Raw deal: available from iStockphoto for $430...or Alamy Premium for $49.

When does stock photography become microstock photography? Can it be cheaper than microstock? And what happens when a supposedly non-microstock agency offers the same images as a microstock site, but for less?

Stock agency Alamy found themselves facing a forum firestorm last week when a leaked marketing email revealed the existence of a previously unknown Alamy product called Premium. Contributors were infuriated not just by the fact that they only heard about Premium through a leak rather than an Alamy announcement, but also by Premium’s terms – $49 for virtually unlimited commercial usage for 10 years.

Although the language employed was not as colourful, the row had echoes of last year’s iStockphoto riot when contributors to the microstock agency were outraged at a change in their royalty percentages. As at iStockphoto, contributors took to the forums to denounce the Premium deal: Alamy staff made several attempts to calm the situation, but these seemed only to add fuel to the fire. Eventually Alamy CEO James West stepped forward with an attempt at a definitive statement on the company position and Premium.

But West’s statement prompts at least as many questions as it provides answers:

  • He stressed that advertising use was excluded from Premium, but does the deal include the far more common editorial usage?
  • Although described as a test, West claimed that some Premium clients had already upgraded to high ticket advertising licenses: so had the newly revealed Premium secretly been on the market for some time?
  • Premium was described as only one of a number of tests, some at a higher price point: but are there any at a lower price point?
  • It was stressed that there is no opt-out from Premium, but contributors quickly found a loophole: by placing a single restriction on images those were removed from Premium offerings. So would Alamy move to prevent contributors placing restrictions on their images?
  • Some larger Alamy contributors’ material seemed absent from Premium: so had those contributors been given the option to opt-out in advance?

James West
These questions are a bit tricky... Alamy CEO James West
When these questions were put to West on Friday he declined to answer, meaning that – at least in theory – all the above are possible. His only comment:  “I don’t have anything further to add other than to remind readers that these price experiments will account for less than 1% of our revenue this year.”

But the most intriguing question – which West also declined to answer – is prompted by his most startling claim: “Our trials have shown that we can cannibalise microstock market share at a much higher price point.”

That’s a pretty daring claim on two points. Firstly, it’s generally accepted that microstock buyers are primarily motivated by price: the idea you can get them to pay much more sounds like quite a challenge. But it’s the second point that’s more interesting: West’s assertion that Premium really is more expensive than microstock.

People unfamiliar with the microstock market will instinctively buy that: popular belief is that typical microstock prices are no more than a couple of dollars. But that’s really not the case: those dollar deal prices only ever apply when clients both buy huge amounts of microstock “currency” – so-called credits – toward future purchases and also make limited use of the images they eventually license. Once a client buys and uses a microstock image in the way Alamy are pitching Premium – maximum size, no subscriptions and virtually unlimited usage – microstock prices rise dramatically.

And now maths? This is really hard...
How dramatically? For a direct comparison take the casino image above. It’s available Royalty Free at Alamy in its largest size for $365. But it’s also available from iStockphoto, the microstock market leader, at the same size and usage for $213.75, $65.25 or $54, depending on whether it’s bought Pay As You Go, or on a corporate or subscription account. However that’s not the whole iStockphoto story: those prices rely on the purchaser buying a massive number of credits toward other images. To get even the PAYG $213.75 price you first have to buy 20,000 credits at, gulp, $19,000. If you simply wander in the iStockphoto door today and just want to buy this image alone as a one-off it will cost you $430. But here’s the real figure that counts: the same image is now available at Alamy Premium – for $49.

This is not an isolated example carefully chosen to browbeat Alamy. As at other microstock outlets, prices at iStockphoto are dictated by three factors: the price band of the image chosen; the usage; and the way credits are bought. Istockphoto have five price bands; the equivalent license to Premium is XXLarge-Extended License-Multiseat-Unlimited Reproduction; credit prices run from $0.24 to $1.63 each. The very cheapest you can buy a Premium-equivalent license at iStockphoto is $52.40; but that requires a subscription account and an investment of tens of thousands of dollars in credits. At the other extreme, buying the most expensive image in the most expensive way, the price rockets to $800.

