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ALAMY.COM
August 24, 2000
alamy.com is set to launch a new brokerage service for photographers on September 20,
2000. This service is designed to aid photographers in marketing their work through
the Internet. The company is headquartered in the United Kingdom and Alexandra
Bortkiewicz, formerly with Tony Stone Images, is Director of Photography.
The company plans to offer photographers 90% of the gross fee collected after a
transaction fee of 3.5% to 5% is deducted. If payment is made by credit card a fee of
3.5% will be deducted, if alamy.com has to invoice and collect they plan to deduct
5%.) It is expected that when they invoice it will only be to qualified users who are
regular buyer of a quantity of images and who desire to pay on a monthly basis rather
than use by use.
For the most part sales are expected to be automatic with little or no human
interaction between alamy.com and the client.
alamy.com offers photographers a choice of making their images available on an
image-exclusive or non-exclusive basis and they can specify which option on a
case-by-case, submission-by-submission, basis.
If images are supplied as image-exclusive then the photographer also agrees to a
"substantially similar" clause that is defined as, "all or most of its principal
elements or subject matter are depicted in a way that may reasonably cause a person
viewing the Image side by side to believe one Image is the same or substantially the
same as the other image." The problem with this is that it leaves the decision as to
what is similar up to any buyer and the courts. If the buyer chooses to take a strong
position the photographer is left with little protection, given this language. To
avoid problems the photographer has got to hold a lot of images out of circulation.
I believe most photographers will find it advisable to initially make images available
on a non-exclusive basis so they can continue to use other sources, in addition to
alamy.com, to market the same images or subject matter.
Photographers will also be able to place limits on the licensing of their images so
certain types of uses would not be allowed. The photographer will be able to specify
countries in which an image may be licensed as well as specific terms of use or
industry sectors. This enables the image to be used in other ways not covered under
these limitations.
Photographers should carefully examine how this process works within the alamy.com
software to insure that potential buyers can not make a use of an image that would
violate an earlier exclusive license. alamy.com insists this will not be possible,
but is hard to imagine how a software solution can deal with all the potential
conflicts.
If you are always licensing one-time non-exclusive rights to your images then there is
probably little problem, but it seems to me that there is great danger in licensing
any type of restricted use unless there is human negotiator handling all sales of such
images.
Issues To Consider
The following are a few issues that should be given careful thought before signing on
with alamy.com.
What will the pricing schedules look like? In the Frequently Asked
Questions section of their site alamy.com has provided a few sample prices for both
licensed rights and royalty free. The licensed rights uses are somewhat lower than
the current recommended rates in "Negotiating Stock Photo Prices" and the RF rates are
lower than the current PhotoDisc prices.
However, these are only sample prices. They are non-binding on alamy.com, and they
may change. Photographers would be wise to see a full operating "license calculator,"
and the pricing schedules before they rush to sign on. Since everything is automatic
the breakdowns in each schedule become critical.
alamy.com will also have three price bands for each image. The picture editors will
select a suitable price band for each image at the time of submission. If the image
is placed in the lowest band it will always be priced at the lowest of three fees for
a particular size and circulation. At Stock Connection we have found that often
customers are willing to pay very high fees for a very common image, because it
happens to work very well with their concept and because they will be making large and
multiple
uses of the images. Look at such an image in isolation, separate from the potential
use, and every reasonable person would say that it should be priced at the lowest
level because it is so common.
The reverse is also true. You may have an image that is very unique and extremely
difficult to produce. It gets priced at the highest band. Then a buyer comes along
who would like to use the image 1/4 page in a small circulation brochure, but the
price has pushed the image beyond his budget. If there is no means for negotiation
and the buyer is forced to pick something else.
What happens when negotiation are necessary? In their answers to
Frequently Asked Questions alamy.com indicates that there will be provisions for the
buyer to contact the photographer directly and enter into negotiations for some of
these complex sales. It is not clear how that will work. If the photographer's
contact information is always available to the buyer then it is entirely possible
buyers will be going to the photographer to negotiate on a high percentage of usages.
