I don't think content volume is an issue if the right channel can be found, but you're right that the Instagram comparison is not the correct order of magnitude.
disclaimer: I have no relation to 16color, apart from enjoying it over a decade ago, and just discovered one of my animations was actually on their DVD.
The site is still up, and they claim 40,000 movies were created between 1999 and 2004 (timeline from the DVD : http://www.amazon.com/Best-16-Color-DVD/dp/B000BD98AO/)
I don't think content volume is an issue if the right channel can be found, but you're right that the Instagram comparison is not the correct order of magnitude.
disclaimer: I have no relation to 16color, apart from enjoying it over a decade ago, and just discovered one of my animations was actually on their DVD.