Why You Should Want to Pay for Software, Instagram Edition

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.<p>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).<p>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.

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.<p>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.

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

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

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

"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.

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

Why It Doesn't Matter If You Pay for Software, Sparrow Edition<p><a href="http://mattgemmell.com/2012/07/21/entitlement-and-acquisition/" rel="nofollow">http://mattgemmell.com/2012/07/21/entitlement-and-acquisitio...</a>

&#62;It's amazing what power we gain in becoming paying customers instead of the product being sold.<p>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.<p>Paying for a product or service don't mean that a company will suddenly start acting ethical.

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

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

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