Instagram’s recent change to their terms and conditions raised quite a ruckus. It essentially said that the company had the right to sell your photos to someone else without your permission and without compensating you. Ouch… The reactions have been pretty extreme, from users dumping their Instagram accounts to those saying, “Suck it up and stop whining – you aren’t paying for the service!” Each perspective (and everything in between) has some merit.
After the internet erupted in flames regarding this issue, Instagram’s co-founder quickly issued an Orwellian statement that went something like this, “Well, I know we stated that we had the right to sell your photos and not compensate you, but that was really not our intent.” Really? Hmmm… let’s look at the language:
“Some or all of the Service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.”
I don’t know about you, but I find the language to be pretty clear. Not only have you agreed to this provision for your photos, but as a parent of a child under 18, you have also offered your consent for Instagram to use your children’s photos, once they have clicked the check box next to Instagram’s terms (which you may or may not have been aware of). Won’t you be surprised when one of your teens does something stupid, snaps a shot of it, and then you see it prominently displayed all over the internet in an ad for some product… for years! How special is that?
So how should you think about the policies of such services and put them into perspective? Read on…
What Is The “Product?”
I find it rather amusing to see how outraged people can be regarding such policy changes, considering that they pay nothing for the associated service. My first inclination is to ask “Just what do you believe you are owed for the $0 you pay company X?” The internet has ushered in a new level of people believing in the concept of a “free lunch.” So many applications, websites, utilities, tools, etc. are free that some, who might wish to charge for something, are greeted with a tone of righteous indignation. Many, even within the technical community, rarely consider where the money to pay for these services comes from.
When you join Facebook, Instagram (now also Facebook), MySpace, Google, Youtube (part of Google), Twitter, etc., you may think of the service as the “product.” But as someone once said, “If you are not paying for something, then you are the product.” That’s right – you are being sold. To whom? Anyone that wishes to market something to you. In the case of Instagram, it is also seeking to create its own private stock photography agency, all courtesy of your pictures. Nice deal if you can get it, huh?
The $1 billion of cash and stock it received from Facebook should have given everyone a rather obvious clue that Instagram wasn’t attempting to be the “Red Cross of Software!” ;)
The Nature Of The Beast
The business model of providing some form of content or service via a website for free and selling advertisements is not similar to non-subscription radio and television. And while most people now pay for subscription cable networks, subscriber fees represent a small fraction of the content providers’ revenues. Most of the revenues earned by media companies come from advertisers that are willing to pay handsomely to get their message in front of you. The same goes for many websites. Many people think of Google as a “cool” technology firm, and yet if you look under the covers, it is first and foremost, and advertising company. If you doubt that, simply ask yourself how much you pay for Google Search, Docs, Earth, Google+, Toolbar, Talk, Gmail, etc. (hint – that would be $0).
So if you are not paying a subscriber fee that covers the service provider’s costs and allows the company to make a reasonable profit, how can it stay in business unless it uses some form of advertising or purchase-based transaction fees? While technology prices continue to plummet as throughput and and storage capabilities significantly expand, the server farms and technicians to maintain them can still cost plenty. Something to think about the next time an ad is served up on a website you visit…
Your Rights As The “Product”
Simply put, you can elect to continue using Instagram or not. According to some reports, nearly three-quarters of a million users ditched their Instagram accounts, many after using a handy utility such as Instaport, which enabled them to download their photos from Instagram and repurpose them on other social media sites. One might imagine that this widespread defection on day 1 of Instagram’s attempt to abscond its users’ photos and sell them to others was responsible for Instagram’s founder backing off the company’s original plan. It seems that the idea of their photos and/or those of their children being sold by Instagram without their permission and compensation was a bit much. Nice try, Instagram… ;)
But while you aren’t paying Instagram a penny, the firm still cares about what you think, at least to the extent that dissatisfaction regarding its policies is widespread and threatens to affect a significant portion of its user base. If Instagram loses enough users, it diminishes its claim to fame of having a large, diverse audience – something of value to current and potential advertisers. It also enables others (perhaps such as Google that purchased the widely acclaimed Nik Software company, of which I am a huge fan) to capitalize on such stumbles.
The lessons of Myspace haven’t been lost on many social media-type firms. While such companies may be easy to start and can grow exponentially with relatively small investments, their end users are fickle. Myspace showed how quickly today’s wunderkind can quickly go to being yesterday’s news. No doubt, Instagram realized that its new terms regarding using its users photos without permission and selling the rights to them to others wasn’t going to fly and did the wise thing by reversing its decision, albeit rather awkwardly. Of course, this begs the question regarding what other revenue source it will attempt to tap into next?
Going Forward – “They’ll Be Back!”
I don’t think Instagram was simply being naive regarding the change in policy. Instagram calculated this policy very carefully and decided to see how much of a backlash it invoked. Over the last ten years or so, we have seen social media firms and others in the internet space float many “trial balloons” regarding their ability to push the envelope when it comes to privacy and copyright issues. The use of such online services and tools is changing the nature of how we perceive privacy, copyright, and intellectual property.
As I wrote some time ago, Pinterest has been instrumental in this area. Millions of users are now believe it is perfectly acceptable (and in some cases, their “right”) to post the photos of others (without the owners’ permission) on Pinterest’s site simply because they like the photo. No doubt that Pinterest’s management is keenly aware of how they are affecting the public’s perception of both privacy and copyright issues. Of course, someone posting a photo is technically supposed to get permission from the owners of the photos before doing so according to Pinterest’s terms and conditions (wink, wink!). Right. Who would have thought that a business could be built around the notion of enabling people to take the photos of others and post them to a website?
Users of any internet service (particularly those they are not paying for) should be mindful of the associated existing terms and conditions and stay abreast of any changes. Instagram will retrench a bit after this episode, but it will be back with another policy change in the future that attempts to make it more palatable for some to exchange more personal information of some sort. If it continues to find that people are resistant to such use of their information and photos, don’t be surprised to see Instagram implement some form of fee for using the service.
Did anyone really believe Facebook paid $1 billion dollars to Instagram simply to expand the opportunity for us to add cool looks to our photos and share them with others for free? ;)