Previous research suggests that an emerging industry may erode the life prospects of a related incumbent market, when the newcomer industry is based on superior technology, has a more appealing ideology, or generates collective action. It is not well understood, however, why an incumbent industry may decline when those factors are weak or absent. We develop two new mechanisms of cultural embeddedness and social salience to explain such cases. When organizations in the nascent market embed their offerings in cultural artifacts of a related incumbent market and/or achieve social salience by reflecting public discourse, they invoke a sense of familiarity in audiences and in this way alleviate the uncertainty surrounding the novelty on which the emerging market is based. Decreased uncertainty draws audience attention to the new industry, often away from the incumbent market. This effect should be especially strong in the early stages of a new industry development and attenuate as the industry matures. We find support to our theorizing in the archival study of the historical coevolution of the emerging U.S. TV programming industry and the related incumbent market of all movie theaters in Illinois in 1944-1962.
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