In Alamy Premium your advertising sales will be THIS big...
In practice most prices will be somewhere between those two extremes. But one thing is clear: on the publicly available figures it is impossible to buy a Premium-equivalent licence at iStockphoto for as low as Alamy’s Premium price tag of $49. Alamy will have run their own figures, but unless they’ve seriously stacked the deck it’s very hard to see how they conclude that Premium has a higher price point than microstock. On the contrary, Premium isn’t just a microstock product: it has a sub-microstock price.

There is of course one key difference between Premium and microstock licenses: the latter include advertising and the former don’t. During last week’s damage limitation exercise Alamy made great play of this, claiming that Premium customers “upgrade” to big-ticket ad rates. But this is the photo agency as lottery: make your images available at a bargain price and you might hit the jackpot of an advertising sale. Given the sheer number of Premium images available – some 25 million – the odds of any single one being upgraded is infinitesimally tiny: the truth is that most $49 Premium licenses will remain just that.

Last week’s row developed a comic sub-plot when one Alamy contributor by the name of Dingdong posted comments he attributed to West:

“The simple answer for our contributors is move with the times or get out. We are a business not a charity to our contributors. We have serious contributors whom we have contacted and agree in principle to the need to change.”

Although the post was obviously a hoax that didn’t stop it reappearing on About The Image and elsewhere as a genuine quote from West. Unsurprisingly the Alamy CEO was unimpressed by this display of Internet juvenilia, describing it as “comments that I would never have made.” But the truth is when the chips were down West’s own message was little different:

“There is no opt in/opt out available for this. You can, of course, opt out of Alamy whenever you like. We provide the marketplace and set the ground rules, but it is entirely your decision as to whether you want to participate or not.”

So the lessons are clear for punters who want to try their luck in the Alamy Premium casino. The management sets the rules – and the house always wins.

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19 Responses to “Alamy: “We Can Cannibalise Microstock” [By Selling Photos Even Cheaper]”

  1. Freeman Freeman says:

    Well, my analogy was James West greasing his arms and clenched fists (James Herriot style) and telling Alamy contributors to bend over a barrel with their trousers down. Obviously any Getty contributors would already be used to this. You have, however, put it more succinctly. The results = the same. For those of us in dire straits with the recession and needing cash seem doomed to corporate buggery…sorry thuggery.

  2. Ian Murray Ian Murray says:

    I think the sad truth is that this sort of ‘bundled’ deal is far from unusual and is something that all the mega-portals compete on. My concern is not so much the low fee but the erosion of the rights managed licence by stealth.

  3. I don’t know where your iStockphoto figures are from. I have a small number of test files on iStockphoto and an account. I can select a double-page spread size, Extended licence for the maximum possible rights including a $250,000 legal indemnity and the cost is $100. I can buy credits at $1 each and it usually costs me $20 for a batch (my 13 files on iStockphoto also earn me credits, so far in their life $116 worth). I occasionally buy iStockphoto pix for editorial use or things like testing software (example, Portrait Professional reviews – I do not want to muck around with portraits of my own family or clients or friends, so I buy pictures of ugly people from iStockphoto to use when writing reviews of this ugliness-removal software). Maximum I have paid has been $15.

  4. Pete Jenkins Pete Jenkins says:

    I think one of the most worrying things I am hearing about Alamy Sales pitching is the desire to follow Getty in the apparent merging of the Royalty Free license type and that of Rights Managed. They are very different and for a good reason. Portals such as Alamy need to remember that they are not necessarily the only agent for any particular creator. It is unprofessional to blur the boundaries in the ways that have been recently reported.

    Photographers need more than ever to be aware of the way their chosen agents and portals do their business. For some Alamy is still one of the best ways of getting ones images out there amongst the clients. But for others Alamy will most certainly not be the best way of marketing imagery!

