Alamy Images - Interview With James West

4

April 14, 2006

Recently Pat Hunt interviewed James West to learn a little more about the many behind Alamy. West is one of the new breed of young creative CEOs who can spot a great business model and run with it. Since 1999, he and Alamy have been breaking rules in the imaging industry and building momentum fast.

What is your history with Alamy?

I am the co-founder and CEO of Alamy, which we started in October 1999.

How do you edit images for value?

We edit in the sense that we quality check digital images to make sure they are of the right standard technically, the right resolution, and free of artifacts, dots, and hair etc. We do not make a subjective judgment on the quality of images. The only thing we will object to is pornographic material.

How does your business fit into the word "portal"?

Describing Alamy as a portal is somewhat misleading. A portal, by definition, is a gateway to another place. If Alamy were a portal in its purest sense, people would be coming to us to find pictures and then going to the photographer to complete their transaction. We actually transact the sale with the customer and we also hold the images on our site, so we're more of a marketplace than a portal.

From a contributor's point of view your site is quite different.

We pay our contributors sixty five percent. This payment is the same regardless of whether you are a student who is new to photography or a well established photo agency. We ask our contributors to edit and keyword their own images to eliminate much of the costs associated with getting images on-line. The combination of contributor editing/key-wording and our automated processes enables us to return a more generous royalty in comparison to other business models out there.

How many employees do you have?

We have 100 employees in two offices in the UK and in India.

Please describe why you went to India.

We opened the Alamy India office about eighteen months ago. This gives us scope for development that would be too costly in the UK - such as a five-fold increase in our software development, back office support, and picture research teams. Our business is under pressure to expand and India makes it possible for us to do that on a scale that meets the needs of our customers and contributors. Another reason for selecting India is that English is widely spoken throughout compared to other countries offering outsourcing opportunities to foreign organizations. Our office is based in Kerala, which has close to a 100% literacy and numeracy rate. This is a big attraction when recruiting graduates straight out of the University. India is also an exciting emerging market for stock photography, which is another reason why we wanted a presence over there.

What about markets like Ukraine, Slovenia, and Slovakia?

We are selling into Eastern Europe, primarily through distributors. We have 39 distributors covering almost 50 countries. They are mainly in territories where we do not have direct sales; South America, East Asia, Southeast Asia, Eastern Europe, and the Middle East.

What's new with your online uploads?

We would like to make it easier for our contributors to get their images online. Currently we have a fourteen-day waiting period. At busy times this can take a little bit longer. Our goal is to see that cut down to hours rather than days. With our contributors increasingly becoming broadband enabled, a preference to upload rather than posting images becomes the norm, and so it is in all our interests to make that change. We don't yet have a date when this will go live but work has started on the project.

What is the difference between uploading and posting?

Uploading images directly to our website will be far quicker than sending images through the post, which can take several days. Presently all submissions to Alamy arrive via post.

Can you tell me about your new search engine?

The search engine we use at the moment has been modified to suit our application, but we did not write it ourselves. Although we are very familiar with it, we would like more control than we currently have over how it operates. About eighteen months ago we started a project to engineer our own search engine from the ground up. We've recruited a team to concentrate on building a search engine that will meet our specifications for the next few years. Alamy is growing quickly as a company, adding a lot of pictures, and dealing with a lot of searches everyday. We need a system that will keep up with those demands.

Whose company is Alamy?

Alamy is privately owned family business. I own 20% of the company and 60% is owned by my uncle and sole investor, Mike Fischer. The remaining 20% of the company is held as share options by Alamy staff members who joined the company in the early days.

Please address the US Commercial market.

If Alamy is to make a strong impact in the US commercial market, we need to offer a web site that gives US commercial picture buyers a searching experience that is relevant to their needs.

