Alamy Contends Growth Amid Falling Prices

Posted on 9/19/2007 by Julia Dudnik Stern | Printable Version | Comments (0)

Alamy CEO James West has announced the agency's plans to launch a number of new products designed to broaden the agency's customer base and expand its pricing strategy. In a more surprising move, the privately held Alamy will also make its financial information public.

In a Monday announcement to contributors, West acknowledged the industry-wide trend of falling prices. He thinks this will continue, fueled by various factors, including the overabundance of imagery and the proliferation of microstock, as well as uncertain economic conditions, consolidation of customer markets, migration from print to Web and aggressive pricing strategies by stock-licensing agencies.

Despite this downward market trend, West said that Alamy prices have remained stable and its market share is growing. He credits the agency's strong position in the relatively stable secondary editorial market, which includes magazines, features sections of newspapers and books.

West will publicly share the details of Alamy's revenues early in the fourth quarter. Alamy has previously disclosed some financial information, such as average per-image income and other internal stats. Though West says the agency "ought to be sharing this information with our contributors to help them assess our overall performance and our prospects for the future." In contrast, Corbis, also privately held, recently decided to stop public disclosure of its financials.

New pricing strategies

Why would a company that reports growth, while others struggle, need to adjust its pricing? West says that new products and more competitive pricing models would help Alamy capitalize on new opportunities it currently cannot pursue. "This doesn't mean that we are planning to ax prices overnight or shift our entire sales strategy to a low payment model. Nor do we think there are no more opportunities for high-value sales in the commercial market," he added.

Yet many Alamy contributors took a negative view of the new pricing announcement. Bob Croxford of the Atmosphere Picture Library said that if Alamy were to test the waters of microstock, he would pull out. "With PhotoShelter announcing a $50 minimum price and a marketing budget way above Alamy's, it would be the height of foolishness to flirt with even lower prices," he noted on the agency's contributor blog.
Though a number of other contributors expressed similar concerns, an equally large number are optimistic. Many Alamy contributors recognize that current market conditions demand new approaches. Portuguese photographer José Elias says he is looking forward to Alamy's new products. "Personally, I don't see any problem in creating premium and affordable collections. Some images are too common to be priced at hundreds of dollars [and don't sell]. Others should be valued by their higher quality and originality."

First new product

Today, West unveiled the first in the promised series of new Alamy products: the Novel Use Scheme, which will allow a high volume of sales at low prices or other unusual ways of selling images. Participation is optional and will not interfere with existing sales and pricing; however, all images of photographers opting into the scheme are locked into it for one year.

In addition, the commissions structure for this new product is different from Alamy's standard 65% photographer return. The Novel Use Scheme will be a 50/50 split, because of the higher operating costs of such deals. According to West, they often take individual attention and technical effort or have hardware and bandwidth requirements.

While many photographers were cautiously optimistic about the general announcement of upcoming change, reactions to the Novel Use Scheme have been less positive. In particular, contributors are objecting to the vague and cryptic nature of West's announcement. San Francisco photographer Fabian Gonzales says, "I am very puzzled by this... not able to figure out what [novel use] would mean. As far as I can tell, the traditional license already covers pretty much everything, including point-of-sale products." Gonzales says he sees no reason to opt in, given that he would get a lesser share, has no idea how his images would be used and suspects his work would be devalued by mass reproduction.

West promises that an upcoming email to contributors will provide further details.

A photographer's agency

Any announcement, particularly one of lowering prices, is likely to meet with some resistance. In Alamy's case, it is important to note that even those expressing negative opinions about its plans still commend the agency on its openness.

Many contributors say it's not in character for Alamy to "do a Getty"- that is, to make a business decision that would affect its contributors without consulting them first. Others are grateful to work with an agency that allows opting in or out of programs or the agency as a whole, unlike the difficulties encountered by photographers trying to terminate relationships with larger industry players.

In a similar vein, West says that Alamy's new pricing strategy will be one that recognizes the industry's pricing trend alongside photographers' need to retain control over how images are sold. "Our key concern at this stage is not to do anything that cannibalizes our contributors' existing revenue streams," he adds.

Although pricing and products have yet to be finalized, West says this week's announcements were intended to inform contributors about Alamy's general direction, "so that they can start to form their own opinions as to whether they wish to try some of these new markets."

Copyright © 2007 Julia Dudnik Stern. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz


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