car ownership idea. Thus, a study should be done on several issues regarding this rapid progress
field, such as security, policymaking and insurance.
3.2 Internet-of-Things
In 1999, Kevin Ashton coined the term “Internet of Things” (IoT) [36]. Its idea is to allow
everyone to be connected to everything via the internet usage. Theoretically, this means soon,
all the vehicles, vending machines, ticketing service and even the places of living will be
connected to the Internet, which in return allow the automation of more industry. This in return
will allow for more artificial intelligence-based device creation. Among the examples are [37].
Companies like Intel are racing towards the investment in IoT [38]. The disruptive potential by
the IoT is that it will allow for each of our devices to be connected to the internet to the network
[39]. Among the concerns involved in the IoT development are data security, network security
as well as the rapid demands of the usage of internet. Thus, efforts should be put to consider
all of these issues prior to the advancement of IoT in certain countries.
3.3 Driverless Vehicle
One of the major features of FIR is Autonomous Vehicle (AV). It allows the vehicle to navigate
itself without the interference of human driver. Major companies are racing in developing
autonomous vehicles, and it is expected to be navigating on the road by the general audience
by the year 2025 [40]. Globally, major research universities are working towards the
development of a fully autonomous vehicle such as University of Berkeley, California, TU
Graz as well as Smart Mobility Research Center in Tokyo [41-43]. Despite having slower
progress in the field, a handful of research has been done in Malaysia for AV development [44-
46]. However, most of the cited studies focus on the engineering and technical aspects of the
AV and not on the policymaking field. Thus, study should also be focused on the economics,
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marketing as well as driver acceptance area. This is due to the ability to reduce fatalities by the
driverless vehicle will benefits country like Malaysia, where the number of road accidents is
still high. In addition, the combination of AV and car sharing will lead to the reduced car
numbers and subsequently help in expediting the development of the smart city. Among
notable examples can be read in the work of Zanella et al. [47]. In addition, the AV will not
only focus on highway vehicle but also other usages such as snow cleaning technologies, as
has been done by Daimler [48]. This show the vast disruptive potential of the new technology.
Figure 5: Ability of driverless vehicle to navigate itself encompasses of these modules,
among many others [40, 45].
3.4 Autonomous Robots
Asimo is one of the first known projects of autonomous robot to the public [76]. Prior to that,
the knowledge of autonomous robot has been shown in science fiction films. In addition, there
are many new startups emerged in the said field due to the ability to create autonomous robot
easily with the induction of technology like Arduino [49]. Autonomous robot and IoT will
allow the creation of robots which can work in public services, thus subsequently expedite the
process [50]. However, concerns involve whether the job opportunity will be reduced or not
with the induction of robots into the industry. Study should be done according to this to study
the consumers acceptance [51].
3.5 Virtual Reality
The discussions on Virtual Reality (VR) has started since the 1960s. One of its initial
development is done by Philco Corporation for military purpose to allow the military personnel
to have a simulated experience in high risks training places such as underwater or up in the air
[52]. Virtual reality has since been a stamp depiction of the future prediction, especially in the
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post-apocalypse films [53, 54]. However, in recent years, it has faces resurgence with the
advent of other computing devices technology. According to the Merriam-Webster Dictionary,
Virtual Reality is defined as an artificial environment which is experienced through sensory
stimuli (such as sights and sounds) provided by a computer and in which one's actions partially
determine what happens in the environment[55]. In other words, VR allows us to be in a
virtual world perceived by our eyes. Among current VR application is in the video games where
companies such as Oculus Rift has created a platform to play the game with their VR headset
[56]. The unique feature of VR possesses several benefits where in the future it will allow the
children to go to the school without really attending the school [57]. In addition, the higher
education can be provided to people from far away location with approximately similar
experience of attending the college. Thus, this will enlarge the scope of education. Besides that,
it will allow people with health issues to be working from home or school [58]. Thus, this in
return has the disruptive feature to disrupt current technology support network of several fields
in the education and medical industry, for example. However, as human nature needs to interact
with each other, the psychology and social effect of VR should be studied to prevent the cases
of critical social reclusion effect.
