MediaFile

Instagram surely didn’t expect to stir up a hornet’s nest with changes to its terms of service announced two days ago. But it was met with an Internet flash mob: high-profile tech writers who had adored the service abandoning it and thousands of angry words from the rest of us about what Instagram’s pictures are really worth.

The issue was joined with these 115 words:

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. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.

The next day, Instagram had a bit more to say:

Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.

It’s a fast-moving story — something may have already changed by the time you read this. The changes don’t take effect until Jan. 16, and they are not retroactive: Everything you share on Instagram until that date is exempt from the new policy. But the terms as originally described — and not yet retracted — were pretty expansive. They spoke of revenue and ads that may not look like ads. You don’t have to be a rocket scientist to see what that might allow the company to do. Saying you don’t “intend” to do anything means nothing. It is what politicians say when they intend to do the opposite but can’t yet go public.

Instagram deserves to make money. It should be lauded for thinking outside the box. And nobody has figured out the perfect way to subsidize mobile sharing services. But like Netflix did with its disastrous Qwikster idea, Instagram needs to reverse course quickly and think about what it has done.

I didn’t get a chance to look at these numbers on Internet advertising that PricewaterhouseCoopers and the Interactive Advertising Bureau released on Monday, thanks to being on a late shift and having plenty of news to shovel through thanks to Conde Nast. I glanced at them on Tuesday, however, and here’s what I seized on in the press release:

U.S. Internet advertising revenue in the first half of the year was $10.9 billion, down 5.3 percent from last year’s first half. Search and display-related advertising continue to represent the largest percentages of overall interactive advertising spend. Search revenues amounted to more than $5.1 billion for the first six months of 2009, up slightly from that same period in 2008. Display-related advertising—which includes display ads, rich media, digital video and sponsorship—totaled nearly $3.8 billion in the first six months of 2009, showing a relatively modest 1.1 percent decline from the same period in 2008. Digital video continues to experience robust growth with a 38 percent increase from the first half of 2008. And this quote: “While the overall advertising market has continued to be impacted by current economic conditions, marketers are allocating more of their dollars to digital media for its accountability and because consumers are spending more of their leisure time online,” said David Silverman, PwC Assurance partner.

The video section is what caught my attention. I’m one of those people who is perpetually fascinated by the faith that people put in Internet video. Newspaper websites want to do more of it, and everyone else seems to be interested too. The idea, they say, is that video is an ever-more popular way to give people news, ads and what-have-you in a format that modern audiences want.

Maybe I’m antediluvian because I’m 36 years old, but it seems to me that pursuing video just so you can say you’re modern doesn’t seem like it’s going to meet the tastes of most of the Internet audience. Video can be distracting and time-consuming. Yet, more ad dollars are going to it. How popular is video online really? I mean, when it comes to news and ads. Am I completely wrong about this, or is video going to remain a small part of the ad revenue pie?