Alamy's sales for the second quarter of 2009 continued their downward trends in each sales territory, but were flat when converted to dollars based on exchange rate fluctuations.
Sales in U.S. dollars (mostly in the U.S.) were down 12% compared to the previous quarter, sales in Euros were down 6% and sales in British Pounds were down 5%. But when the Pounds and Euros are converted to Dollars based on the March 31st and June 30th exchange rates the total revenue generated is almost exactly the same. This clearly demonstrates the impact foreign exchange rates can have on a photographer’s overall income. (See charts below.)
| Revenue Information |
Q1 2009 |
Q2 2009 |
Percent Decline |
| Revenue USD (000’s) |
$2,351 |
$2,070 |
12% |
| Revenue Euro (000’s) |
565 |
530 |
6% |
| Revenue GBP (000’s) |
1,887 |
1,795 |
5% |
In the following chart the revenue for 2008 and 2009 has been converted to U.S. dollars.
| |
Q1 2008 |
Q2 2008 |
Q3 2008 |
Q4 2008 |
Q1 2009 |
Q2 2009 |
| US Dollars |
$2,626 |
$2,937 |
$2,750 |
$2,390 |
$2,351 |
$2,070 |
| Euros |
$1,162 |
$1,225 |
$1,035 |
$1,017 |
$746 |
$745 |
| English Pounds |
$4,146 |
$4,368 |
$4,433 |
$3,091 |
$2,682 |
$2,965 |
| |
|
|
|
|
|
|
| Dollar Totals |
$7,934 |
$8,530 |
$8,218 |
$6,498 |
$5,779 |
$5,780 |
The dramatic decline in U.S. dollar sales is difficult to explain given that Alamy opened a U.S. office at the beginning of 2009 with the expectation that it would increase North American sales.
CEO James West said, “The decline in U.S. sales is mainly due to a handful of large customers putting the brakes on expenditure this year. A significant portion of our revenues in the US comes from this small but highly valuable group of customers. Therefore, changes in their buying patterns have a big impact on our quarterly results for this region.
“For this reason we chose to concentrate some of our sales efforts on maintaining relationships and, where appropriate, renegotiating our terms with these customers for a while. This meant that our ability to focus exclusively on adding new customers has been temporarily thwarted by the need to use our US sales force to maintain and develop existing accounts. This strategy has been working well although it won't be reflected in our numbers for a while.
“We are now returning our focus towards acquiring new business and we are hiring more staff as part of this process. The US, however, is a very big market and we have only just started to get going.”
Alamy’s peak sales were in Q2 2008. Prior to that time the company had never had a down quarter in its history. Q2 2009 sales were down 32% from the year earlier figures, but the fact that Q2 was level with Q1 (in dollar terms) may be an indication that the industry is coming out of its economic troubles.
The average price of a rights managed image remained the same as the last quarter at $105 but the average price of a royalty free image fell again and is now at $162. The average price of a royalty free image in Q2 2008 was $242 and thus has dropped 33% since that time. The average price for a rights managed image licensed for editorial use was $94. In the past year the average price of a rights managed image licensed for commercial use has fallen 30% while there has only been a 17% drop in the price of rights managed images licensed for editorial use.
Alamy has pointed out, “that the average pricing information is shown in U.S. dollars and that the decline has been exaggerated by the weakening of the UK pound against the U.S. dollar between Q2 2008 and Q1 2009.”
58% of revenue was generated from images supplied directly to Alamy by photographers and 42% came from images supplied by agencies. The photographer share has begun to increase again after being flat for the last three quarters.