Can Instagram bounce back after terms of service storm?

By Dave Lee
Technology reporter, BBC News

Image caption,
Twitter users flocked to denounce photo-sharing site Instagram after a proposed policy change

On the internet, as in life, there is no such thing as a free lunch - especially if you plan on posting a picture of it on Instagram.

That's why when Facebook bought the photo-sharing social network for a massive $1 billion (£629m) in April, it knew it must eventually find a way to make money from its huge number of loyal users.

On Tuesday, the site announced there would be a change to Instagram's terms of service, including the addition of this crucial line: "You agree that a business may pay Instagram to display your photos in connection with paid or sponsored content or promotions without any compensation to you."

Many users were outraged. Twitter was awash with posts about deleting accounts - even Facebook owner Mark Zuckerberg's sister got on board - "liking" a post on Facebook entitled "Instagram's suicide note".

National Geographic magazine said it was suspending any of its new posts on the platform, saying it was "very concerned with the direction" of the new terms.

One software developer wrote that a "translation" of the new terms should be: "You are not our customers, you are the cattle we drive to market and auction off to the highest bidder. Enjoy your feed and keep producing the milk."

'Genuinely shaken'

But Facebook has defended itself, moving swiftly to dispel fears that it wants to sell users' pictures.

Image caption,
Some disgruntled users said they would instead sign up to Flickr, which also offers filters

One source at the company told the BBC that much of Tuesday's outrage was based on a "theoretical worst case scenario", and that Instagram's owners were "genuinely shaken" by the level of negative reaction.

Nevertheless, it has conceded - and new terms of service could be ready as soon as next week, with some speculating the site will simply roll back to what had already been in place.

But has long term damage to how users feel about Instagram already been done?

"For better or worse, they're trying just trying to get their business straightened out and generate revenue," said Brian Blau, research director in consumer technologies at Gartner.

He believed that the site needed to learn from the experiences of Facebook - a site on which every change of policy, design or function is often met with condemnation from vocal users.

"They run a giant community," Mr Blau said. "You have to treat it like one. You can't just be a dictator."

'Loving it!'

Facebook would not comment on how many users Instagram had lost since the debacle began.

Nor was it clear precisely how many jumped-ship to rival offerings. Many users suggested moving over (or rather back to) Flickr - which coincidentally launched its own Instagram-like app last week.

When contacted by the BBC, an upbeat source at Yahoo-owned Flickr admitted they were "loving it" and quickly pointed out its own terms of service which allows uploaders to set usage permissions for each individual picture.

Image caption,
Instagram pictures, like the one above, are popular for their filter effects

Another service, Starmatic, was even more boisterous about its success. Since launching three months ago, and despite being visually appealing, the app has struggled to build a substantial number of users.

The common gripe was that it was too similar to Instagram, but on Tuesday that proved to be a blessing - the app's owners have said that over one million pictures were uploaded to Starmatic in that single day, almost double the total amount posted to the service in the three months since its launch.

Not only that, the service also thinks it has got a major coup, with "superstar" Instagram user Richard Koci Hernandaz uploaded his vast archives of pictures to the service (although he is yet to delete his Instagram page).

Strike three

In reality, while social networks echoed yesterday with what seemed like a mass abandonment, the immediate impact on Instagram looks to be minimal.

Many users took the same view of celebrity Kim Kardashian, who stated she was going to "review" the policy, but not delete her account just yet.

However Gartner's Mr Blau warned that incidents like these could begin to chip away at Instagram's reputation.

And, unlike Facebook - with its spider web of friend connections, history and data - a simpler site like Instagram is much easier to give up on.

"There aren't the same kind of alternatives with Facebook," he said.

"It's not so easy to move your connections to people and go somewhere else. It's a little bit different [with Instagram] - I think people are going to migrate around."

He added that Instagram will need to learn from the last couple of days if it is to progress forward with monetisation.

"They have to be careful and match the way they're going to monetise with the community and what they want.

"People are used to advertising. As long as they do it tastefully - and keep it a nice, independent, creative community, they'll be OK."

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