Instagram’s New Privacy Policy: Will the Service Be Around in a Year?

AInstagram icons you’ve no doubt read by now Instagram changed its privacy policy to pave the way for advertising, including using user-generated photographs in ads. This is driven in part by its new Facebook ownership and the success of Sponsored Stories on the Facebook side of things.

Facebook paid nearly $1 billion for Instagram because its growth was seen as a long-term threat to Facebook especially among tweens and teens. Now Facebook wants to pay for the acquisition and boost mobile revenue.

However, in the wake of the new privacy policy changes we have to ask the question about whether the service will be viable a year from now. First, the NY Times has a great summary of the privacy changes:

  • Instagram can share information about its users with Facebook, its parent company, as well as outside affiliates and advertisers.
  • You could star in an advertisement — without your knowledge.
  • Underage users are not exempt.
  • Ads may not be labeled as ads.
  • Want to opt out? Delete your account.

I’ve excerpted the “headlines” but you can see the new provisions explained in more detail in their piece.

There is no question that Facebook will be forced to roll back some of these changes. Right now the company watching to see how outraged people get and how many defections occur. Many of these new changes will have to be modified — either because of the backlash or because of swift FTC intervention.

I’ll say again that there will be privacy regulation next year — the perception in Washington is that “self-regulation” has failed — that will effectively make unilateral moves such as the new Instagram privacy policy impossible.

Flickr and Twitter have implemented Instagram-like features and some number of current Instagram users will migrate to those services. Younger users may switch to Snapchat as an Instagram alternative (or perhaps ironically to Facebook itself). Indeed, Facebook is already building a Snapchat-like capability because of the service’s rising popularity.

But a larger issue that this controversy once again raises is: the “perishable” nature of Internet businesses. MySpace is the poster child; more recently so are Zynga and Groupon. But Instagram could be next: super-hot one year, in decline next year.

These businesses are big and but also fragile — and fickle, short-attention-span users have plenty of alternatives. Indeed, social media sites are all about “the party.” And once the party cools down or “becomes a drag” the exodus can begin or accelerate.

This new Instagram privacy policy is poison for its users. Recognizing this, I would guess before the week is out we’ll see a reversal by Facebook. Given all Facebook’s problems and experience with privacy policy changes one would have thought this might have been handled a bit better.

Update: From the “it’s better to ask for forgiveness” school of management, Instagram is already backtracking — although spinning that many of the complaints and criticisms were merely misunderstandings.

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7 Responses to “Instagram’s New Privacy Policy: Will the Service Be Around in a Year?”

  1. Jeffrey Magner says at

    Oh finally an article about Instagram without the Spin. I wonder what the people in the stock photo industry think of this.

  2. Greg Sterling says at

    Instagram claims it’s not going to sell user photos now. Clearly that was one of their ideas. Industry would hate it.

  3. Greg Sterling says at

    Despite the policy reversal, the damage is done and Instagram may slowly continue to lose users: http://www.nytimes.com/2012/12/22/technology/instagram-reversal-doesnt-appease-everyone.html?ref=technology&_r=0

  4. Adam Wagner says at

    I don’t think the inclusion of advertising will kill the service. Obviously, users prefer and ad-free environment, but the introduction of advertising alone is not enough to slow-down Instagram. As in the Myspace example you referenced, Instagram will stay in its powerful position as long as the next cool social network does not arrive. However, as soon as there is a more engaging product available users will begin to defect. 

  5. Greg Sterling says at

    I agree that ads by themselves won’t have a major impact. It was the privacy policy implications not the concept of advertising itself that was so objectionable to many people. 

    The larger point about the longevity of these services is more interesting. 

  6. Painters says at

    I’m part of the “tech news bubble” so it seems like this is a huge story. However I really doubt that the vast majority of users would even know about this “issue”. For example my wife is a massive user of instagram and hasn’t mentioned a thing. Thoughts?

  7. Greg says at

    It’s often the case that we get worked up over some obscure controversy that has limited or no impact on the public at large. Sometimes that’s becuase the issues require explanation and education and sometimes it’s because people geninuely don’t care. 

    In this situation some number of Instagram users did care and left. But the roll back quelled the negative publicity and likely prevented the kind of damage I describe above. My 13 year old daughter was told about the changes and she was really upset by them. 

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