Instagram Loses 25 Percent Of Users Over Christmas: Are The New Terms Of Use To Blame?

By Khurram Aziz email: | Dec 28, 2012 08:42 PM EST

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New data shows that Instagram lost around a quarter of its users over the Christmas period with some reports suggesting that this was due to its controversial updated terms of use.

However, some analysts have countered that the decline happened a long time after the Dec.17 debacle and the two incidents are not correlated.

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The story was first reported on the New York Post with figures provided by AppData showing that the photo-sharing app only had 12.4 million active users over Christmas compared to 16.4 million at its peak.

"[We are] pretty sure the decline in Instagram users was due to the terms of service announcement," AppData told the news site.

Instagram, which was acquired by Facebook in April for $1 billion, introduced new terms of use over a week ago to a storm of protest. Users felt that the service would begin selling their photographs to advertisers, with no compensation to them, prompting clarification from CEO Kevin Systrom and then eventually a complete retraction of the offending terms.

However, the backlash resulted in a host of celebrities threatening to delete their accounts, including Kim Kardashian - Instagram's most followed user.

AppData has not indicated how many of the app's users have actually shut down their account, but only that activity on the social network plummeted in recent days. Zachary Seward, of the Business Insider, contends that linking the terms of use controversy with the decline in activity is misleading.

"The story cites AppData, which tracks usage of Facebook applications like FarmVille," said Seward. "Some users have connected their Instagram and Facebook accounts in a way that would show up in AppData's metrics, but most have not. So when the Post says, "Instagram, which peaked at 16.4 million active daily users the week it rolled out its policy change, had fallen to 12.4 million as of yesterday," it's only talking about a subset of Instagram users."

More to the point, the drop in active daily users of Instagram's application on Facebook occurred between Dec. 23 and Dec. 25, according to AppData - a full week after it released its new terms of use on Dec. 17, but AppData doesn't show any significant decline in usage until Christmas.

It could be that users were just more interested in their families and turkeys over that time, rather than their smartphones.

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