Consider that Getty finds it necessary to have 665 call center sales representatives
worldwide -- despite the fact that they have automatic pricing. From our experience
we know that a negotiator is involved in a high proportion of the sales made through
PictureQuest, and they also have automatic pricing. Since alamy.com does not plan to
have any staff negotiators all these calls will have to go back to the photographer.
This could be a good thing. Photographers will have more control. But, it is
important for the photographer understand how the fixed pricing will be structured so
he or she can determine how frequently it may be necessary to become involved in
negotiations. This could require a restructuring of work procedures in the
photographers' office in order to deal with such negotiations.
Pricing Exclusives. In the FAQ's alamy.com says, "Customers of
alamy.com would typically pay between 20-30% more to guarantee an exclusive license
for their project."
This is extremely low -- particularly if the usage is small. Consider, if a customer
wants to run a 1/4 page ad one time in one magazine -- but they want a year exclusive
on the image. Don't say it will never happen. It has. Thirty percent on top of a
minimal basic use fee is nothing -- and the image is locked out of potential sales to
someone else for a year. Basically an exclusive on such a use should not be sold
unless the buyer is willing to pay many times the basic use fee for the exclusive.
Since this is highly unlikely the image should not be made available on an exclusive
basis for this use. With automatic pricing there is no choice. In my opinion
exclusives should not be licensed without a negotiator. Photographers will definitely
end up being the losers is they allow this to occur.
No matter how complex the pricing schedule there will be many uses that don't neatly
fit into the structure. More and more frequently buyers who are willing to pay big
money for a usage, want to use the image for several different things: ads in multiple
publications with different circulations, in a brochure, a poster, on the web, etc.
With this much usage there is always a break compared to how each usage would have
been priced separately.
Photographers need to fully recognize the limitations of automatic pricing systems
when trying to license rights in an area where Every Single Product and Every Single
Use is Unique.
What percentage of total worldwide sales are likely to be fully automatic?
The percentage of sales that will be fully automatic, compared to those where a
negotiator needs to be involved is a critical issue. Unfortunately, the agencies in
our industry who are making such sales have not been willing to share details for
understandable competitive reasons.
On the other hand it seems unlikely that they would need the large numbers of call
center sales staff if a high proportion of the sales are automatic. Thus, it seems
reasonable to draw the following conclusions:
1 - Only a small percentage of the total worldwide buyers of Rights Protected
images will be prepared to conduct the entire transaction automatically. A much
higher percentage of Royalty Free sales can be automatic because there are no rights
issues to be discussed.
2 - In order to deal with the issues of Rights Protected buyers, the photographer,
or someone negotiating for him or her, will need to become involved in the
transaction. This will require time and effort on someone's part.
3 - When the negotiation is in another country or language the complexity
increases exponentially.
When will alamy.com start selling? - They say, "We shall start selling
images as soon as we have reached our initial target of 100,000 high quality images.
So please be patient and remember - the more effort you put into alamy.com, the more
likely it is you'll be rewarded with early sales."
Photographers will have to invest a lot of time, energy and money before the system
ever goes on-line. Keep in mind that ASMP's on-line agency MIRA has about 70,000
images after seven years. Stock Workbook which has images from about 40 agencies has
only about 30,000 images after 3 years. The amount of work required of the
photographers and agencies who place images with MIRA or Workbook is much less than
that required by alamy.com.
Reaching 100,000 will not be easy. Those who put forth an effort early will have the
longest to wait before they start seeing a return on their investment. On the other
hand a significant presence is needed before they start spending a lot of advertising
dollars to promote the site. If users have a bad experience early because they can't
find what they need, they may not return.
alamy.com says, "We are on track to launch in early 2001 with 100,000 images and that
they have had a tremendous response. This one-off waiting period, prior to launch to
image buyers, will be probably less then the time on average, that photographers have
to wait for their images to hit the market place with their existing agencies."
Marketing. It is hard to see where money for marketing is going to come
from. alamy.com says the 10% commission will cover storage, network and development
costs. It also has to cover basic administrative overhead and marketing to get
photographers to put their images on the site.
