There is a lot of talk about the recent changes in Instagram’s Terms of Service. They now claim that they are changing the terms so that they have the rights to sell the pics that they want to. Frankly, at the end of the day, Instagram is a business and it has the right to try to make money using the pictures uploaded on it. That said, the implementation of the idea seems to have fallen flat.

Instagram , as a product, is not something which is adding direct value to customer’s lives or saving money/time for them. Its a social network , which serves as a option for people to share their pics. Much of the groundwork for such a system has already been done by Flickr who was one of the path breakers in the photo sharing platform. Instagram has built upon that base and primarily targeted people on the move. The usage of filters and ease of sharing is what has helped Instagram build its customer base. That said, these are features which can be easily replicated and efforts are already in place at Twitter and other places.

When it comes to monetization, Instagram had three options -Target the User Base , Use the Content , Tie up with brands. The first option was impossible as no one would pay money to use the application and users would move away. The second option, chosen by Instagram has three problems associated. Firstly, the blunt expression of the change makes users feel that Instagram as a company, has moved from an app aimed at sharing moments of joy, to an app aimed at making money out of them. That user discontent may not manifest itself immediately in terms of loss of users but may be shown in terms of the quality of content now displayed. Secondly, professionals who might have shared their pics earlier might refrain from sharing these pics as they get no cut of the profits. Thus the only pics available to Instagam will be poor quality pics , taken in a hurry on phones . Close to 80 % of these pics would be of everyday events or food or people. Thirdly, selling pics which have a personal aspect might lead to issues of privacy infringement , which would probably get any of numerous regulatory authorities breathing down Instagram’s neck, needless to speak of the bad publicity.

What Instagram could have gone with, was a two pronged approach. On one end, allow users to select pictures which they are willing to sell. People could get a small cut of the sale as well ( could be something as low as 1% or a chance for advanced features on the Instagram app). Alternatively, sealing pics under the Creative Commons license so that Instagram can sell the pics but the rights belong to the original user could reassure the professionals and some of the amateur photographers. On the other front, Instagram could tie up with lifestyle brands to run special campaigns aimed at getting people to use Instagram not just as a photo sharing tool but as a marketing medium. With the existing user base, Instagram could easily tap into brands like Starbucks / Apparel brands. With apparel brands already alive to the possiblities with Pinterest, there is good scope for a partnership with Instagram.

At the end of the day, Instagram needs to focus both on the dangers of losing the trust of its customers and being hit by competition such as Twitter’s filters and Snapchat . At such a time, Instagram needs to focus not just on profitability but also on retaining existing users.


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