    It may well be that quality imagery with strict licensing will have to be got direct from the creator in the future, in which case serious quality creators need to look at exactly how they market their work.

    Alamy still has its strengths, and it should play to them. It is worrying when a perceived market strength is the ability to sell licensing cheaper than ones rival, rather than concentrating on providing the best client service and quality product.

    One has to ask is one the Asda/Wall-mart of photography, or more like Waitrose/Fairway. I know where my aspirations lie, and I worry daily about the direction agencies and portals like Alamy are taking.

  5. Peter Peter says:

    I took the decision to delete all my images from Alamy. It was purely business based. If they licence something on a 10 year RM licence, then that effectively destroys my ability to licence the picture via other more effective agencies. Given Alamy is so large, and generally full of rubbish, my sales from there have bever been particularly good, so as a result I took the business decision (which is exactly how I worded it to them when I e mailed member services) that it would be more damaging to the value of my stock, staying with them, than simply leaving and concentrating on other agencies with better sales.

    In other words, you can only play fast and loose with pricing when contributors have something to loose by leaving, and with due respect to Alamy, their sales (for me at least) don’t give them any where near that level of power. They need to get real. Large they may be, but for me as a business, they simply arn’t important enough for me to have to put up with this.

  6. The ABC of business management: competing on price is an unsustainable advantage for all but the competitor with the lowest costs.

    Price cutting is easily and quickly replicated by rivals, all that is ‘gained’ is a downward spiral of lower margins and the eventual collapse of rivals with higher business costs. That such a basic tenet is ignored by nearly all the CEO’s of stock distributors ought to be a source of embarrassment.

    Combine the dynamics of price cutting with the seemingly insatiable greed at boardroom level of many corporate image buyers and it’s not hard to imagine how a 49 dollar licence fee will over time drop to 39, then 29, and finally to 19 dollars or less.

    Is it not time for industry leaders, the CEOs of stock distributors as well as the various photo associations to hold talks and address the very real crises that faces the industry, rather than continue with the ostritch mentality of price cutting (and royalty cutting)?

  7. JeffGreenberg JeffGreenberg says:

    Alamy will make this offer ONLY to a select group of high volume
    buyers, e.g., encyclopedia publishers, that already use lots of
    microstock & little or no Alamy…?

    If true, the –>$430<– to $49 comparison, is tangential.

  8. The offer was made to a small Canadian Travel Agency that had never purchased an image from Alamy before, certainly neither high volume or with enough known about them to be ‘trusted’.
    The Alamy offer was
    *Client* *Question: *

    What exactly is a “Premium Account” … what is the cost to join, and how do I set up?

    *Alamy Answer: *

    What is it? Well it’s just a title for a new way of pricing images (for us, we’re used to traditional Rights Managed/Royalty-free!).

    There is no cost to join, no obligation, you just pay for images “as you go”, on credit card or if you like, you can open an account and be invoiced instead.

  9. JeffGreenberg JeffGreenberg says:

    “The offer was made to a small Canadian Travel Agency…”

    (1)You are quoting an anonymous source
    (2) at AboutTheImage, the blog that posted phony JW statement
    (3) indicating their lack of basic journalism procedure
    (4) whom I sent #3 comment which they don’t publish

    How are you able to specify “small Canadian”?
    Are they YOUR client? Your price vs. Alamy-$49?

  10. Carl May Carl May says:

    Maybe Alamy has decided it prefers to concentrate on doing business with photographers who crank out skill-less commodities by the tens of thousands–like the few photographers making money at the undercutting microstock game. As Paul Panayiotou clarifies above, grubbing around on murky price bottoms is inevitably a losing proposition for all but the cheapest, but photographers and managers of distributors alike get to be pollyannas until the bell tolls for them.

