Why You Should Want to Pay for Software, Instagram Edition

http://www.theatlantic.com/technology/archive/2012/12/why-you-should-want-to-pay-for-software-instagram-edition/266367/

by speednoise • 14 years ago

67 42 14 years ago

zalew3• 14 years ago

"X has Y millions of users, if they charged $5..." yeah, right. I am willing to pay for online services, but sharing phone pictures of coffee mugs or posting status messages isn't one of them. I bet most people feel the same.

jacktoole1• 14 years ago

While I agree with the overall sentiment of the article, the hypothetical monetization numbers in the last paragraph are just ridiculous. Getting 20% of a free userbase to pay anything is extremely high. ~0.2% to 2% sounds like a more likely number, based on my admittedly cursory knowledge of monetization of apps. $5 a month also sounds a bit high for essentially a photo-sharing service, a yearly charge of ~$20 sounds more likely. However, for users that have passed the "willing to pay anything" barrier, the actual cost might not as big a deal.

This also completely ignores the viral nature of these types of services; people are more likely to use Instagram when their friends are using it. Without being free, it's not clear whether it would have taken off enough to gain 2 million users (or whether it could keep 2 million after the remaining 98 million left).

That said, I'm all for paying for services, and much prefer that model to ads. But just because some of us would prefer that doesn't mean it would have been the right choice for Instagram. It's easy to look back and say "they should have charged users," but we can't be sure we'd be in a place to analyze them if they had.

SoftwareMaven• 14 years ago

I completely agree. But it would sure be nice if there was an option that said "Terms of Service A is free; Terms of Service B is $X/month". Then I could make the decision about whether the service/privacy/cost tradeoff is important enough for me to shell out either cash or privacy. This is especially true at points like this, when a service is trying to "go to the next level" in terms of revenue.

Use the free stuff to get people hooked, then let people decide how to pay for their habit. If you can make $25/year off of me through my private info, let me decide if I want to pay $25/year for your service (which is, quite literally, pocket change). As it is, I'll just stop using your service (like I'm going to stop using Instagram).

sounds2• 14 years ago

The Atlantic is being deliberately misleading here. Pay for Software? I think they should have said, "Why You Should Pay for Internet Service."

That is, unless there's a way for you to download Instagram's entire service as a package and install it on your own infrastructure (not likely), you aren't ever going to pay them for "software." If you pay them, it will be a subscription to their service.

I think the real culprit here is actually Google, who can (and do!) release all kinds of useful free services. They then actively support the misconception that all online services should be free – this helps them because consumers then make the error of assuming that this is reasonable; meanwhile, Google benefits as consumers turn a blind eye to their data mining, advertising, etc.

I suppose it would be fair to blame all the large cloud providers competing in the same space (Microsoft and Yahoo for example). However, Google was the first to try this and arguably the most successful.

rgbrenner2• 14 years ago

Google was not even close to being the first to give away services. Hotmail and Yahoo mail were around before Google even existed. And that's just the first two that came to mind.

sounds2• 14 years ago

That's not what I said, of course. Google doesn't just "give away services:"

They release all kinds of useful free services. They then actively support the misconception that all online services should be free – this helps them because consumers then make the error of assuming that this is reasonable; meanwhile, Google benefits as consumers turn a blind eye to their data mining, advertising, etc.

In other words, Google was the first to really push what could be done in free services. Sure, HTTP was a "free service" before Google ever existed – but that's not my point. Search engines existed before, but Google took a first step by placing the search results first – instead of the flashing banner ads.

bksenior2• 14 years ago

This make a wildly naive assumption that paying for a product somehow makes it less likely that they will monetize your likeness. The truth is large companies with any swath of investors are expected to grow, thats how money is made. This means that there will need to be constant new revenue streams added on.

TLDR: Paying for any app just delays the inevitable monetization of content as the company is forced to expand and create more revenue.

Steko• 14 years ago

Agreed with a caveat:

People could prefer services that have some sort of contractual agreement for perpetuity to never do anything creepy with your stuff. Those services would by definition have to have some sort of paid angle or make due with dumb ads. Now most people don't care but it's possible someone could, in DDG fashion, try and leverage the "don't be creepy" angle.

bksenior2• 14 years ago

Perpetuity is a funny word when it comes to the law. In hindsight site it always seems to be a synonym for convenient.

pbiggar2• 14 years ago

I'll bet instagram never thought of that! If only they had these guys coming in to tell them that they could charge for software. "Guys, if you charge just $5 a month - you'll have $300m a quarter!" Genius!

Great reporting Atlantic, I'm normally a fan, but this is quite poor.

saurik3• 14 years ago

This article's claim (even stated in the title) is not that Instagram should have charged, but that users should demand to pay. The article is not written for Instagram: it is written for users.

