Surely you’ve heard of Instagram’s New Terms Of Service that will go into effect on January 16, 2013.  That’s probably what brought you here.  Let’s take a look at what it means.

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UPDATE: Backpedaling or clarification? http://blog.instagram.com/post/38252135408/thank-you-and-were-listening

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What is Instagram?

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Instagram, if you aren’t familiar with it, is a community based photo sharing service/mobile app that allows the user to modify images taken with their mobile device with a number of “filters” that change the look of the image.  The image must then be uploaded to the service for sharing.  It may then be “deleted” from the service, as it (for me, at least) saves a local copy on my phone, but it takes that extra step.  However, there is no way to use the filtering/modification part of the application without uploading it – you cannot just modify and save locally.  So, because of this, Instagram has a huge database of images on its servers.

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The Terms of Use

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The previous terms of service made no mention of monetizing the content by licensing it outside of the Instagram service itself:

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Instagram does NOT claim ANY ownership rights in the text, files, images, photos, video, sounds, musical works, works of authorship, applications, or any other materials (collectively, “Content”) that you post on or through the Instagram Services. By displaying or publishing (“posting”) any Content on or through the Instagram Services, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, worldwide, limited license to use, modify, delete from, add to, publicly perform, publicly display, reproduce and translate such Content, including without limitation distributing part or all of the Site in any media formats through any media channels, except Content not shared publicly (“private”) will not be distributed outside the Instagram Services.

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Sure, this is absolutely a broad statement.  What does “use” mean?  What does “distribute in any media channels” mean?  I believe the expectation that has evolved on the internet is that broad terms like this are so the service will have the rights to transfer your content through internet providers, for example, so people can view it.  Theoretically, that’s why you use it in the first place, right?  So that others can view it? (Here is a Photoshelter article pointing out the flaws in the old terms, as well)

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There is mention of advertising, and they are saying they can put the advertising around your photos as you and others view them:

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Some of the Instagram Services are supported by advertising revenue and may display advertisements and promotions, and you hereby agree that Instagram may place such advertising and promotions on the Instagram Services or on, about, or in conjunction with your Content. The manner, mode and extent of such advertising and promotions are subject to change without specific notice to you.

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However, the new terms are very specific in that Instagram is actually telling you that, if you continue the service, they are going to take your intellectual property, and use it as the basis for third party advertising, without your consent for each use, or compensation:

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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.

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This means that your picture of a coke bottle could be the basis of a huge Coca-Cola promotional campaign on Instagram, and you don’t get a penny or a say in the matter.  It isn’t too different from the previous statement except that they are telling you right there that you have become a source of a sort of licensable content to them.  They’ve just made it much, much clearer what they have been and want to continue doing.

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However, if any of these images cause a legal issue, that causes someone to come after the advertiser, and then Instagram, the problem will ultimately come back to you:

You represent and warrant that: (i) you own the Content posted by you on or through the Service or otherwise have the right to grant the rights and licenses set forth in these Terms of Use; (ii) the posting and use of your Content on or through the Service does not violate, misappropriate or infringe on the rights of any third party, including, without limitation, privacy rights, publicity rights, copyrights, trademark and/or other intellectual property rights; (iii) you agree to pay for all royalties, fees, and any other monies owed by reason of Content you post on or through the Service

So, you take a picture of your neighbor’s kids in the sprinkler, and it gets delivered on Instagram with an ad for child bikinis over it.  When your neighbor finds out and gets upset, Instagram says “Whoa, our terms state that the user has secured all the needed rights, and if they didn’t, that is their problem”.  Nice, eh?  As an advertiser, there is no way I would license any content from, or advertise on, Instagram.

Your Options

So, you’ve got two ways to resolve this.  1. Delete your Instagram account before the terms take effect.  Or 2. Allow them to use your content as they see fit.

Isn’t This Like Facebook?

Although Facebook owns Instagram, their current terms of use are like the old Instagram terms:

For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

So, no.  The new terms aren’t really at all like Facebook’s terms, at least when it comes to stated uses for advertising.

Who Would Want Instagram Pictures Anyways?

I’ve seen posts by people saying “Who would want crappy lo-res pictures of my cat?” or “Let ’em have them – it’s just snapshots of my feet”.  Which, 1. belittles a lot of the great photo work being done through the app, 2. mistakenly believes that 2048×2048 image is too small to do anything useful with and 3. shows that a lot of people don’t realize the value of their intellectual property.  Someone wants to use that image for something and they are willing to pay money for it.  It has value.  By agreeing to this, you are leaving money (all of it) on the table, and walking away empty handed.  I license some of my mobile work on iStockphoto, and it has been licensed, for real money, sooooo…….

What Will Happen?

People are deleting their account in droves.  I think Instagram will do a nice back-pedal on this now that people realize what is going on, but if not, there are plenty of applications to take its place.  The internet has no loyalty when it comes to stuff like this.  People will move to a new service that does the same thing.  Feel free to leave your favorites as suggestions in the comments.

5 Responses to Instagram’s Blunder

  1. MichaelJay says:

    Good analysis once again, Sean. Though I seriously doubt that the intentions of this are as bad as it is perceived – more likely a lawyer wrote this to be on the safe side for all eventual future services -, the final result looks really bad.

    And different than Facebook which didn’t have a serious competitor at the time they tried the same about a year ago, there are loads of other apps providing the same level of service than Instagram does right now. I doubt that people leaving now will ever return. So I hope it will be a lesson learned permanently for all service providers for the future.

  2. Libby Stack says:

    I deleted my very small image group but left one piece of crap just so they would have to maintain the account. I’ll probably never use the service again. I’ve switched to Starmatic and I like it a lot. Very cozy, some excellent work there, and I don’t have to look at too many cat pics.

  3. Libby Stack says:

    They, InstaGreed, are backpaddling now saying “Oh, that’s not what we meant.” Really…

  4. Vit Kovalcik says:

    This is almost a funny situation, if you think about it in a different way: Plenty of people write “Instagram is evil and wants to use photos, no way!”, but in many cases these are the same people that will happily download a photo and use it on their web/Facebook profile/… (“Hey, it was free from Google Image Search!”)

    This instagram situation could be almost used as a way for people to realize that photos do have some value. But I fear then in the end each one will just learn that THEIR OWN photo has value, but forgets that OTHER’s photo has value too.

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