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Last Updated: Friday, 24 December, 2004, 09:14 GMT
Vouchers to tap into the 'iPod generation'
By Jo Twist
BBC News science and technology reporter

Christmas, besides being an important religious festival, is also the season of good will and gift-giving.

Japanese Santas with gifts
What is really in a gift?
In the days before the net, young things strapped for cash looked forward to receiving the obligatory record vouchers from various absent aunties.

Now, with legal digital domestic download services jostling for supremacy in a market dominated by peer-to-peer file-sharers, they too are turning to gift certificates and vouchers to entice the "iPod generation" into their online shops.

A social anthropological understanding of gift-giving reveals much about what the act of giving actually means.

It can be a gesture which does not require something in return. However, in many cases, there is a type of reciprocity

So-called digital anthropologists who have been using the theory of gift-giving to understand file-sharers and open-source software communities see why gift-giving is crucial for certain groups.

Some give to gain respect or to be a part of a group, to strengthen emotional bonds or to build community loyalty.

Gift guilt

Gift certificates and vouchers themselves are well-known marketing tricks used to entice and keep customers tied to a brand.

Markus Giesler, digital anthropologist (Image: Marc Pieper)
Gift giving generates a sense of guilt. I feel obliged to go and see and maybe I should reciprocate with a purchase
Markus Giesler, professor of marketing
They are part of the strategy that online music services, like Apple iTunes and Napster, are keen to exploit particularly when they lack physical visibility on the High Street.

"Gift giving generates a sense of guilt. I feel obliged to go and see and maybe I should reciprocate with a purchase," Markus Giesler, professor of marketing at the Schulich School of Business, explains.

He has researched and written extensively on gift-giving in file-sharing networks, the open-source community, as well as legal music download contexts.

"Providers do this in the hope that the guilt generated means people will reciprocate with a purchase," Dr Giesler told the BBC News website.

Indeed, gift vouchers could be considered as a way in which legal services try to entice illegal file-sharers into joining up.

A recent report on file-sharing warned that 2004 was a critical year for the legal digital music services; converting illegal file-swappers was crucial for the survival of legal services.

Yet the number of people using peer-to-peer programs to download music had not fallen since the previous year, the Informa Media report said.

Clearly, millions still preferred to download for free.

Back for more?

In order to take advantage of a digital music gift voucher, in most cases, the receiver has to pro-actively get the program which goes with the download service.

This is an investment in non-financial terms: if the effort is made to download the software, you might as well join the community there.

It is a different proposition to walking into a record shop, handing over a voucher, and walking out until next year.

It is the community aspect that legal services are keen to exploit. Community encourages loyalty amongst members and loyalty means they should return.

"It is interesting because it has become pretty fashionable to try to build communities," says Dr Giesler.

Napster pre-pay cards
Napster says their cards open the service to all ages
"But you cannot just engineer a community in the same way as a car. It is a complex social phenomenon.

"For the new Napster and iTunes it is part of the lingo and vernacular, yet what my empirical findings show is that these services are pretty individualistic."

For Napster, building a community is "massively important", says Leanne Sharman, head of Napster UK.

"The biggest part of our pre-launch research was the ability to share and the P2P elements because of our legacy and history, so we have carried that P2P feel into our service.

"You can hold onto a community base today by creating tools for community base," she says.

Along with gift vouchers and pre-pay cards, e-mailing songs, sharing playlists, message boards, and looking at what other people are listening to are all the kinds of community-building tools used.

Virtual sounds

The refashioned record vouchers can come in a virtual form to be e-mailed to friends, or printed out and handed over physically.

iTunes even has "recurring" gift certificates, which act like a piggy bank to be topped up regularly.

Giving music has a long history - it used to be the CD, but now there are more and more things like this
Oliver Shusser, iTunes Europe
For iTunes, encouraging existing members to evangelise via gift-giving strategies is important in drawing in new members; gift-vouchers are a "very cool and trendy gift" for the iPod generation, says Oliver Shusser from the iTunes Europe team.

"We see them as very important as they are essentially a great way for people to extend our community and invite other people into the community.

"Giving music has a long history. It used to be the CD, but now there are more and more things like this.

"For our customers, most of them are really excited about the service. They want to share that excitement and let other people know what their experience is."

But much of this, says Dr Giesler, is "wishful thinking" when it comes to the real issue.

According to his research, the file-sharers that legal services want to convert are not particularly interested in being part of this sort of community.

"When you talk about community, you have to talk about power," says Dr Giesler.

"What is really important is to see the way consumers are becoming more powerful through the technology that connects them.

"The challenge for companies is not to engineer communities but to accept that in the future they have to tolerate community building outside of them."


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