3.6 Bitcoin
In 2008, Satoshi Nakamoto published a paper entitled “Bitcoin A Peer-to-Peer Electronic Cash
System” which initiated the Bitcoin phenomenon globally [59]. Later, it was revealed to the
public where the name is a pseudonym to the creator of Bitcoin, which might consist of a single
person or a group [60]. Bitcoin is a cryptocurrency, which allows for digital payment
transactions with no central authority or issuer [61]. Its cryptocurrency nature means it is
utilizing the cryptography, which in return allow for a secured transaction, without the
existence of third parties. Since its induction, many studies have been done about it. In an
article by Forbes [62], it is noted that Bitcoin’s total market cap has reached $100 billion. The
big potential of Bitcoin is showed by the Google Trends findings of the searches relating to its
name. With the buzz revolving around 4IR, the Google Trends results on 11 November 2017
about the search regarding Bitcoin has shown that the searches are increased by more than
300% since 11 October 2015 (Figure 6). This shows the rising interest in Bitcoin [63]. Marc
Andreessen in his article mentioned that Bitcoin has several benefits which include enabling
micropayments and the potential of fighting the spam [64]. The disruptive innovation feature
of Bitcoin led to the birth of another disruptive innovation called Blockchain, which is
discussed in the next subsection. In addition, a peer-reviewed journal called Ledger is
introduced in the year which mainly discussed the cryptocurrency and Bitcoin [65]. However,
several concerns need to be discussed for Bitcoin including the privacy and security risks
during the usage of the application.
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Figure 6: Snapshot of google trends searches for the term ‘Bitcoin’, where it shows rising
interests since 2015 [63].
3.7 Blockchain
The disruptive feature of Bitcoin creates another disruptive technology, which is called
Blockchain, a type of distributed ledger technology. Blockchain (initially written as Block
Chain) is the one of the major features which brings Bitcoin to success. According to Lou
Carlozo [66], blockchain is a virtual log of financial records which is completely public and
frequently updated by public users. This publicly done transaction led it to be considered by
experts to be hard to corrupt. Lou then reiterate the definition by defining Blockchain as a
record of continuous logs of business done in blocks. One of the main benefits of Blockchain
is that it allows a financial transaction to be done without having to have an intermediary third
person party to be in between the transaction. This is different compared to the current online
payment where it demands the intervention of the banking company or other payment methods.
At the 2016 World Economic Forum, it is disclosed that more than 24 countries are currently
involved in the study of blockchain and more than 25000 patents are filed since 2013 for the
blockchain [67]. With over 1.4 billion values of investments in the past 3 years for the
technology, it is evident of the disruptive effect of blockchain [67]. However, recently, the
discussion has been done for Blockchain to be used in other fields. With the advent of Artificial
Intelligence and IoT, it is believed that the potential of blockchain will outreach other fields
besides its current major usage for Bitcoins. More of the discussions can be found elsewhere
[67]. The challenge however is to ensure that for future work, to ensure all the distributed
ledger are done correctly, a lot of collaboration between the financial service provider,
government as well as the developer are required for safety purposes.
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3.8 3D Printing
3D Printing is a concept where it allows the 3D printer to print everyday things. It is a process
of utilizing the three-dimensional computer-aided design data sets for producing 3D real
physical model [68]. According to Stephen Nigro of HP [69], the 3D market will be valued at
18$ billion by 2021, which saw the rise of 30% from the current value. He further enlisted that
major giants in the manufacturing field like GE, SAP and HP are actively investing in the 3d
Printing. This is to allow the technology to be mass produced for general usages. Among future
potential of 3d printing usage is in the medical field [70]. Among the future potential of 3D
printing is the ability to create DIY small houses in urban areas. This might reduce the homeless
issues in certain cities. 3D Printing also has the potential to create a low-budget manufacturing
industry.
3.9 Cloud Computing
Cloud computing is the act of storing and keeping the process over the internet. According to
National Institute of Standards and Technology (NIST), it is defined as “a model which permit
ubiquitous, convenient, on-demand network access to a shared pool of configurable computing
resources that can be rapidly provisioned and released with minimal management effort or
service provider interaction” [71]. Since its innovation, it has disrupted many types of field
and is constantly changing the landscape of computing service. With the introduction of IoT,
Spotify, a music streaming company, has changed the way music is consumed. However, the
usage of Spotify demands the use of cloud computing to store its data of the users [72]. Cloud
allows the usage of the social service for global users. This will allow for more data for other
purposes such as education, storage and business purpose. However, concerns remain. For
example, security and privacy of the information stored by Cloud Computing. Thus, study
should be done to address the issue.
3.10 Vertical Take-Off and Landing
The final emerging technologies which will be going to be discussed in this work, with the
disruptive ability is the autonomous flying vertical take-off and landing (VTOL), which include
the Volocopter, a project by a startup company in Germany [73]. It is a continuity of drone
concept and allows the passenger to ride in it and navigate autonomously. With the arrival of
AV, Volocopter is a development with steps ahead in realizing the idea of smart city
implementation. Among the potential benefit of its arrival is no roads will be needed soon with
the heavy usage of Volocopter, thus allowing for better traffic and potentially reducing the
number of the road vehicle. With the news of Daimler investing 25 Million in the startup
Volocopter, the rise of VTOL shown reliable promises [74]. Dubai is planning to have the
flying VTOL in the near future, and it is expected to be followed by other countries [75]. Since
autonomous VTOL is truly a new design, policymakers need to think about the safety as well
as other new policies regarding the creation.