> Truly, the only way to get around the privacy problems inherent in advertising-supported social networks is to pay for services that we value. It's amazing what power we gain in becoming paying customers instead of the product being sold.

pbiggar2• 14 years ago

But then:

> Here's an alternative version of what Instagram could have done

zalew3• 14 years ago

> users should demand to pay

People have a hard time paying for parking space, yet some claim those same people should demand paying for the ability to upload a small file to the internet. I don't think anybody outside of the tech bubble treats such advice seriously.

AndrewKemendo• 14 years ago

Wasn't app.net largely using similar sounding arguments to reasonable effect? This isn't anything new.

graue5• 14 years ago

I think this is actually an argument for open protocols. If Google put this clause in the terms of service for Gmail, you could switch to Yahoo! Mail, or you could switch to Fastmail.fm, or whatever else. But when it's a proprietary social network, you can't switch (in practice), because all your friends and followees are on Instagram - not the other thing that you switch to.

When services interoperate using open, decentralized protocols, competitive pressure helps keep a lot of the ugly stuff out of their Terms of Service. We all win. But with Instagram, or Twitter, or Facebook, one company has a complete monopoly on a particular combination of (functionality + approximation of social graph). Competition is locked out, and only regulation can prevent the company from doing whatever they want.

X-Istence2• 14 years ago

No I couldn't switch, unfortunately my username is at gmail.com, I don't get to chose to change providers and keep that same address.

You can forward it you say, sure I can, but at that point Google still gets to use my information as it pleases.

lazerwalker• 14 years ago

That's an argument for custom domains: if your email address is [yourname]@[yourdomain].com, it's easy to switch from Google Apps to a different provider.

Finding a way to make that a viable option for non-techies is, sadly, an exercise left for the reader.

simula673• 14 years ago

Just to play devil's advocate, open protocols, standards etc are hard to arrive at when there are competing business interests [1][2].

Also centralized systems make for less complexity. For example, despite having a standard for almost all major programming languages like C,C++ et al, if you want to compile your program using multiple compilers you have to put in some hours.

[1]http://www.faqs.org/docs/artu/ch17s02.html

[2]http://en.wikipedia.org/wiki/Browser_wars

graue5• 14 years ago

This is true. Also, a dictatorship is much simpler than a democracy, and easier to bring about.

wting• 14 years ago

I think you mean control of your data, rather than open protocols. For example, you can still access your Gmail via IMAP.

It would be great if users could have a decentralized store of the private data, and merely gave websites or applications access to the data. Unfortunately this is a privacy geek's pipe dream, as data hosting costs and complexity would result in low adoption rates (e.g. setting up your own OAuth server).

On a side note, this is a another area where Google+ falls behind Facebook. Facebook is a platform for other apps. Sometimes this results in stuff like Zynga spam, but there are good use cases such as allowing Twitter / Instagram apps to post in more than one location. Vic Gundotra has stated in interviews that Google wants a single conversation thread rather than have it fractured across different platforms, but that strategy is an all or nothing approach and they're late to the social networking game.

graue5• 14 years ago

> ...users could have a decentralized store of the private data, and merely gave websites or applications access to the data.

I have to ask, are you familiar with Tent? (https://tent.io) You just described exactly what they are setting out to do (and on a basic, somewhat limited level, already do).

I agree the effort faces serious challenges, but as I hoped to illustrate with my email analogy, it doesn't require every user to set up their own server to benefit. You could choose between keeping your data with a hypothetical GTent, or Yahoo! Tent, or Fasttent.fm, whichever one had the best policies, ad-supported or, if you prefer, paid.

akr• 14 years ago

Sounds like something that should be possible with http://unhosted.org/

debacle• 14 years ago

All open protocols do is a create a race to create the cheapest product for service providers. If they were beneficial in any way for business, we would see far more of them.

fpgeek• 14 years ago

Why It Doesn't Matter If You Pay for Software, Sparrow Edition

http://mattgemmell.com/2012/07/21/entitlement-and-acquisitio...

crististm• 14 years ago

"You might call this the anti-free-software movement." - More like anti-free-services movement. There is nothing wrong with free software.

belorn• 14 years ago

>It's amazing what power we gain in becoming paying customers instead of the product being sold.

Since when did customer have any power what so ever in regard to products and services? DRM'infested products, streaming services that throw anti-piracy ads down consumers throat, and other similar things.

Paying for a product or service don't mean that a company will suddenly start acting ethical.

001sky• 14 years ago

This is basically like assigning a copyright to all your creative work for free to FB/Instagram to use for Marketing Purposes. Seems Non-trivia, if it is true.

TL;DR==Bait and Switch. Oldest game it town.

eloisant• 14 years ago

The sad truth is that even when you pay, the service will still monetize your profile and data.

Why You Should Want to Pay for Software, Instagram Edition

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