James West Explains 50 Year License

Posted on 7/14/2011 by Jim Pickerell | Printable Version | Comments (3)

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• We have 1 customer - I repeat - 1 customer - whose license duration, due to a limitation with our hugely complex (and outdated, but that's a story for another time) price calculator, has been reported as 50 years.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.


Copyright © 2011 Jim Pickerell. 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: jim@scphotos.com

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  

Comments

  • Danita Delimont Posted Jul 14, 2011
    Great to hear James' comments on the pricing calculator, which renews my faith that there won't be future licenses for 50 years. I've supported Alamy's efforts from the beginning and although their licensing prices are much lower than what we've enjoyed in the past, they are well established and continue to be moving ahead in this ever evolving industry. Thanks to the teams at Alamy on both sides of the big pond!

  • Larry Minden Posted Jul 14, 2011
    Fabulous - a little sunlight on the 50 year RM license and its already in throes of extinction. Any other contributors care to expand on Danita's mention that "their licensing prices are much lower than what we've enjoyed in the past". Maybe some illumination on some of the lowest prices in the industry could bring about some beneficial change there too.

  • Bill Bachmann Posted Jul 15, 2011
    I also say that I am glad that alamy is in the business and they pay "fair". As one of the industry's top stock photographers, I am thrilled to say that. James has done a fine job and, as one of his photographers, I say I appreciate that so much. Yes, the rates are lower than in the past, but that is the entire industry .... not alamy's fault.

    Stay true to all of us, James, keep your independence, and I for one among many of my friends will always be loyal to you with my best work!

    www.billbachmann.com

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