Bits Blog: Instagram Does an About-Face

Eric Piermont/Agence France-Presse — Getty Images Kevin Systrom, chief executive and co-founder of Instagram.

11:14 p.m. | Updated
SAN FRANCISCO — In the aftermath of the uproar over changes to Instagram’s privacy policy and terms of service earlier this week, the company did an about-face late Thursday.

In a blog post on the company’s site, Kevin Systrom, Instagram’s co-founder, said that where advertising was concerned, the company would revert to its previous terms of service, which have been in effect since October 2010.

“Rather than obtain permission from you to introduce possible advertising products we have not yet developed,” he wrote, “we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.” Users had been particularly concerned by a clause in Instagram’s policy introduced on Monday that suggested Instagram would share users’ data — like their favorite places, bands, restaurants and hobbies — with Facebook and its advertisers to better target ads.

They also took issue with an update to the company’s terms of service that suggested users’ photos could be used in advertisements, without compensation and even without their knowledge.

The terms of that user agreement said, “You agree that a business or other entity may pay us to display your user name, 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.”

Following a reaction that included customers defecting to other services, Mr. Systrom told Instagram users on Tuesday that the new policy had been misinterpreted. “It is our mistake that this language is confusing,” he wrote, and he promised an updated agreement.

That statement apparently was not enough. With more people leaving the service, the company, which Facebook bought for $735 million this year, reacted again by returning to the old rules.

Acknowledging those concerns late Thursday, Mr. Systrom wrote: “I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos — you do.”

Mr. Systrom said the company would still be tweaking its privacy policy to quell users’ fears that their photos might pop-up on third-party sites without their consent.

But Mr. Systrom did not clarify how Instagram planned to monetize its service in the future. Facebook is under pressure to make Instagram earn income.

“It’s a free service — they have to monetize somewhere,” said John Casasanta, a principal at Tap Tap Tap, the maker of Camera+, a photo-filter app that has shunned advertising and instead charges users for premium features. “The days of the simple banner ads are gone. Their user data is too valuable.”

It was unclear whether reverting its terms of service would be enough to satisfy high-profile users like National Geographic, which stopped using its Instagram account in light of the moves, or other users who have aired their grievances on Twitter and Facebook.

The controversy has driven traffic and new users to several other photo-sharing applications.

Pheed, an Instagram-like app that gives users the option to monetize their own content by charging followers to see their posts, gained more users than any other app in the United States on Thursday. By Thursday morning, Pheed had jumped to the ninth most downloaded social-networking app in Apple’s iTunes store, just ahead of LinkedIn.

O. D. Kobo, Pheed’s chief executive, said Thursday morning that subscriptions to the service had quadrupled this week and that in the last 24 hours users had uploaded 300,000 new files to the service — more uploads than any other 24-hour-period since Pheed made its debut six weeks ago.

Another runaway success was Flickr, Yahoo’s photo-sharing service, which redesigned its app last week to make it easier to share photos on Twitter. In a stroke of good fortune, it released the app to positive reviews just as Instagram announced it would no longer sync with Twitter, a Facebook rival.

The day before Instagram announced changes to its terms of service, Flickr’s mobile app was ranked at around 175 in Apple’s overall iTunes app charts. Since that day, the application skyrocketed to the high 20s.

Of course, most of these services are still tiny compared to Instagram, which claims to have more than 100 million members who have uploaded upward of 5 billion photos using its service. And it was unclear if the services’ newfound members had also deleted their Instagram accounts or were merely dabbling in other offerings. But the migration, whether temporary or permanent, was a reminder of the volatility of success and that the fall to bottom can sometimes be as swift as the rise to the top.

Facebook and Instagram declined to say whether they had seen any significant number of account deletions or if they were concerned about losing ground in the photo-sharing market to rivals. Some photo apps took direct aim at Instagram. Camera+ even went so far as to include a snide, holiday-themed reference to Instagram’s stumbles in an app update on Wednesday.

“We’ll never do shady things with your shared pics, because it just isn’t right,” the update noted. “On that note, happy Christmas to all, and to all a good night!”

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Facebook Responds to Anger Over Proposed Instagram Changes

But when Mr. Pinnix, 40, learned this week about changes to the company’s terms of service that would apparently allow his photos to be used as advertisements, he did not hesitate. He deleted his account and has not looked back.

