Instagram Makes Its First Acquisition—Video Sharing App ‘Luma’

Instagram has bought Luma, a developer of an app for video recording, stabilization, and sharing. The purchase is the popular photo-sharing site’s first. The deal was obviously part of its strategy to further expand its recently rolled out services to facilitate posting of videos on its platform.

Luma’s video sharing technology would soon be integrated into Instagram’s own. Aside from video stabilization, the non-disruptive video filtering technology and the suite of video-editing tools owned by Luma would soon be shared to Instagram’s current 130 million users. Those features would include sliders for adjusting contrast, saturation, brightness, as well as exposure of users’ videos to be posted.

Technology and talent

Through the transaction, Instagram has acquired not just Luma’s technology but also its talent. This makes it different from the rest of recent ‘acqui-hires’ (acquisitions aimed at absorbing a company’s talents) in Silicon Valley. In turn, Luma’s app would be shut down soon as its features would eventually be adopted and transferred into Instagram. Consequently, Luma has pulled out its iOS app from Apple Inc’s App Store. Its existing users would continue using the service until the end of this year.

According to observers, Instagram has to adopt a really good video editing technology if it wants to become an effective and popular video-sharing app. This is to give its users more capabilities and greater flexibility when producing, editing, and posting videos. This is how the Luma deal became a perfect fit. However, there is still a challenge to make Luma’s tools available to Instagram users without transforming itself into a non-liner video editing program.

Differentiation with Vine

The purchase of Luma highlights the continuously increasing differentiation between Instagram and rival Vine, in terms of product and strategy. Vine, an app owned by Twitter, remains simple and spontaneous. It quickly posts six-second videos without the need to select any cover frame. There is also a requirement to shoot videos completely within the app, facilitating an art form in itself.

In contrast, Instagram, owned by Facebook, prioritizes power and flexibility. Users could add filters to 15-second videos. Stabilization could be enabled. However, speed is sacrificed because there is a need to select cover frames to make each video look better beside photographs in the Instagram feed. Users could upload previously recorded videos. This may possibly allow posting of more professional clips that could potentially entice more advertisers. Thus, Instagram is not just an art form; it is also an effective video sharing medium.