Where is the money going to come from to pay for the international
advertising and promotion campaign that will be necessary to get potential photo
buyers to use the site?
They say, "We have done detailed research that shows that we can be
profitable at this level (the 10% level)." They point our that by being totally
on-line, they will avoid the high operating costs that agencies normally incur in
having multiple premises, sub-agents and salaries. They will have no catalog,
scanning, retouching or dupe costs and no handling of film. Their sales process is
streamlined and they have a low cost editing procedure.
They expect to hire "a small marketing team to develop an effective
marketing strategy for alamy.com. We plan to do global, broad based advertising,
comparable to industry standards." (Most successful stock agencies are spending much
more than 10% of gross sales on marketing and advertising.)
How does the keywording software work. Photographers are going to have to
keyword all their own images. This will take time.
Photographers need to determine what is involved and weigh the costs in time and
effort against the likely return. Simple category keywording may not make it easy for
clients to find the images in a large database, but more detailed keywording can take
a lot of time.
It appears that alamy.com does not plan to have a system to import legacy keywords.
There also needs to be a system to export keywords. If the photographer wants to put
the same non-exclusive image somewhere else he or she does not want to keyword a
second time. alamy.com may offer this in the future.
Scan size. alamy.com recommends photographers send files in the range of
48MB to 70MB so they will be appropriate for both editorial and advertising usages.
They will accept minimum file sizes of 18MB. To generate such large scans and to do
the keywording the photographer is going to have some serious investment in time and
money for each image supplied. Carefully, consider whether the return is likely to be
enough to justify the investment.
One other bit of information regarding scan size. At Stock Connection well over 95%
of the scans we have available for licensing are 18MB PhotoCD scans. Only in rare
cases where the photographer created a digital image do we have larger file sizes.
We do have film available if the client needs it. In the first six months of 2000 our
average fee per usage was $925. We do license frequent multi-thousand dollar uses.
All our contracts with photographers are non-exclusive. There are ways to get around
the necessity of having large scans of every image on file.
Photographer's liability. Given that there are automatic,
non-negotiated, sales photographers who submit images on a non-exclusive and a
non-released basis should make sure that there is a statement that is part of every
license that makes it clear this is a non-exclusive use and limits the photographers
liability if the images is used in a way that might require a release, or in any way
be considered defamatory of the subject. This is extremely important because laws
vary greatly from country to country as to the type of editorial uses that are allowed
without a release.
alamy.com will require photographers to submit copies of their releases for all images
identified as released. Buyers will be able to view the release and "will not be able
to buy an
unreleased image for use in anything non-newsworthy. Their license agreement will
stipulate where and how the image can be used with details of the release information.
Release restrictions can be fed through the normal restriction route," according to
alamy.com.
This may work, but it also may limit certain "commercial" uses of images where
releases might not be necessary. The bigger concern
is the use of "released" images to illustrate certain sensitive issues. The buyer may
not consider the issue sensitive, but the model may. In such cases the license
agreement should clearly place the responsibility on the buyers shoulders.
Submission process. The photographer must submit digital files for review
and initial edit. Once selections have been made the photographer is then asked to
submit high resolution images. These scans will be scrutinized to insure that there
are no flaws or technical imperfections. If there are, the photographer will need to
make the corrections. alamy.com will not do any clean up or correction of scans.
Once the scan is approved alamy.com will then notify the photographer that the images
are ready to caption and keyword on-line. Then one of their international panel of
picture editors will double check the information and rate the
images. This is a complex process.
alamy.com says this review process is only for the "first submissions" and for
pre-launch marketing. alamy.com will not be editing images on a regular basis.
Photographers will be allowed to do their own editing and if there are no flaws in the
scans, the images can be processed through the system very quickly.
alamy.com says, "It is early days. Our system was designed after extensive
consultations with photographers and buyers. We have lots of ideas and are very
pleased to receive early feedback but we have to start somewhere. A digital exchange
can only work
if it reflects the demands of its buyers and suppliers."