    Actually, I see some hope in developments like this one at Alamy. It just might be possible that the day will come when enough professional photographers become fed up with distributor moves like this, separate themselves from the unwashed masses and commodity floggers, and dedicate themselves to modern, exclusively RM pricing models and distributors that adhere to them.

  11. Hi Jeff,

    He is a good friend rather than a client. He employs about 20 people and produces one brochure a year, very specialised, mostly with free images. That quote on “About the Image” was verbatim and the person exists. He is aware of what is happening to our business, so asked a lot of questions and asked for an email reply.

    A good rule in business and life, if what you are doing would embarass you if it became public, then perhaps you shouldn’t do it. Alamy didn’t throw open this particular ‘offer’ to their photographers to opt in or out of, but its implications are every bit as wide as Novel use or Subscriptions.

    Our images are all RM and I want them to stay that way, Many smaller travel companies now use clients images free in their publications. No one can compete with good and FREE, not even microstock.

  12. Bob Croxford Bob Croxford says:

    When Alamy started they did well. They filled a need and I sold a reasonable amount at reasonable fees. Even with my limited selection they sold 6 licences at over $1,000 in one year. Then the rot set in.

    They introduced a keyword system which was not industry standard and did not fit the international IPTC keyword set. This meant massive amounts of extra work for contributors.

    They then introduced what was the killer punch for me, a ranking system which put specialised collections way down the search results. Their crazy system put the non-expert’s images with incorrectly spelled keywords on the top of the first page. I have uploaded to Alamy unique images, which I have done for books, but their ranking system puts a single drive-by image taken on a dull day on page one and mine lost somewhere on page six. I refused to play the pseudonyms game.

    Then we had the farce of cheapo Novel Use which was used and endorsed by Cargill, probably the biggest Agri business in the world. A print run of their staff newsletter would dwarf many mainstream magazines.

    Then I had the experience of trying to persuade Alan Capel to follow up uses of work that had not been reported after over six months. He seemed to think it was my job to find Alamy’s unreported downloads. They managed, in my experience to give away three images for every two they reported. (I never did get paid for the last one used by the Guardian on its website.)

    I then decided to remove my images from Alamy.

    Alamy never did get the idea of RM licencing. When they did manage to sell a 3 year exclusive of mine they suggested that it was up to me to add the restriction on their website. Their slow reporting made rights management a headache.

    Photographers used to describe Getty as the big bad influence in stock photography but now Alamy seem determined to take the crown.

  13. JeffGreenberg JeffGreenberg says:

    “He is a good friend rather than a client…produces one brochure a year…mostly with free images”

    This is further confusing.
    Your travel agent friend pays mostly ZERO per photo
    & you prefer to complain about an agency trying to get
    your travel agent friend to pay $49 per image…?!

    And it is allegedly a second unknown Alamy contributor
    who DOES sell to your travel agent friend that contacted AboutTheImage…?

  14. Jack Smith Jack Smith says:

    This is a race to the bottom by Alamy, they are desperate and will try anything, next it will be 30 dollars then 20 then 10 and so on.
    The Alamy collection needs to be edited, but vested interests will not allow that to happen, the vested interests are the so called big guns.
    The Photographers who want to keep a 60% pay out at any cost because it suits them, there needs to be a cut to 50% to hire on picture editors to get rid of all the poor quality work.
    So instead of doing this they do what ever the big guns want to keep them on side, they were most
    likely briefed about this by Alamy before any announcment was made.
    And most likely the big guns will not be part of the Alamy bespoke collection, to keep them on side.

    Regards Jack

  15. Jerome Yeats Jerome Yeats says:

    Alamy does not come from a photo agency background and it shows. The ranking system is a farce. I said from the beginning that Alamy’s idea that there would be no editing was not too clever and now there are 27 million pictures on the site and as everyone says sales for ridiculous time periods. Alamy hates criticism and people who have worked for newspapers and press agencies. In my case photos taken at the photocall of a very important musical rank below the seating plan of a German production of the play. This when one of the big Parisian agencies (now defunct) managed to sell to both “Newsweek” and “Time” and a host of European magazines so my work has a proven track record. Bottom line, images are not ranked but contributors are, and if you upset Alamy management you will find your ranking on the floor. How long will I stay? Only inertia keeps me on board. Not happy.

