With the news that Instagram’s new terms-of-service appears to allow them to sell users’ photos to any third party without restrictions, I do have to wonder if there’s a viable business model for social networking other than free access in return for selling your personal data to advertisers.
Paid subscription websites have never really got off the ground. It seems people are quite happy to shell out significant amounts of money on laptops, tablets and mobile devices, yet the market is resistant to paying for online services, which can’t compete with “free” (even though you end up paying far more than you realise in other ways).
It will be interesting to see what happens to app.net, which is an ad-free, subscription-based social network. Will it break out beyond a small niche of technophiles, or will it only ever be used by small numbers of enthusiasts?
I can see a “freemium” model working; a basic “free” model supported by advertising, with a paid subscription option for power users that banishes the ads and adds both more features and gives users more control over their personal data. As far as I know, nobody does this.
We shall have to see what sort of backlash Instagram’s announcement generates. If they end up losing a significant proportion of their user base, maybe the next generation of social media startups will explore other models?