Writings of a techie wizard
Tue, 18 Dec 2012
A while ago I explained why I'm not crazy about the cloud. In that post I stressed that, since you're not a paying customer to "cloud" services like Facebook and Google, you don't get to decide how they're run. Now I want to talk about another aspect of the cloud that seems risky to me: you don't get to decide how the data you post to a "cloud" service is used.
Yesterday, Instagram, which was recently acquired by Facebook, released updated Terms of Service which were widely interpreted as claiming the right to sell your photos without giving you a penny of compensation. Of course this caused much outrage all over the Internet, and Instagram responded by clarifying why they changed their Terms of Service:
This seems clear enough, and further on there is more clarification:
So this looks, on its face, like a good story about a cloud service. The service proposed new terms (it's important to note that the new Terms of Service will not take effect until January 16, 2013, so Instagram was not trying to slip anything by), people raised concerns, and the service responded to those concerns. There is even an explicit recognition that Instagram users own their photos, not Instagram itself:
All of this sounds good. But it begs the question: if Instagram is so concerned about its users, and if it's so valuable to them, why doesn't it let them pay for the service?
The more you look at what Instagram says, the more this question comes to the fore. For example:
Yes, indeed. So why is it the only one that Instagram appears to be pursuing? And why is it continuing to pursue it when it has already led to one near miss? Instagram responded well this time, but if they weren't depending on ads for their business model, they wouldn't have had to respond at all.
What's more, the "context" they provide about their business plans makes you wonder where "innovative advertising" fits in:
What does any of this have to do with ads? It's just straightforward social networking.
I should make clear that I am not accusing Instagram of being engaged in a deep conspiracy to hoodwink users, as some comments on the Hacker News thread have implied. I am quite ready to believe that they are perfectly sincere. That's the problem: they sincerely believe that pursuing "innovative advertising" is a good business model, but just charging users for a service that is obviously valuable is not.
This blind spot is not limited to Instagram, of course. Facebook itself has the same problem, although to be fair, Facebook's users fit a very different profile from Instagram's users. Google has the problem too; in fact, the problem is worse with Google, because their core search service is at a more fundamental level than social networking. And yet those core search results are now less useful because they can be skewed by personalization, and can preferentially show results from Google services over competitors. In fact, the case of Google is probably worth its own post all by itself.
Of course, the direct impact of this blind spot will be felt by the cloud services themselves, not users; but how will the services respond? It would be nice if they would respond in the obvious way, by finding ways for users to pay them directly for the value they receive. But I don't see any big push in that direction. Instead, I see cloud services looking for more and more creative ways to monetize their users' data while keeping the service free. Unless the service gets driven out of business by some competitor that does let users pay directly, there is only one way this trend can end, as far as you the user are concerned: "your" data will ultimately not be yours. It's great that Instagram wants to protect its users' rights, but it's not up against a hard choice (yet) between cashing in on its users' data and going out of business. What will happen when (not if) it is?
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