Instagram, the photo sharing social media network owned by Facebook Inc. (FB), may have been charged with copying rival Snap Inc.’s (SNAP) new features, but Chief Executive Kevin Systrom doesn’t see it that way, arguing it’s not stealing but is a form of competition.
In an interview with The Wall Street Journal the executive said that while Snap was first with the Stories format where photos and videos disappear after a period of time, it is Instagram that has been able to execute on its version of that feature. According to the paper, around 200 million people use Instagram Stories each day, which is more than the 166 million daily users on Snapchat. The success with it has even prompted Facebook to roll it out on Messenger, WhatsApp and Facebook itself.
“Stories is definitely similar to Snapchat. I think anyone would say that. The first time you see a product show up somewhere else it feels a lot like copying but imagine a world where the only car was the Ford Model T,” said the CEO and co-founder of the photo sharing social media network. “I’m really glad there are a lot of car companies producing different cars. Just because they have wheels and windows and AC doesn’t mean that you’re copying.”
Systrom pointed to DreamWorks, Pixar and Disney as another example, arguing they are all doing computer animated films but aren’t copying each other. “I would just judge [Stories] based on how many people use it actively, which is over 200 million every day. It clearly provides unique value to people that they’re not getting elsewhere,” he said.
Room for Two?
While Facebook has faced criticism that it’s stealing all of Snap’s more successful additions to its messaging app, its success with Instagram Stories has prompted some Wall Street watchers to raise their estimates on the social media network giant. Take Cowen analyst John Blackledge, who in early May pointed to the strength of Stories and its 200 million daily average users. He also pointed to WhatsApps, the Facebook-owned messaging app that has 175 million users for his price target increase. (See also: Facebook: Price Target Hikes on Back of Q1 Results.)
Meanwhile, Piper Jaffray said back in April that after surveying 860 Instagram users, it is convinced Snapchat isn’t encroaching on its users. “We believe that Instagram has the potential to shift user behavior over time and negatively impact Snapchat user engagement,” said analyst Samuel Kemp in a research report covered by Barron’s, noting revenue could hit $22 billion in 2021, up from $2 billion last year. Citing findings from the recent Piper Jaffray survey of teenagers, Kemp said users of Snap also use Instagram, leading him to surmise that if Instagram keeps enhancing its platform it can reduce Snapchat’s “uniqueness” and dent Snap’s user growth. Kemp has a neutral rating on Snap and an overweight rating on shares of Facebook.