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4.0 FUTURE STUDY SUGGESTIONS REGARDING DISRUPTIVE INNOVATION
In previous sections, ten emerging technologies with disruptive ability are briefly viewed and
discussed. The high interest of market in investing in these products show a potential of
disruptions in near future. Thus, several considerations are required to be given. Due to the 4IR
allows for a borderless world, collaborations between academia, industry practitioners and
policymakers will expedite the technologies to be benefitted by the society. In addition, among
the important study which should be done is the consumer acceptance. This is due to the
consumer acceptance play a deep role in the progress of the technology. In addition, the study
which should be involved is regarding the new jobs which will be created due to the birth of
these technologies. As predicted, 65 percent of children today will work in a still not-existed
job field soon [76]. Thus, issue of social implications, security should be studied. In addition,
study regarding the new supply chain and trade as well as taxation due to the disruptive
innovations should be considered.
5.0 CONCLUSIONS
This work is a review on the current emerging technologies which possess the disruptive
ability, which has the potential to change the current technology support network and influence
the way of human living. Ten types of emerging technologies were reviewed which include
Bitcoin, Autonomous Vehicle as well as Cloud Computing. Several suggestions for future
study in relation to the birth of these new technologies are also denoted. Based on the survey,
it can be concluded that the arrival of the Fourth Industrial Revolution has directly led to the
birth of many emerging technologies which has the disruptive effects. These new innovations
will not only create a new technology, but also will disrupt the current Technology Support
Network. Thus, this study is important to give the overview of the trend and to stimulate the
discussion of these new technologies for Malaysian audience, in particular.
ACKNOWLEDGEMENT
The authors would like to express their appreciation for the Vehicle System Engineering
iKohza (VSE) research group in Universiti Teknologi Malaysia, Kuala Lumpur as well as
Moovita Pte Ltd in Singapore for their interesting discussions on the emerging technologies.
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The Fourth Industrial Revolution is changing everything - from the way we relate to each other, to the work we do, the way our economies work, and what it means to be human. We cannot let the brave new world that technology is currently creating simply emerge. All of us need to help shape the future we want to live in. But what do we need to know and do to achieve this? In Shaping the Fourth Industrial Revolution, Klaus Schwab and Nicholas Davis explore how people from all backgrounds and sectors can influence the way that technology transforms our world. Drawing on contributions by more than 200 of the world's leading technology, economic and sociological experts to present a practical guide for citizens, business leaders, social influencers and policy-makers this book outlines the most important dynamics of the technology revolution, highlights important stakeholders that are often overlooked in our discussion of the latest scientific breakthroughs, and explores 12 different technology areas central to the future of humanity. Emerging technologies are not predetermined forces out of our control, nor are they simple tools with known impacts and consequences. The exciting capabilities provided by artificial intelligence, distributed ledger systems and cryptocurrencies, advanced materials and biotechnologies are already transforming society. The actions we take today - and those we don't - will quickly become embedded in ever-more powerful technologies that surround us and will, very soon, become an integral part of us. By connecting the dots across a range of often-misunderstood technologies, and by exploring the practical steps that individuals, businesses and governments can take, Shaping the Fourth Industrial Revolution helps equip readers to shape a truly desirable future at a time of great uncertainty and change.
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On-demand streaming services that rely on subscription fees or advertising as a revenue source (e.g., Spotify) are a topic of ongoing controversial debate in the music industry because their addition to the distribution mix entails the risk of cannibalization of other distribution channels (e.g., purchases of downloads or CDs) and might reduce overall revenues. To date, no research has assessed the effect of streaming services on revenue, and whether cannibalization indeed takes place. Our research fills this void and assesses the impact of free and paid streaming services on music expenditures and on total music industry revenue. To this end, we constructed a research design in which we observed a panel of more than 2500 music consumers repeatedly over more than one year. This approach allows us to eliminate individual-specific unobserved effects that may otherwise confound the identification of a cannibalization effect. Our results show that the adoption of a free streaming service as well as the adoption of a paid streaming service cannibalizes consumers' music expenditures. The net effect of paid streaming services on revenue, however, is clearly net positive. In contrast, the net effect of free streaming services on revenue is only positive for consumers who were relatively inactive before the adoption. On the industry level, our findings suggest that the negative effect of free streaming on industry revenue is offset by the positive effect of paid streaming in the context that we analyze. Hence, in the market that we study and under the assumptions that we make, we estimate that the overall effect of streaming on industry revenue is positive.