How times can change because I wrote a post back in October 2008 about how great this service is for twitter - Twitpic – A great add-on for twitter
TwitPic changes Terms of Service again
Earlier it come to my attention due to a retweet 6 hours ago that not everything is what it used to be. (Thank you @attaboy)
Were you aware that, as of May 4th, by using TwitPic you give them the rights to sell your photos? http://twitpic.com/terms.do I'm out.
Checking back on the internet archive you can see that the terms of service for TwitPic was something very simple and to the point. In fact the whole terms of service page clocked 111 words and the most important bit concerning Copyright was only 9 words.
All images uploaded are copyright © their respective owners
Well today the terms of service page has a whopping 1,555 words and the Copyright section hits an amazing 940 words and the part I have a problem with is below
You retain all ownership rights to Content uploaded to Twitpic. However, by submitting Content to Twitpic, you hereby grant Twitpic a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the Content in connection with the Service and Twitpic's (and its successors' and affiliates') business, including without limitation for promoting and redistributing part or all of the Service (and derivative works thereof) in any media formats and through any media channels.
Just to make it clear the new terms of service does make it clear that no third party can use my TwitPic pictures without TwitPic's consent. Yes not my consent, but TwitPic's. The problem I have is the section above which state that TwitPic can "transfer license" to their "affiliate" sites without my permission.

TwitPic have obviously been getting some stick about the terms of service update because they even come out and wrote a post Your content, your copyrights stating the following.

To clarify our ToS regarding ownership, you the user retain all copyrights to your photos and videos, it’s your content. Our terms state by uploading content to Twitpic you allow us to distribute that content on twitpic.com and our affiliated partners. This is standard among most user-generated content sites (including Twitter). If you delete a photo or video from Twitpic, that content is no longer viewable.

Conclusion

I have to confess that whilst writing this post it does come across that most (if not all) of the Twitter photo-sharing services have some form of "transferable license" clause in the terms of service which gives me the impression that the best route to go is self-hosting your images. I will be writing a post to export/remove all your images from TwitPic.

Update

Well it looks like I was right. According to the British Journal of Photography it looks like TwitPic have signed a controversial deal with the WENN company. This is quite amusing as the email reply I got from TwitPic support today had the following statement in regarding the above paragraph and affiliates.
Regarding the second paragraph you quoted: we are not selling your photos to anyone, and we will not sell your photos to anyone. The legal language in the paragraph is almost verbatim what you would find in the Terms for any other large media/photo sharing site (I encourage you to look at other's Terms--I won't name them, but you probably name 10 off the top of your head.)
I have replied back with news that they have signed this deal and do they still stand by what they said, I have a funny feeling my response will be a lot slower than the previous one.

Update 2

Well I have just received an update to my mail.
To put it in the clearest non-legal words (since I'm not a lawyer--just a lowly customer service rep) We are selling images from about 150 users--all of them big name celebrities. You're not on the list. We will not be selling your images or trying to make a profit off of you (beyond placing ads on the photo pages on Twitpic.)

TwitPic Exporter

I have now released the TwitPic Exporter by all means check it out if you want to remove your images from TwitPic.