Instagram unleashes a thousand words

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.

The end of the story…

……is the cash cow for Chinese company Shanda Literature Ltd, a
subsidiary of Shanda Interactive Entertainment.

The company’s business model is simple: read the first half
of a book online for free, and if you want to know the rest
(which usually is the case if you have read that far) you need
to pay for it. Revenues are split with the stories’ authors.

In China, this proves to be successful. According to Shanda
Literature CEO Hou Xiaoqing, the company now has cash reserves
of $1.8 billion, with 800,000 authors creating up to 80,000 new
pages of content per day, he said at the Frankfurt Book Fair.

Cellphone touch screens to bring drawing messages?

The traditional art of drawing could see a renaissance helped by the boom in touch-screen mobile phones following the launch of Apple’s iPhone in 2007, says British artist Derrick Welsh.

“The touch has tipped, and drawing messaging is where touch leads,” said Welsh.

It could also create the next money-spinner for mobile operators, for whom text messages are still the key data revenue generator in 2009.

Android or oblivion for Motorola

For the last two years, investors have been calling for Motorola to bring out some decent new phones. The calls turned to pleas on Tuesday after its bleak results and a weak outlook.

Analysts are calling Motorola’s promise to introduce advanced devices in time for the holiday season, based on Google’s Android operating system, as the company’s last chance. In a research report entitled “Last Hurrah” Nomura analyst Richard Windsor put it bluntly:

I think if Android fails to deliver the needed revenue and profit recovery, then the focus will be oriented on managing the business for oblivion.

Walking around with the Financial Times

Having a copy of the Financial Times poking out of your valise is one way of telling the world that you are a sophisticated business type. Another way is to show people the new FT mobile service on your BlackBerry.

Here’s the news from the press release:

The Financial Times today announces the launch of a new website optimised for mobile devices available at The site is consistent with the new design unveiled in November 2008 and follows the news that has broken the one million registered user barrier for the first time.

The idea is to loop a younger generation into the FT, particularly young people who think that any newspaper showing up on any part of their person is like driving a chariot to work in the morning rush hour.

Reliance ADA targets all screens

reliance-anil-ambani.jpgEven before a deal to bankroll Steven Spielberg and David Geffen’s new studio has closed, India’s Reliance ADA Group is now on the hunt for U.S. mobile content publishers including game makers, according to the Wall Street Journal.

“The thought is to build a distribution model across the world,” Rajesh Sawhney, president of Reliance Entertainment, a unit of Reliance ADA, told the Journal. “For the content we’re acquiring now, we want to exploit it globally.”

Reliance hired Silicon Valley consultants VSC Consulting to scout out targets. The Mumbai-based conglomerate is also seeking to license content from big producers. This all comes on the heels of signing deals with eight Hollywood production house run by the A-listers George Clooney, Tom Hanks and Brad Pitt.

Ad spending outlook: some Good, mostly Bad, may be Ugly

DollarsThe good news on ad spending ain’t so good. According to ZenithOptimedia, spending on advertising in North America and Western Europe is expected to grow by 3.8 percent this year. But that is lower than an earlier forecast of 4.4 percent, as the credit crunch saps confidence.

This comes after Carat, the media network owned by UK group Aegis, earlier this month cut its own forecast for growth in global ad spending in 2008 to 6 percent from 6.2 percent.

An even more grim reality: Ad agencies are prepping for a recession.

The silver lining is online, of course, but it may not last. Zenith sees U.S. online ad spending growing 23.4 percent this year to $47.5 billion, an upgrade from the 19 percent forecast in December, amid the continued shift from traditional media to interactive. But it downgraded its 2009 forecast for online to 15.8 percent growth.