After reading my story on
why usage fees will continue to decline Larry Minden wrote:
“Is there no one among the thousands upon thousands represented by Alamy who will stand up to those idiots and tell them a 50-year license is unneeded and an absurd bastardization of an RM license?
“Do photographers themselves not understand that they themselves are to be blame if they do not do so much as question the policies of their agents?”
I’ve been asking James West, CEO of Alamy, for more than three months for an explanation, but he seems to be too busy to answer my requests. Others at Alamy have told Cheryl DiFrank, CEO of Stock Connection, an agency with a large collection of images on Alamy, "This is what we have to do to be competitive."
Thus, I can only speculate at what is happening. My guess is that in their effort to raise their position as a preferred provider Alamy felt it was necessary to offer publishers a better deal than Getty was offering. I don't know what Getty's price per image use was, but let's guess at $90. If Getty is offering a 20-year license then Alamy needs to do them one better. Alamy figures that in order to go to first place they must either go to $85 per image used, or offer a longer license for the same $90 price. Maybe their thinking was that images purchased today probably won’t be used for more than 20 years anyway so maybe extending the license to 50 years isn’t really giving away that much more. To their way of thinking offering a 50-year license (effectively unlimited) is better than lowering the price even further.
Whatever their reasoning it seems it may have worked based on
their report that they grew sales in the U.S. (I assume that means revenue) by 30% in the last year. Of course, a 30% growth in the U.S. probably only means 3% or 4% overall since their U.S. sales were such a small percent of their total business before they opened their U.S. office in 2010.
Now, if I'm right, Getty will want to get back on top. So they will either lower their price by a few dollars or offer 100-year licenses. At some point the publishers will say, "The licenses are more than long enough. If you want to improve your position then you have to give us a better price."
Minden makes the point that if a few contributors would complain and refuse to allow their images to be licensed to textbook publishers for 50-years it might put a stop to this practice. However, if even half of Alamy’s contributors refused to allow their images to be licensed for textbook use that would still leave Alamy with 12 million images to offer their customers.
Those who refuse to let Alamy sell for textbook use, or pulled their images from the site, would hope that the publishers would come to them directly and purchase images from them on more reasonable terms. However, I doubt that would happen very often.
Researchers for the publishers might like to use the images of certain photographers or agencies, and they might have built good relationships with these creative sources. But these researchers have been instructed by the “bean counters” at the company to start every search by going to the cheapest supplier on the “preferred provider” list and working through all the preferred providers before going to any outside source. In most cases, if they use an image that is not from a preferred provider, they must justify why that is the only satisfactory image for the use.
In the long run I think there will be very few agencies of individual contributors that will actually benefit financially from withholding their images from preferred provider networks. Photographers may feel good about standing for their principles, but such a stance is unlikely to earn them more money.
Unfortunately, as long as there are at least two sources of images I believe publishers will continue to demand more and more and play one off against the other.
I am reminded of a statement made by Jonathan Klein at a PACA annual meeting in the mid ‘90s shortly after Getty Images entered this industry. He said, “The customer is always right.” Taken to extreme, that means that whatever the customer wants you have to give them, even if it eventually drives you out of business.