After I published “
50 Year Licensed For Rights Managed” James West responded with the following:
Here are some clarification points for your article about Alamy and 50 year licenses:
- We have thousands of customers across all sectors in the market.
- We have 1 customer - I repeat - 1 customer - whose license duration, due to a limitation with our hugely complex (and outdated, but that's a story for another time) price calculator, has been reported as 50 years.
- The 50 year term was removed from the price calculator several months ago as it was not representative of the contractual term for this particular customer. This contract is also in the process of being renegotiated to a significantly lower time period.
- Our recently reported growth is down to excellent results in the commercial sector in the US and the resussitation of the UK newspaper and magazine market, all thanks to our amazing sales team.
- You are right that I am busy. I'm busy trying to deliver long term value for our contributors by continuously adapting our business to this incredibly fast moving and competitive market. That's why Alamy is still in business and paying out the largest royalty share to contributors in the history of this industry.
Your analsysis of this market avoids what I view as a key issue for photographers - how sustainable are the business models of the organisations they're entrusting intellectual property to?
Alamy has zero debt, is profitable, and expanding. All this in the worst economic conditions in living memory.
James
Editors Note:
James raises an interesting issue about sustainability. Certainly, a lot of smaller agencies and individual photographers are going out of business because they can not earn enough from their images, or those they represent, to cover their overhead and allow them to create new work.
Many of the more successful distributors achieve sustainability by paying image creators an ever smaller share of the gross revenue they receive. That is not the case with Alamy as they pay a 60% royalty to the agencies and image creators they represent.
However, sustainability of the distributor alone is not the issue. If we are going to focus on sustainability it should be on the sustainability of the entire supply chain. Unfortunately, given the way the stock photo industry is currently structured the people establishing the prices for image use are not required to take into account the cost of producing the product. All the distributors must do to regularly return a profit for their operation – and be sustainable – is earn enough from their share of gross sales to cover their own costs and the level of profit they feel is necessary.
One of the reasons distributors can ignore the cost of production is that there has been, and looks like there will continue to be, a steady flow of new imagery to their sites. This tells the distributor that on the whole suppliers are happy with the revenue they receive, and that they will continue to supply. The fact that some suppliers complain and drop out has no major impact on their business as a whole. Distributors are unlikely to make any serious adjustments in their pricing strategies unless, and until, there is a major fall off in supply.