The recent hoopla resulting from the decision by Instagram use any user content for ads reminded me of some of the lessons cited in the book by Don Peppers and Martha Rogers, Ph. D – Extreme Trust.
The book cites the example of Netflix when it split it’s service into two separate businesses as an example of what not to do. Netflix saw a business trend and for it’s operational efficiency thought it’s in it’s best interest to have two separate businesses. In the end Netflix did back track on some of the negative impact to customers of the decision (two different websites for example) but still made it two different services instead of one for people to deal with. Whatever your opinion of the decision, the market has not been kind to Netflix since the original decision. It was a series of decisions that set the mood and eroded trust in the intent Netflix had. There was the price increase in July 2001 and then the split of DVD and streaming services with Qwikster. None of this has helped NFLX, just look at the cliff in the stock price below from after July 2011.
Of late Instagram has been the subject of much criticism with it’s decision (since somewhat reversed) to sell it’s customers photographs. The change to the terms that created the uproar have been quoted by many media outlets, included here for your reference:
“You hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licenseable, worldwide license to use the content that you post on or through the service … You agree that a business or other entity may pay us to display your username, likeness, photos, and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.”
Instagram has since changed it’s mind and Kevin Systrom (co-founder, Instagram) has posted a blog titled “Thank you, and we’re listening” that outlines the intent of the change and an update to the terms to clarify advertising, ownership and privacy concerns people have raised. So things are better but what do you think and how do you feel? That is the real question.