Monday, June 8, 2020

The tyranny of algorithms - V

Book retailers, such as Barnes & Noble, negotiate “co-op,” or cooperative promotional fees, from publishers in exchange for prominent product placement. Amazon has been particularly good at squeezing this money out of publishers. They have to pay lots of money for a book to be prominently featured on the home page. Judgments about which books should be featured on the site are increasingly driven by promotional fees. In its drive for profitability, Amazon does not raise retail prices; it simply squeezes its suppliers harder. Amazon demands ever-larger co-op fees and better shipping terms; publishers know that they would stop being favored by the site’s recommendation algorithms if they don’t comply. (Few customers realize that the results generated by Amazon’s search engine are partly determined by promotional fees.)

This squeezing of co-op fees from publishers is due to one tenet of Amazon’s business philosophy: low prices are always good for customers. In addition to regularly offering bestsellers at more than 50 percent off, Amazon offers a wide range of titles for around a third off the recommended price. Such low prices have forced its competitors to follow suit. Of course, everyone loves low prices, but as with breadth of choice, the matter is more complex than it first appears. To achieve such low prices retailers must seek ever deeper discounts from publishers who have seen their revenues fall, forcing many to make cutbacks and concentrate more on lead titles, the blockbusters that are the most profitable component of their business.

Authors, too, can be added to the list of price-cutting’s victims. It is thought that the money for serious fiction and nonfiction has eroded dramatically in recent years; advances on what are called mid-list titles — books that are expected to sell modestly but whose quality gives them a strong chance of enduring — have declined. These are the kinds of books that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects. 

Lower advances and royalties make for less well-researched books and an author pool increasingly populated by hobbyists rather than those who are good at writing. 'Writing is being outsourced, because the only people who can afford to write books make money elsewhere — academics, rich people, celebrities',  Colin Robinson, a veteran publisher, said. 'The real talent, the people who are writers because they happen to be really good at writing — they aren’t going to be able to afford to do it.' The accumulated effect of Amazon’s pricing policy, its massive volume and its metric-based recommendations system is, in fact, to diminish real choice for the consumer.

The manner of purchasing books is different in brick and mortar stores compared to online stores. When you  enter the Amazon virtual store, a message pops up and tells you: “I know which books you liked in the past. People with similar tastes also tend to love this or that new book.” Devices such as Amazon’s Kindle are able constantly to collect data on their users while they are reading books. Your Kindle can monitor which parts of a book you read quickly, and which slowly; on which page you took a break, and on which sentence you abandoned the book, never to pick it up again, what words are looked up in Kindle's dictionary, which paragraphs are underlined most frequently, etc. Soon, books will read you while you are reading them.

If Kindle was to be upgraded with face recognition software and bio metric sensors, it would know how each sentence influenced your heart rate and blood pressure. It would know what made you laugh, what made you sad, what made you angry. And whereas you quickly forget most of what you read, computer programs need never forget. Such data should eventually enable Amazon to choose books for you with uncanny precision. It will also allow Amazon to know exactly who you are, and how to press your emotional buttons. It would enable Amazon to replace authors with algorithms that churn out books tailored precisely to suits customers' preferences.

Shopping for books on Amazon can be called 'a directed experience'. If you know the kind of book you are looking for, it can be a rewarding experience. Further recommendations by Amazon's algorithms will direct you towards books on similar topics. In brick and mortar stores, you may stumble on great books you had not heard of. The loss of serendipity that comes with not knowing exactly what one is looking for is a cost of shopping on Amazon. As ex-Amazon editor James Marcus says, 'Personalization strikes me as a mixed blessing. While it gives people what they want — or what they think they want — it also engineers spontaneity out of the picture. The happy accident, the freakish discovery, ceases to exist. And that’s a problem.'

Even the existing experience of shopping in physical book stores will be changed by Amazon. It is creating a chain of physical book stores, called Amazon Books,  to take the place of the book stores the company has destroyed. Amazon Books does not accept cash and instead lets Prime members use the Amazon app on their smartphone to pay for purchases. Non-members can use a credit or debit card. In these stores, there are no price tags at all: You scan the items with your phone and have a price delivered to you, personalized by Amazon. “Our goal with Amazon Prime, make no mistake,” says Amazon CEO Jeff Bezos, “is to make sure that if you are not a Prime member, you are being irresponsible.” For eg., there is  speculation that Jeff Bezos is going to offer the COVID-19 test as part of Prime membership.

The Spanish sociologist Manuel Castell  predicted that in the networked age, more value would accrue in controlling flows of information than in controlling the content itself.  Controlling content increasingly involves autonomous, self-teaching systems that are increasingly inscrutable to humans. Gatekeepers like authors, publishers and professional reviewers are immersed in books and writing styles their whole lives and regard books as sacred objects. They have discerning eyes and separate great novels from trash more often than the average man on the street. When these old world gatekeepers are gone, only one gatekeeper will be left - Amazon with its spreadsheet maniacs. What will be the kind of books that will be available when that happens? Evgeny Morozov says in To Save Everything Click Here:

If one thinks that the goal of literature is to maximize the well-being of memes or to ensure  that all readers are satisfied (and why wouldn't they be, given that the books they read already reflect their subconscious inclinations and preferences?), then Amazon should be seen as the savior of literature. 
 But if one believes that some ideas are worse than others, that some memes should be put to rest rather than spread around, that many authors are public intellectuals who serve important civic functions that surely cannot be outsourced to algorithms, and that one of the goals of literature is to challenge and annihilate, than to appease and amplify - then there is very little to celebrate in Amazon's  fantasy world without gatekeepers.  
This is only books but Amazon's ambition extends to every other commodity on earth. To understand the depth and breadth of Jeff Bozos’ ambitions for the company he built, consider the original name he chose - 'relentless'. He still retains the domain name and if you type into your browser it  will redirect to Amazon, the company aptly, and ambitiously, nicknamed The Everything Store. He tells his shareholders that the company will act like an aggressive startup — that at Amazon, it is always Day One.  There will be many ways that Amazon can use its power and you can be sure that it will exploit them relentlessly. For eg., you may seeing different prices depending on any way that you interact with Amazon.

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