Why instagram is doing business the wrong way

You probably heard about how Instagram announced a couple of weeks ago that they were changing their terms of service. You probably also noticed how hard the internet roared, which made them tremble and quickly change back.  And so finally they announced this week that those revised terms of service were going into effect, without the advertising section. Sure they dodged a bullet here, even though it’s being said that they lost half of their daily users due to this change.

So their communication was something along the lines of “CHILL THE FUCK OUT, IT’S COOL” with the co-founder Kevin Systrom releasing a blog post clarifying the users that, even though those terms would allow the service to pretty much do whatever they wanted with your content, they wouldn’t. Yeah, sure.

Trust is something hard to come by in the internet. And by reading their updated terms of service and their privacy policy page, I don’t see how anything really changed.

But I totally get Instagram. They have 15.6 million daily active users and around 46.1 million monthly active users today, but apart from huge rounds of founding totaling $57.5M, a whole lot of traction and the biggest mobile purchase in 2012 at $1 Billion, they had no business. So it’s only natural that they are trying to make business out of “their” content, the millions of photos that users put out everyday. They have photos of everything, everywhere, with really good quality a lot of the time, considering the quality of the cameras you can find today in latest smartphones.

And brands are already engaging with the users trough Instagram’s API, by showing photos on their websites and asking for certain hashtags for specific campaigns, in competitions and in general communication, and this is a great way to connect directly to the consumers and to make the consumers a part of the brand, to make it more humane and more reliable, I’m all into that. But Instagram shouldn’t just grab all this beautiful content and win royalties out of it in advertising.

I believe that Instagram is doing business the wrong way. Instead of just using the users material, why don’t they make the user part of it? If a certain brand or campaign decides it wants to use a couple of pictures from the service, and pays for that service, it would make sense that the user, the creator and owner of the content being used, would be credited in the process and win something in between. There should be a small area with the name of the user, link to the profile and place where was taken. The user should then receive a small percentage of the payment that Instagram was receiving for using that image, just like royalties but in large number of views and small values of payment. And it should definitely be an opt-in/opt-out program. This way, the service would use the content, would profit from content that isn’t theirs, the users would profit from their content and probably would start to upload more pictures to the service, hoping to win even more.

And this way you would have the intended ads from the beginning, but really social, by putting the user in the process and making him a real part of the campaign. I think this could really work, and being an opt-in/opt-out program no one would be displeased with the service and, let’s face it, people have the right to retain their privacy, and the service should allow to do so. And it could even become profitable, because there’s lot of potential in Instagram for a social stock photo like service. And Youtube is already doing something like this with great results, by putting the content in the hands of the creator and sharing revenue.

So why not approach it this way? Wouldn’t this be a better way of making business? I know that I, personally, would trust a lot more a company that is willing to share revenue with me, specially revenue that is generated through my content, it’s only fair, right?

Let me know what you think on Twitter. Oh, and I’m also on Instagram.



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