Two for One: Alamy, Fotolia Blunders

Posted on 2/23/2009 by Julia Dudnik Stern | Printable Version | Comments (0)

Last week, two leading stock-image companies have made announcements that sent their contributors into apoplectic fits: Alamy released its Commercial Collection. Fotolia cut contributor royalties. Both came as a surprise to the two agencies’ contributing photographers.

Alamy’s new Commercial Collection, announced on the agency’s contributor blog, aims to provide advertising and design customers with commercially “safe” images—those that have the requisite model and property releases. The announcement and an immediately following explanatory post gathered some 120 overwhelmingly negative contributor comments.

Most Alamy-represented photographers do not understand the need for segregating such content, since the existing search engine already includes options that return only the images with the appropriate releases. Contributors also object to not having been consulted regarding this decision and question the timing of this launch alongside Alamy’s opening of a U.S.-based sales office.

Chief among the objections, however, is the quality of the Commercial Collection. A number of images included at launch time did not, in fact, have the requisite releases. Contributors offer many examples, such as an image containing a labeled bottle of Louis Jadot wine offered as royalty-free.

Alamy’s head of content Alan Capel explains that launch content contained the entire portfolios of individual suppliers, whose work was only spot-checked. “As a result, you may find unsuitable images... The collection is evolving and we are refining the collection as we go,” Capel wrote on the Alamy blog. Why the company decided to launch the collection before fully verifying its content is unclear, but Capel said it was “for practical reasons.”

When Alamy announced its plans to pursue a larger share of the U.S. stock-image market, the company changed its commission structure to retain a larger share of total revenues. Last week, Fotolia made a similar move—without a prior announcement.

Fotolia contributors received an email that outlined a number of changes, including a contributor commission decrease by 3 percentage points, “in order to grow in terms of marketing, human resources and technology.” The email also pointed out that Fotolia remains the highest-paying microstock agency, with commissions of 30% to 61%, depending on a contributor’s level of exclusivity.

Though Fotolia positioned the commission change as a 3% decrease, many contributors stress that a change of 3 percentage points is more akin to a 5% to 10% decrease in actual revenues, depending on the contributor’s Fotolia ranking. For example, microstock photographer Lev Dolgachev told colleagues in the Yahoo! microstock group that for Fotolia’s Emerald contributors, going from a 41% commission to 38% equals a loss of over 7%.

Microstock photographers are incredibly displeased about the change, not only because of the revenue loss that it will bring, but also because they view it as yet another incident in a long string of changes they characterize as sneaky.

In late November, Fotolia quietly changed the number of images photographers needed to sell in order to move up its ranking scale and receive higher commissions. In most cases, the requirement was doubled: Moving from Silver to Gold previously required over 5,000 downloads versus the current over 10,000 benchmark. Attaining the Diamond level, which used to mean having over 500,000 downloads, now needs over 1 million. Contributors were not notified of this change.

In October, also without notice, Fotolia changed its affiliate program to increase the agency’s share of photographer-referred revenues. The company also deactivated a number of program participants; for example, Lee Torrens reported having referral income for 20% of photographers he referred to the agency. Fotolia said this was a computer error that incorrectly assigned members as referrals. Torrens and others are skeptical about this explanation.

At the same time as it announced the contributor royalty decrease, Fotolia revealed its plan to focus on exclusive contributors in the same fashion as segment leader iStockphoto (which continues to attract double the traffic of Fotolia and likely more than double its sales). Now, Fotolia is seeking photographer exclusivity and will no longer pay higher commissions for image-only exclusives.

Fotolia itself is doing quite well. The agency says it now has 1 million registered customers and 5 million images. It is signing up 3,000 new members a day and continues raising image prices.

Both Alamy and Fotolia remain significant industry players, generating large percentages of their contributors’ total revenues. Despite the negativity of contributor objections to the two agencies’ latest moves, the majority of their photographers admit that they are unlikely to discontinue these agency relationships. The notable difference is that in Alamy’s case, contributor objections center around the company’s execution of its latest idea, whereas the reaction of the Fotolia community demonstrates a much broader loss of trust and goodwill.

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


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