Why You Should Want to Pay for Software, Instagram Edition

Alexis Madrigal writes why we should want to pay for software:

“Under these conditions, companies have to sell themselves because they do not have a sustainable business. And when they’re sold, they either A) get shut down or B) become part of an advertising machine, like Facebook’s.

Truly, the only way to get around the privacy problems inherent in advertising-supported social networks is to pay for services that we value. It’s amazing what power we gain in becoming paying customers instead of the product being sold.

Most of the time people don’t stop to notice what’s going on with the free services they use. That is, until something changes, like Terms of Service, and then it gets focus. Facebook, Twitter, Instagram, Pinterest…all of these sites must make money somehow. And because most of the sites don’t provide business value they must aggregate what they do have, attention, in such a way to make money.

BUT…Madrigal does some back-of-the-napkin calculations to point out that even if only 20% of users paid $5/mo for Instagram, the economics start looking extremely good extremely quickly. I wish there was more experimentation like that. Wouldn’t it be something if Flickr, with their $25/year plan, ends up as one of the most sustainable photo-sharing sites around?

Published: December 21st, 2012

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