“Many of the photos I take are of my wife and kids,” he said. “The idea that those could be used in ads without my consent is disconcerting.”

Concerns like those have been mounting on social networks this week as Instagram users reacted to the coming changes, part of a push by Facebook, which bought Instagram this year, to make money from the service.

On Tuesday evening, the complaints, which included angry Twitter posts and images on Instagram protesting the changes, prompted action. Kevin Systrom, a co-founder of Instagram, wrote a blog post saying the company would change the new terms of service to make clearer what would happen to users’ pictures.

“We’ve heard loud and clear that many users are confused and upset about what the changes mean,” he wrote. “I’m writing this today to let you know we’re listening and to commit to you that we will be doing more to answer your questions, fix any mistakes and eliminate the confusion.”

Eric Goldman, an associate professor at the Santa Clara University School of Law, said the latest skirmish between Facebook and its users was part of the sometimes uncomfortable dynamic between companies offering free online services and their eventual need to turn a profit from them.

“The interest of the site is never 100 percent aligned with the users, and the divergence inevitably leads to friction,” Mr. Goldman said. “It’s unavoidable.”

When Facebook announced the changes on Monday, it provided few details about how it would integrate advertisements and photos, other than to say that when the changes took effect on Jan. 16 they would not affect any photographs uploaded to the service before then.

That did not prevent unhappy users from threatening to take their portfolios of photographs to rival services, such as EyeEm, another social photo-sharing application. Many, including Mr. Pinnix, considered returning to Flickr, the former king of photo-sharing services, which is owned by Yahoo. In a stroke of lucky timing, Flickr had just released a new application for the iPhone that has drawn considerable praise from users.

The operators of services like Instaport.Me and Instabackup, which let people create copies of their Instagram photos, said they were seeing higher-than-average volume.

Linus Ekenstam, who helped found a service called Copygram that lets people back up their Instagram accounts and order physical prints of their favorite photos, said demand for the company’s free exporting tool had skyrocketed.

“It’s a thousand percent more activity than we’re used to,” he said. “Today is crazy.”

He estimated that 15 people per minute were using the exporting tool, and half a million photographs had been backed up.

Of course, that is a sliver of the expanding Instagram universe. The company has said that more than 100 million users have contributed more than five billion photographs to the service. But should that momentum slow, it could damage the plan for producing advertising revenue on the scale Facebook was counting on after spending $735 million in cash and stock to buy Instagram. The company also risks scaring off skittish brands and advertisers who would not want to anger Facebook or Instagram users who disagree with how their images are used.

The history of the social Web is full of cautionary tales of companies, including Digg and Myspace, whose users eventually got so fed up with how the companies meddled that they fled, leaving the companies in ruin.

In Tuesday’s blog post, Mr. Systrom sought to quell the mounting unrest and reassure users that the company would not be peddling photographs of children playing on the beach or friends partying in nightclubs to the highest bidder.

“To be clear, it is not our intention to sell your photos,” he said.

He said that the company also did not intend to put its members in advertisements.

“We do not have plans for anything like this, and because of that we’re going to remove the language that raised the question,” he said. “Our main goal is to avoid things likes advertising banners you see in other apps that would hurt the Instagram user experience.”

He did concede that the company might do something like promote a brand like Topshop and show Facebook visitors which of their friends already follow Topshop, blurbs that could include their user name and avatar.

Mr. Systrom also reassured Instagram users that they still “own their content and Instagram does not claim any ownership rights over your photos.”

“Nothing about this has changed,” he said.

Of course, Mark Zuckerberg, Facebook’s chief executive, said nearly the same thing in April: “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook. That’s why we’re committed to building and growing Instagram independently.” Since then, the company has cut off Instagram’s easy integration with Facebook’s rival Twitter and bound the photo service more tightly into Facebook.

Rebecca Lieb, an analyst with the Altimeter Group, said worries about Facebook changing for the worse had become common almost any time Facebook altered its site, whether in the design or in its privacy policies. It underscores the importance and omnipotence of the service in its users’ lives as much as it signals a distrust of Facebook.

“There’s always a reaction when Facebook does anything because the user base is so unbelievably large,” Ms. Lieb said. “But while what its users say can be very loud and very viral, what they do can be two very disparate things.”

“There are always Facebook users who say ‘This is the last straw,’ ” she said. But in the end, she said, “There’s not a lot of portability. Where would you go?”

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