Because our collection is so large and continually expanding, we have a lot of editorial material that is not available to the commercial sector. Eventually I would like us to have a feature where a commercial client can say - "only show me images that I am able to use." We are also nearing completion of a 12-month project to review all RF images currently on the Alamy site. Our goal is to ensure that all RF images on Alamy have model and property releases where relevant, are free from brand names/trademarks, and are therefore suitable for all commercial use.

Do you put parameters on the quality of the model release you demand?

At the moment we limit ourselves to just providing guidance. We are considering requiring our contributors to submit digital copies of their release with all new submissions.

Have you fended off any suits over these matters yet?

We have been involved in a few legal actions, but nothing that ever got to court. We have on occasions intervened on behalf of either the photographer or the customer to resolve any misunderstandings. In most cases, the photographers have mistakenly stipulated that an image was released when it was not. Or they may have taken a picture of an object that has restrictions on it that they were not aware of. I see this sort of things as just part of the business of selling pictures.

What new business models do you see coming?

One of the things that is happening in our business is a proliferation of ways in which a customer can buy an image; RF, RM, subscription, and more recently micropayment sites - where a customer can license an image for a very low fee. One of the challenges for a distribution platform like Alamy is to offer our contributors new ways of selling images as these models develop. To test the market we may trial some concepts and see what the take up is among our photographers and customers. This will help us select our strategy going forward.

What has come of your progress with PicScout, the rights tracking system?

No progress so far, but we are still keeping an interested eye on what they are doing. There isn't particular reason why we haven't taken it up - we are just taking our time to think of the right solution for us.

Tom Grill says he is testing his collection, Tetra, on your site and it is doing very well. His work is very commercial.

Tom has identified that most of the RF on Alamy is from agencies, and very little is from photographers. If an experienced RF photographer is able to produce that kind of quality, they should see good results. We have a lot of demand from our customers for strong contemporary RF. It sells well.

Please discuss the foreign languages issue.

Initially we launched Alamy in nine languages. Among others, we did Japanese, Portuguese, German, Spanish, and Italian. We found that we were spending more time managing the translations and keeping them up to date than we were progressing the business. I still believe that producing foreign language sites will eventually be an essential part of our strategy, but only after we have completed the development of our main markets in the US and the UK.

Please discuss Metadata.

We recognize in talking to our customers that it's an extremely important issue, and Alamy does not currently provide any metadata in its high res images. Clients tell us they are increasingly relying on metadata to manage the images they buy from libraries. For example, if a client wants to reuse an image, without metadata they can't tell where that image came from. We will be making an announcement on that in the next few months.

Do you have news imagery on your site?

We don't have any current affairs, but we do have a lot of images that were once news. We have a lot of archival material - extensive coverage of politicians, sports events, and historical events etc. It's unusual to see an Alamy image on the front page of a newspaper, but it's very common to see our images in the supplement sections.

How do you market?

We are concentrating on marketing campaigns that we can measure precisely. We are establishing a department that will concentrate 100% of their time on establishing a busy marketing program for Alamy this year. This will include tracking the responses to various marketing campaigns.

Can artists see their own number of hits per image?

At the moment we record all that data but we don't make it visible. We have a product coming out this year that is currently in the process of a patent application, which we are not discussing in detail yet.

Are patents necessary in this industry?

We have a number of patent applications in progress and we see ourselves as a technology company. We are competing with some large corporations with extensive intellectual property portfolios, so it's essential that we have the means to protect our innovations.

You are not an old company. Are you profitable yet?

Yes, we are profitable.

What is your own personal history. How did you get into this?

I came out of college in 1995 with a lousy degree in Geography - I very nearly failed the whole thing and was lucky not to be kicked out! Following graduation I worked as a diver and deck hand for a diving expedition team. After nearly 8 months at sea I had convinced myself that I wanted to be a Doctor. I returned to the UK, studied at night school, and worked in a local hospital. After two years of rejected applications and sitting outside offices pleading with admissions tutors for an interview, I had to accept that my plan wasn't going anywhere.

