Goodreaders and Amazonians: monetizing online readership

April 1, 2013 by · 5 Comments 

When deep space exploration ramps up, it’ll be the corporations that name everything. The IBM Stellar Sphere. The Microsoft Galaxy. Planet Starbucks.

Fight Club

There’s a rule of thumb you can count on in each succeeding version of the web 2.0 movement: the more radical an online social experiment is claimed to be, the more conservative, nostalgic, and familiar the result will actually be.

– Jaron Lanier, You Are Not a Gadget

GoodreadsIn the distant reaches of historical memory, sometime around the mid-1990s, proponents of the developing Internet championed the new technology as a utopian tool capable of realizing the McLuhanesque vision of a global village and creating an egalitarian space (or non-space) in which individuals could interact and exchange ideas unfettered by political or corporate forces. In the areas of journalism and art, we were told, independent voices would be allowed to operate freely, without the shackles of government, big business, or advertising that had long dictated the terms of reference. It was to be democratic, anti-authoritarian, and open.

It didn’t turn out that way, and in retrospect it’s almost inconceivable that we could have been so naive. In the second decade of the 21st century, repressive political regimes have discovered that the online environment is infinitely superior to Jeremy Bentham’s Panopticon for keeping tabs on dissidents, and the free marketplace of ideas has turned into another, much more recognizably capitalistic marketplace. The Internet has become a nexus for buying and selling things, not least its users and their personal data.

When news broke last Thursday that Amazon had entered into an agreement to purchase the social media site Goodreads, many people reacted with surprise, although it’s difficult to see why. Amazon has made no secret of its ambition to control the trade in books online and, by extension, offline as well. The company’s practice of deep discounting has savaged publishers’ profit margins and enfeebled independent booksellers unable to compete on price. It has implemented questionable marketing schemes such as the 2011 mobile app that offered users a $5 rebate for scanning an item’s barcode in a bricks-and-mortar store then purchasing the item through Amazon. And it hired publishing veteran Larry Kirshbaum to run a publishing arm that, according to one anonymous insider quoted by tech columnist Sarah Lacy, overpays on advances as a way of driving conventional publishers out of business.

So the purchase of Goodreads makes perfect sense from a business perspective. It simultaneously removes a potential competitor from the field and allows Amazon, which has come under criticism for undisclosed conflict-of-interest in its user reviews, access to a peer-to-peer rating system that is more transparent and trusted. Financial details of the transaction have not been disclosed, but Forbes online suggests that the purchase price is “likely to have been in the low eight digits.”

On its blog, The Authors Guild in the U.S. was quick to condemn what it referred to as “a truly devastating act of vertical integration.” Guild president Scott Turow is quoted as saying, “Amazon’s acquisition of Goodreads is a textbook example of how modern Internet monopolies can be built.” On social media, Twitter users lined up quickly in declaring they were ready to delete their Goodreads accounts.

AmazonMeanwhile, in a breathlessly effusive blog post on the Goodreads site, co-founder Otis Chandler assures users that “Amazon supports us continuing to grow our vision as an independent entity, under the Goodreads brand and with our unique culture.” That may be, but Chandler also says that the deal will see Goodreads made available on “the most popular e-reader in the world, Kindle.” As Moby Lives points out, this synergy allows Goodreads users “to sync their accounts with Kindles, something users undoubtedly have been looking to do for some time now.” But the Kindle is a famously proprietary device, and Amazon is not subtle in its monopolistic desire to rid itself of competition; it seems only a matter of time before Goodreads’ attitude of vendor agnosticism disappears.

Moreover, whether or not Goodreads’ user reviews and rating systems or buy-button options remain untouched, the deal gives Amazon something far more valuable than the low eight figures they are rumoured to have paid: access to the raw data of the members on the social networking site. This includes users’ virtual bookshelves, the lists of books they have read and want to read, what they liked and disliked. From a marketing perspective, this is a treasure trove, but it also means that users who post reviews no longer have the luxury of doing so without a corporate Big Brother looking over their shoulder and employing the information to sell them other products. As Rob Spillman points out in an article on Salon: “even if Goodreads succeeds in keeping a semblance of independence, the era of naively posting one’s preferences is over. We collectively were under the delusion that Goodreads was different than the data-mining machine that is Facebook, when in fact we’re all just data waiting to be harvested.”

This was always the case, of course. In The Filter Bubble, Eli Pariser quotes Andrew Lewis as saying, “If you’re not paying for something, you’re not the customer; you’re the product being sold.” This was true of Goodreads long before Amazon appeared with its deep pockets and the promise “to build many new ways to delight readers and authors alike.” But the kind of data-mining that Amazon can now indulge in is not morally neutral, and has potential consequences not only for what we read, but for the way books get written.

It is no secret that the owners of e-book technology monitor the behaviour of readers: how much they read, how fast, what portions of a book they skip or reread, what they annotate, where they stop reading. All of this information can be used to artificially engineer books that the tech experts at e-reading companies think their users might prefer. As Stuart Kelly writes in the Guardian: “While the book’s relationship to the reader is one of privacy, with the e-book we are all part of an unacknowledged focus group.” As a result of Amazon’s most recent acquisition, its online focus group has grown exponentially: Goodreads currently boasts some 16 million members whose preferences, tastes, likes, and dislikes now become fodder for the company’s impersonal algorithms. Welcome to the machine.