Instagram's New Terms Of Use.

Today, people on Twitter were abuzz about Instagram’s updated Terms of Use. Specifically, this clause:

2. 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.

Frankly, I’m not sure why this is surprising to anyone, but we’ll get to that in a minute. First, let’s break down the clause.

Some or all of the Service may be supported by advertising revenue.

Translation: We, Facebook, paid an ass-ton for a service with no business model because it had a bunch of users and we sucked at mobile. It turns out that our investors expect to make money. Accordingly, all of the Service will be paid for by advertisements since we aren’t creative enough to devise another solution.

To help us deliver interesting paid or sponsored content or promotions

Translation: We wanted to see if we could actually write “interesting” to describe advertisements without you laughing at us.

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.

Translation: Since we are not creative and must rely on ad revenue, you need to become the product for our customers. The problem is that most of your photos suck - we’re looking at those of you who post every damn piece of uninteresting food you eat or every non-unique thing your smelly animal does.¹ Just in case you do post something that looks decent, we’re going to need to use it to promote our site. If your photos do stink, worry not, you are still valuable. Advertisers care about what you are interested in and where you are located. Since we don’t want to seem creepy like your Uncle Lou, we will use jargon like “metadata” in place of terms like “demographic information” or “your location”. Unfortunately, since you are the product, we can’t pay you. You see, that would hurt our efforts to make money.

Now that we understand what the terms say, can you understand why this is nothing new? Instagram is the perfect example of today’s classic startup revenue model:

• Person has a cool idea
• Person secures funding from investors to help make the idea real
• Person wants as many people to use the product as possible, so the service is made free
• Person is happy about launching product and will worry about making money later
• Service is popular and the user-base explodes
• The more people use the service, the more money the company loses
• Investors are happy about the service’s success and now want to make a return on their investment
• Person informs them he doesn’t have a business model yet
• Investors turn up the heat and “encourage” the Person to find one
• With a lack of ideas and a desire to make money, the Person either defaults to an uncreative ad revenue system, or sells the company to a larger company who will then default to an uncreative ad revenue system
• The company owners are now the advertisers’ biotch
• Users go from using the product to being the product

Here’s the thing: If you desire any expectation of privacy or sole ownership of the things you create, you must pay for the service or product you used to make them. That establishes a direct relationship between you and the service provider. When you choose to use a service at no cost, there is no direct relationship and you will instead be subject to the terms agreed upon by the parties that do have such a relationship - namely the service provider and the advertisers.

When you pay for something, that something is the product. When you don’t pay for something, you are the product.

I will probably cancel my Instagram account since I do not agree to those terms. I will instead use Flickr Pro. The new app is really good and I can pay for an ad-free experience.