Instagram Loses Users Over TOS Snafu
December 30, 2012

Why Did Instagram Lose 25% Of Their Daily Users This Past Week?

redOrbit Staff & Wire Reports — Your Universe Online

In the week after the photo-sharing service announced changes to their terms of service that had some users worried their pictures could be used for advertising purposes without compensation, the number of people using Instagram on a daily basis has reportedly dropped by nearly one-fourth.

Reuters reported Friday the service, which was purchased earlier this year by Facebook for the cool sum of $715 million, saw the number of people actively using the service during a day fall to 12.4 million on December 28. During the previous week, the number of users peaked at 16.4 million, according to data compiled by analytics firm AppData.

The New York Post attributed the loss of the four million daily users to the new regulations, which Reuters notes have since been withdrawn.

Garett Sloane, a reporter with the newspaper, said the terms of service announcement had "sparked threats of a mass exodus, with celebrities including Kim Kardashian and Justin Bieber expressing outrage," and that despite Instagram's decision to revert to their previous terms of service, "the damage“¦ was done."

AppData themselves were quoted as telling Sloane they were "pretty sure the decline in Instagram users was due to the terms of service announcement." Others weren't as convinced.

Dino Grandoni of the Huffington Post reported "observers at many prominent tech blogs“¦ are pushing back against claims" the declining number of users reported by AppData "is due to an exodus of users afraid that their photos will now be sold off." He also noted the firm's "analysis is incomplete because it includes only Instagram members that have connected their accounts to Facebook."

Likewise, TechCrunch's Ingrid Lunden said other photo apps similar to Instagram have also seen daily active user fluctuations over the past week, and that the recent decision to remove preview "cards" from Twitter may also have played a role in the statistics.

"In short, there are a number of reasons for a decline in daily active users at Instagram (some alarming, some seasonal). Yes, it may be that people are voting with their fingers, and if that´s the case it will likely be something that Facebook and Instagram will have to consider as they think of how to make money with the app. But to directly relate it to an already overblown situation smells off," Lunden added.

According to The Verge, Instagram called the data "inaccurate" and said they "continue to see strong and steady growth in both registered and active users" of the service.

In fact, even AppData themselves addressed the controversial New York Post report, explaining the statement made to the newspaper was "not approved for citation by AppData" and telling the Wall Street Journal that while the changes to the terms of service "spurred a lot of negative media attention and complaints from users, the decline in Facebook-connected daily active users began closer to Christmas, not immediately after the proposed policy changes."

"The drop between Dec. 24 and 25 seems likely to be related to the holiday, during which time people are traveling and otherwise have different routines than usual," they added. "A number of other apps saw similar trends, including Skype, Pandora, Pinterest and Yelp."