Why Instagram wants to rule video; Instagram + video = Less than Instagram

June 23, 2013 Leave a comment

Why Instagram wants to rule video

By JP Mangalindan, Writer June 20, 2013: 2:54 PM ET

The popular photo-sharing mobile app now lets users capture video and apply filters.

FORTUNE — Instagram isn’t content with dominating the photo sharing space. At Facebook’s (FB) Menlo Park, Calif. headquarters this week, CEO and co-founder Kevin Systrom announced the ability to capture video in an iOS and Android update available for download.The new video capability lets users shoot clips up to 15 seconds long, apply 13 new video filters like “Helena,” “Dogpatch,” or “Ashby,” and use a video stabilization feature called “Cinema.”

“Instagram is no single thing,” said Systrom of the move. “It’s a collection.” Indeed, when Systrom and co-founder Mike Krieger developed Instagram nearly two-and-a-half years ago, they originally wanted the app to capture both stills and video. But they shelved the latter, arguing smartphones then weren’t capable enough.

Systrom also shared some new numbers. Instagram now has 130 million monthly active users worldwide — up from 100 million this past February — who have shared 16 billion photos to date and “like” images 1 billion times every day.

Taking video is as simple as snapping photos. Once the app update is installed, tap the camera icon at the bottom right. Select the new video camera icon, then tap and hold the record button. Users can capture between three and 15 seconds of video in one clip, opting to stop and start recording by lifting their finger. (The new Cinema stabilization feature is turned on by default, though users can turn it off.) Afterwards, they can apply one of 13 video filters and choose any frame from the video — or capture a new photo — to serve as the thumbnail.

Videos appear in Instagram’s mobile feeds, as well as the desktop site. And like Instagram photos, videos can also be directly viewed and played back on Facebook’s News Feed and Timeline.

The company’s expansion into video had been speculated about for some time now given the increasing popularity of Vine, the mobile video startup acquired by Twitter, which claimed 13 million users earlier this month. Vine’s busiest users are reportedly tweeting over 14 videosa day. With today’s announcement, the number of Instagram video users could quickly surpass Vine’s given the photo-sharing company’s already large membership. Video may also prove a valuable revenue stream down the line.

Systrom also emphasized Instagram’s 15 seconds of video capture compared with Vine’s 6-second maximum, a decision made after testing different time lengths. Explained Systrom: “It’s an artistic choice.”

 

Instagram + video = Less than Instagram

By Dan Primack June 20, 2013: 4:16 PM ET

Instagram video fails to excite Facebook investors.

FORTUNE — Facebook today rolled out its Instagram video product, 14 months after first acquiring the mobile photo-sharing app.

Investors reacted kind of like you’d expect them to act when you hype a “mystery” product launch that: (a) Leaks early, and (b) Is basically a knock-off of what Twitter was already doing with Vine.

Facebook (FB) shares finished the day down 1.64%, to close at $23.91 per share.

That means Facebook lost $968 million in market cap today. Obviously we can’t attribute all of that to the Instagram video launch — the broader markets took a tumble too — and Facebook obviously believes there is long-term value here.

But if you play out the simple top-line, Facebook lost around 26% more value today than it spent on Instagram in the first place.

Or, put another way, Facebook spent money to lose money. At least for now…

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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