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I don't mind these "paid" reviewers; but Amazon should clearly indicate whether the reviewer is (a) a buyer who bought the product, or (b) a reviewer who was given the product to review, or (c) some random dude. I think they do tag reviews as "verified buyer" or something like that; it's the other two that need to be tagged.
They do say if someone got it through vine.
This is correct. They also show when someone is a Vine reviewer (which is an invitation-only program), even if the product being reviewed was purchased, and not provided via Vine.

The conflict of interest argument will always carry some weight re: the Vine program, but Amazon seems to be handling it quite well. Anyone who doesn't like the program is given enough information to just ignore those reviewers.

It's interesting that, according to the Amazon spokeswoman, items with negative reviews sell better than items with no reviews.
Makes sense. A negative review implies that the product was delivered. No reviews calls into question the legitimacy of the seller.
This is true for me with third party sellers. I've had bad experiences where small third party sellers list products incorrectly on Amazon and I have to go through the process of returning the product. A negative review can provide evidence that users are getting shipped the right product in the right condition.

In these cases, I often don't care whether the user actually likes the product. I just want to know they got the right product in good condition.

Also, a negative review might end up being positive for someone else. I have recently been looking at reviews of Sony noise-cancelling earphones, and made sure to read the negative review(s) as well. One reviewer gave it one or two stars because they thought the noise-cancellation functionality was not worth it. Somewhere, though, in his negative review he mentioned that the sound quality is excellent. Having older version noise-cancelling earphones and being happy with them, I assumed he got a faulty pair and decided to buy them anyway. (I actually ended up buying Onkyo earphones, but that because I ended up by their booth at the last IFA, tested the headphones and fell in love)
These are the Amazon reviews I hate. 2 stars because they bought more product than they needed? Put that in the same category of the 1 star reviews from people who bought the wrong product and had no problem returning it to Amazon.
I will often instantly move on from items with no reviews, while stay on the page to carefully read reviews otherwise, and often the negative reviews will clearly point out downsides that won't affect me, or at least make me think the item is ok for the price, so I'm not that surprised.

Certain mediocrity is sometimes preferable to the uncertainty of no reviews.

There is an interesting talk by Jason Cohen about honesty in business including Canon's experiment with negative reviews: http://vimeo.com/48549019
I think it's a case of correlation, not causation: a product gets negative reviews if there are people buying it. Essentially, a product without reviews is a product that people aren't buying (hence, not reviewing).
The article comments are worth a read, there are experiences from multiple vine reviewers, including multiple comments disagreeing with the NYU professor.
As a hibernating vine reviewer, I guess I also disagree.

I was offered mostly books to review. You sometimes get an early print full of spelling errors, which was quite a pain to read, especially if the book was not to your liking (most weren't to my liking). So, although I didn't pay for the book, I have spent a few hours fighting the urge to use it as compost. No way I will think more favourably about the book. However, I did spend some time thinking about the books I read and did try to write useful and balanced reviews because I felt as if I was paid to do so, and that it wouldn't be fair not to. This is despite not having to review every item you receive.

Only once I managed to get some earphones for reviewing . they were terrible compared to what I would normally buy, and so would have never bought them otherwise. And that was that I wrote in my review. Would I be more negative if I had to buy the earphones? I don't think so. I'd return them to Amazon and probably not write a review at all.

I stopped reviewing for Vine after a short while. Since I couldn't give or throw the stuff they sent me, I imagined me drowning in a pile of terrible, misspelt books after going deaf by rubbish earphones. I actually don't know how I got to be a Vine reviewer in the first place. I didn't have that many reviews (less than 10 when I started, if I remember correctly). Anyway, to begin with it felt like a honour (and a chance to bag free goodies) and at the end it was a chore (and discussions with myself whether it's moral to throw the stuff away) and I stopped.

> I stopped reviewing for Vine after a short while. Since I couldn't give or throw the stuff they sent me, I imagined me drowning in a pile of terrible, misspelt books after going deaf by rubbish earphones. I actually don't know how I got to be a Vine reviewer in the first place. I didn't have that many reviews (less than 10 when I started, if I remember correctly). Anyway, to begin with it felt like a honour (and a chance to bag free goodies) and at the end it was a chore (and discussions with myself whether it's moral to throw the stuff away) and I stopped.

This is my biggest problem with the program - the not being able to sell/chuck/return items they've sent. I don't have permanent room for a spin bike or a multifunction laser printer. There should be some way to keep the stuff you like and return the stuff you don't. Honestly I would not be surprised if some Vine reviewers ended up selling stuff.

Has Amazon actually asked people for anything back?

If you write good and positive reviews, you can expect free stuff and its been going on for a long time.

I remember reviewing Java & XML book in 2000. Author of the book mailed me a free copy of the book when next version of the book is released and asked if I can review the new version.

This might explain why some of the reviews make absolutely no sense at all.
As I listened to this story on the radio on my drive home last night I couldn't help thinking that Amazon's review volume is going to increase 10,000%. It's a common tactic; hype up a complete outlier and give people false hope they can follow the same path.
Are you implying they got free stuff for reviewing the review system of Amazon so more people start reviewing ? :-)
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They get to choose items from a list, so I'd hope they choose stuff they can use.