[Reader-list] downloads and privacy

[Rana Dasgupta]

It’s all about the size of your database
****************************************

Further to Shuddha's mail...

I hope Steve Gibson is not surprised at what he has
discovered.  Everyone is collecting this information
and it’s very unlikely that anything will be put in
their way because it is the very foundation of the
much vaunted “new economy”.

Marketing is in general a very crude activity.  For
every 100 people who see a Nike ad in a place like
Delhi, I would imagine that 99 will never buy a
[genuine] Nike product.  This waste drives marketing
guys crazy since they are usually paying for their
marketing by the number of people who see it.  The
Internet raises the prospect of marketing that is much
less wasteful – and this is its key usefulness for
retailers.

This is not just because it makes it possible to
easily obtain the kind of banal demographic data (sex,
income, age etc) that only poor suckers who decided to
enter the post-purchase competition would surrender
before.  This would be to greatly underestimate the
power of networking.  The revolution comes because now
all your behaviour can be crunched together with
everyone else’s behaviour to develop highly accurate
predictive models of your tastes and desires.

In this scenario it’s simply not relevant whether
you’re 12 or 65, French or Chinese.  All that’s
important is how your behaviour matches with other
behaviours.  Just say you have previously bought John
Coltrane, the Harry Potter books, Abba, Foucault and a
DVD of Grease - on the net.  A site like Amazon knows
hundreds or thousands of other people who have made
these purchases.  When it proposes that you try Zizek
and Talvin Singh, it does so based on massive
processing power.  Amazon also offers you the option
of giving them more information about your tastes so
that their recommendations can be even better.

What separates Amazon from smaller retailers is that
Amazon has enough data from its own customer base to
generate these kind of correlations.  Smaller
retailers do not.  How can they compete with the
extraordinary precision of Amazon’s recommendations? 
By buying the same service from a broker of preference
information.  These companies – BeFree
(www.BeFree.com) etc – network many small sites
together and collect purchase histories across the
whole network, allowing each small retailer to benefit
from a really big database.  These brokers are of
course doing very well, since personalisation is what
everyone wants to offer.

The issues of privacy are legion.  If OJ Simpson’s
credit card purchases were invoked in 1996 as proof of
his character in his trial (he had ordered a porn film
on his AmEx) think how much more eloquently these
databases could speak now.  I am sure that the kind of
correlations that link reading Shakespeare, listening
to lounge music and watching the Matrix could also be
established between such interests and (for instance)
terrorist behaviour, and that the state could use them
to trawl for people who might succumb to such
behaviour in the future.  

This is to say nothing of the more everyday
unpleasantness of living in a world where networked
computing (and genomic knowledge) creates an
environment that is always making predictions about
you – from the kind of magazine you want to buy to the
age at which you will contract some nasty genetic
disease.

Whatever happens, I don’t believe that civil liberties
groups will succeed in achieving anything more than a
palatable formulation of data gathering because the
kinds of efficiencies that marketing on the Internet
will be able to bring have already come to be seen as
essential to the functioning of the economy.  Just as
has always happened before the surrendering of a realm
of privacy in the name of convenience ("I don't want
to have to surf through Amazon - I want it to tell me
what i like") will become orthodoxy.  


__________________________________________________
Do You Yahoo!?
Yahoo! Auctions - buy the things you want at great prices
http://auctions.yahoo.com/