More Agencies to Cut Supplier Commissions?

Posted on 1/8/2009 by Julia Dudnik Stern | Printable Version | Comments (1)

Many stock photographers expressed concern that the recent changes in the commission structures of Alamy and Corbis were the first signs of an industry trend. Such predictions may have been justified.

Costa Mesa-based PhotoEdit, a boutique rights-managed stock agency specializing in multicultural imagery, just released a new buyer tool: a comprehensive list of 361 ethnic groups, images of which are available in its database. Ranging from the mainstream to the obscure—from Afghanis to the Haida Native Americans of Alaska—the list is designed to assist researchers seeking images of people, artifacts and traditions.

But the news making today’s trade headlines is of a different nature. PhotoEdit just told its contributing photographers that it is cutting their commissions by 10 percentage points, from 50% to 40%. In an email shared with Photo District News by one contributor, operations manager Raquel Ramirez gave photographers until mid-March to decide whether or not to accept the new commission structure, which goes into effect in early April. The work of photographers who decline the new contract will be removed from the agency’s database.

The announcement places PhotoEdit in the unenviable position of being the first specialist to follow its larger generalist colleagues. Alamy, whose 5-percentage-point photographer commission decrease for all license types goes into effect on Jan. 10, attributed the move to its goal of bolstering U.S. revenues by establishing a local presence. Corbis, which expects the stock-licensing market to decline by $100 million between 2007 and 2011, announced its plan to lower commissions for rights-managed images to roughly 40% last October.

Such decisions will undoubtedly help agencies cope with tough economic conditions. From the photographers’ perspective, however, the commission cuts simply pass the larger problem of diminishing traditional revenues down the food chain.

Corbis executives say they see the total revenues of its photographers increasing as the company gains market share. Yet the company has never been profitable and now, as the global recession deepens and Getty Images absorbs Jupiterimages and secures its market-leading status, stock shooters are increasingly skeptical about the feasibility of Corbis’ plans.

Photographer perceptions of Alamy are more positive. Despite the recent slowdown in revenue growth, the company has remained financially healthy as its competitors suffered major losses to microstock rivals. While there are those who resent what they see as passing down the cost of expansion to suppliers, even they acknowledge the potential of the U.K.-based company’s short-term plan. Yet Alamy photographers also have to contend with a broader industry issue that is exacerbated by Alamy’s business model: oversupply. Though some Alamy photographers do quite well as a function of the agency’s proprietary ranking system and type of imagery they produce, each individual photographer’s earnings remain inversely proportionate to the company’s ever-increasing inventory and number of contributors.

Still, the principle of increasing market share and, subsequently, the earnings of contributing photographers is at least theoretically sound in the cases of Alamy and Corbis. However, for small agencies like PhotoEdit, a cut in commissions almost certainly means an irreversible loss of revenue for contributing photographers.

Perhaps most significantly, the decisions of these three agencies may mark the beginning of a decline in traditional photographer revenues for the one licensing type that has remained relatively stable: rights-managed imagery. This would make it even more difficult to rely on stock photography as the sole source of income.

Copyright © 2009 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


  • Bill Brooks Posted Jan 8, 2009
    It seems that 40% is the industry standard. That makes the Alamy 60% on worldwide sales of both RF and RM look much better. If Alamy can boost sales through their new NY sales office, then the Alamy photographer offer will become more competitive, in spite of the 14 million images on the Alamy site.

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