Instagram Attempts to Monetize, World Doesn't End

Sam Biddle, writing for Gizmodo:

What none of these hair-pulling photo-sharing apocalypse-moaners neglect to mention is that Instagram's a business. A business that charges nothing for something that millions of people use constantly. In that sense, it's a crazy business. It's also a business that Facebook bought for one billion dollars. Facebook isn't the World Wildlife Fund or a soup kitchen—it's also a business, and one with very angry shareholders who expect to see a return on Facebook's insanely insane purchase. Ergo, Instagram needs to start making money.

Amidst the furor over Instagram's terms of use revisions, Sam Biddle of Gizmodo provides a moment of rational pause.

According to the revision, Instagram now reserves the right to use your likeness and sell your personal photography — without your permission or profit — to third parties. While that's unquestionably troublesome, as Sam Biddle and innumerable others have highlighted, what else could you've possibly expected?

For years, Kevin Systrom has failed to outline a solid business model for the company. As a result, Instagram fans have been onerously concerned about the ever-deepening hole the company was digging itself into. Per simple economics and business sense, Instagram could not simply pivot into a paid app, nor could it non-destructively introduce a subscription program. The service had millions of active users engaged with a certain quality of service that, if sacrificed, would prompt a mass exodus from the service.

Thus, as many rational people surmised months ago, Instagram was inevitably going to have to introduce some sort of advertising model. Facebook, given its stuttering IPO, is simply not in a position to take a $735 million bath on an unprofitable service.

As is standard regulation, however, dedicated geeks are utterly outraged over a relatively minor element of change. Photographs of plane wings, sunsets and rises, lattés, puppies, and piles of leaves are all now in jeopardy of being re-purposed in advertising materials. And yet, these are all photographs of subpar quality amongst a user pool of 200 million which are frequently poorly taken — a relatively unattractive prospect for the vast majority of advertisers, I dare say.

If you're genuinely saddened that you might not make money from some photographs you took on your iPhone 4 two years ago on a free photography social network you still freely enjoy now, then yes, please close your account. But, for the rest of us, welcome to the very nature of modern business.

Despite cries for better business plans, a sizable portion of up-and-coming startups rely upon models utterly bereft of monetization strategies. The sole objective is to reach critical mass and be absorbed by an ever-swelling, engorged, and mostly unprofitable social network. Although the problems with this strategy are obvious, it's simply the way the startup economy works today. Venture capitalists are certainly becoming increasingly aware of the problems therein, but the prospect of becoming the next Twitter or Instagram far outweighs the task of raising several rounds of investment.

Since merging with Facebook, I suspect Instagram's adoption has shot through the roof. From an entirely non-scientific survey of my Facebook and Instagram feeds, I continue to see non-tech acquaintances flocking to the service. Accordingly, I highly doubt the quibbles of some early adopting and definably fickle geeks will upset the folks attempting to squeeze some money out of Instagram.

We, as the early-adopting public, should be accustomed to the systematic deconstruction of our most favorite services. Once a safe-haven for general geekery, Twitter has forsaken our third party apps and has embarked upon a path to become a media-centric company. For all of our argumentative whining against this shift, we are simply not the target demographic any more. Having helped the service gain critical plaudits, our purpose and role has been subverted by the ongoing deluge of the hashtag-using, TV-watching, web-interface-appreciating public.

Rather than stand, mouths agape, each time a free service decides that it must make money at our relatively minor expense, is it not time that we can simply react with reasonable expectance? Of course Instagram was going to move in this direction, particularly considering its owner. Of course Twitter, after years of failing to monetize, would leverage the most user-engaged portion of its business. Maybe it's upsetting, but it's also just business.

If you want a sustainable alternative to Instagram, build one. If you're reading this, you're almost certainly one of the people most capable of successfully doing so.

Or, if you're happy using a free service with an ever-improving app, happy engaging with a well-developed group of friends, and resigned to the fact that your next latté might stand an extraordinarily remote chance of ending up in someone's marketing materials, then stick with Instagram.

But, please, let's stop fetching the fainting couch each time a business belatedly decides to initiate a vague attempt at actually making some money. For the time being, it's the way of the tech world and, without significant change, it will continue to be for quite some time.