  16. DJ McKinlay DJ McKinlay says:

    Like others say, when Alamy came online they were a breath of fresh air. I was filling in on one of the Times picture desks when they first hit the market and to have the ability to download low and hi res images was fantastic. No waiting for a bike to show up with a set of trannies, prints or discs. Just search and download – picture editors and designers alike were happy. So, I started putting some pictures their way and at first they did OK – selling for up a $1000. That lasted about two years and ever since the implementation of all that ranking malarky, it’s all gone south. I admit I never sent them the best of my work, but the extra money was always a help. Now, like Jerome, it’s only laziness that keeps me from removing all my images. But then again, everybody know what the real problem has been over the past four years. Picture buyers willing to run any old crap because it’s cheap – not to mention the weekend warrior amateur snappers really f**king things up. Bring back film!

    Regards, Doug

  17. jon snow jon snow says:

    And now a new Alamy giveaway 29 dollars for 3 years commercial use for businesses with less than 10 people to buy a similar image at a well know Microstock Agency xxl and extended downloads 200 dollars the cheapest and 400 dollars the most expensive.
    For a pay as you go purchase.

  18. Henr Henr says:

    This is not only the “premium” scheme, they ahve also the “distribution” option (you can opt out on this one) which gives the contributor a revenu close to peanuts.

    There is also the change from a 60% (contributor) 40% (alamy) to 50/50 that happened in the mean time.

    You can sell pictures on alamy as cheap as on any microstock website even with the “normal” (RM) scheme. A photo for a website can sell around 5 to 10$ ! (so what’s the point of being on alamy then ?).

    Photographers choosing alamy to sell only RM pictures can only be disapointed when they realise that:

    1. They eventually sell pictures as cheap as microstocks
    2. Photo are pillaged at extremely high rate even though it’s RM (once on the web, it’s the jungle and alamy doesn’t do anything against that).

    Alamy behaves and is a multinational corporation whose main goal is PROFIT. People get illusions about some kind of old reputation in term of ethic and respect for photographers.

    To me, it looks like they do everything to squeeze the photographers in order to satisfy the very few clients they have (mainly UK newspapers).

    They could have chosen to be selective and opt for quality over quantity but they pride themselves of being the largest photo library (not sure it’s true). You really have a lot of junks there that shouldn’t be online.

    Like every other nice big corps, they have cheap labor offices in India (customer service and iT I think) and they mainly recruit there. Again, not exactly the attitude of a
    good company. They also opened their offices in New York which might have cost a lot (explaining the squeezing of 50/50 on contributors payments).

    I would like to see them publish their results, profits and numbers every year like other companies do.

    And what is the salary of the CEO, the famous James West (reminds me of a TV character) ?

    It’s all very opaque like most of other online stock companies. Then it’s easy to take arbitrary measures, invent crappy schemes like premium to do microstock pretending you don’t.

    The only soultion for photographers is to get out of the claws of these profiters (alamy, getty, i-stock, etc..) and associate to distribute their images or do it themselves.

    the alamy of this world feed on their hard work and talents without offering much in return and taking most of the benefits.

  19. Steven James Haggrd Steven James Haggrd says:

    I pulled all of my images about a year ago. It has been a steady downhill decline in the prices from my first sale in 2005. The last straw was the last two sales. The first was World English Language, Editorial, Textbook, Inside full page ,unlimited for 25 years. That is correct. 25 years. My total cut was $78.75 or $3.15 a year. The second was Worldwide Corporate Package use, Banking, Finance & Insurance, no placement or size given, for 10 years. My total cut was $29.40 or $2.94 a year. What a joke.

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