Whilst working at the hospital my luck began to change, largely thanks to a kind professor who had responded to one of the many letters I had sent out, and I was given a job at a medical research lab at Oxford University to develop a website for sharing data among laboratories. It was the early days of the Internet and I was becoming aware of its potential.

In 1997 I developed a web site called InstantPages.com. You could come to my site and tell my software about your business and it would build a website for you. After about a year I realized that it was not going to take off unless it had a big investment in technology and marketing. Reflecting on my experiences with an uncle (Mike Fischer) one evening, he told me about his idea for a website that sells pictures for photographers. Neither of us knew anything about stock photography. He offered to invest if I agreed to set it up and run it. So Alamy came along at the end of '99 and it was the perfect fit for me - a combination of photography and technology, which are both interests of mine, as well as being a very exciting business to be in.

Are you shooting?

Not professionally. I take lots of photos as I'm a keen sailor and I have great little waterproof camera, but I'm not very good.

How old are you now, and what do you see as your biggest challenges going forward?

I'm 32 and my biggest challenges are to sustain our growth in sales, keep our product ahead of the competition, and stick to our budgets.

Your business model is different. Do you feel impacted by the micro companies or the large companies like Getty?

Getty certainly has the biggest share of the market, but Alamy has become successful by identifying new opportunities rather than seeing Getty's size as a threat. When we came along five years ago there was a lot of disruption and uncertainty about where the market was going. Our policy of not editing images, charging a small commission, and leaving the key-wording to our contributors has been popular with our customers and contributors.

Microstock companies illustrate a general proliferation in the number of ways in which you can buy an image. It is inevitable that in a market over supplied with photography there will be a downward pressure on pricing. These new microstock companies have positioned themselves at the extreme end of that trend. I think the real question is at what point must you price your images in order to return a decent living to your suppliers whilst at the same time delivering value to your customers. I don't doubt that microstock is here to stay, but I think they will occupy a niche in the market rather than revolutionize it. That is to say their customers will largely be people who cannot afford regular prices for stock photos. Microstock companies may well offer new opportunities to photographers but I think it is unlikely that they can generate enough income on which professional high quality producers can survive - and there will always be a market for high quality photography.

So while I do keep a close eye on what's going on in the market, I don't feel impacted by it. There have been no serious challengers to our business model yet, some weak imitations perhaps, but Alamy holds a unique position that gives us enormous growth potential. We are also a young company. So although we have delivered our first major milestones, which were to build a catalog of several million images and to become profitable, we still have a lot of work to do. We must improve our search engine and continue to innovate. What matters most in this business is getting the customer to the picture they want quickly, so we are focusing on developing the technology and services that makes this possible and not worrying too much about what everyone else is doing.

Have you been involved in the merger and acquisition whirlwind?

No. I enjoy running a private company, we are very ambitious, and we don't have to answer to anybody. It does affect us in some ways in that several of our suppliers have been subjects of those takeovers or mergers, but so far their new owners have chosen to stay with us.

What will the future be?

This industry is becoming more sophisticated, and with this sophistication comes tremendous opportunity for producers of imagery. When we started five years ago there were only a few places you could go if you wanted to get your images into the online market. Now there are lots of options. It's a fantastic opportunity for an image producer to experiment with different models, different production techniques, and not to commit to anything until they have established their strength, and their market. It's an extremely exciting time.

I think the recent round of acquisitions we have seen will tail off. It's partly defensive, to block content availability, and partly strategic in order to increase the margins of those agencies, but that is just one aspect of this industry. There are plenty of independent agencies who are offering novel ways for photographers to enter the market. I am very upbeat about it. Technological advances continue to make the internet available to a much wider percentage of the population. This means more opportunities for picture producers.

Are you going to expand into the audio or video market?

We have no plans at present but we do review it every now and again.
We are busy trying to become the best at what we do and there is a lot left to do!