Saturday, November 29, 2008

As Storage Costs Decline, Alamy Takes Mo' Money

Yes, as the costs of storage continue to decline, as well as the costs for server technology as well, it would stand to reason that your partner in stock image licensing would share in these cost savings by giving you, say, a greater piece of each sale? Then again, why bother. They've gotten to be so big that they can just do as they please, and take more of your money. What are you going to do about it? Go to Getty?

(Continued after the Jump)

Perhaps I am harkening back to days gone by where these organizations were "representing you", as your "agent", and looking out for your best interests. That notion was decimated by how Getty handled (and continues to handle) its' stable of photographers. We wrote about this back in September (Alamy, Oh My!, 9/28/08), about this same 5%, and they wrote on their blog here about the 5% from September, and here just recently, to remind you. The e-mail they just sent out, in part, reads:

The key changes are listed here: http://www.alamy.com/notice-board-1108.asp

We advise you to review the new contract here: http://www.alamy.com/terms.asp

The changes take effect on January 10th 2009, 45 days from November 26th 2008.

We recommend that you read through the changes thoroughly and print off a copy of the new contract for your records, there is no need for any further action on your part.

The key reason for issuing a new contract is the 5% increase in Alamy's commission on all commission schedules as announced on our blog.

The following commission splits will apply from January 10th:

- Alamy Blue: Alamy commission 40%, Contributor commission 60%
- Alamy Red: Alamy commission 20%, Contributor commission 80%
storage fees and submissionfees still apply
- Alamy Green: Alamy commission 30%, Contributor commission 70%
storage fees still apply

What is a mis-representation is that Alamy is not increasing their commission by "5%", they are increasing it by 5 percentage points, and there's a big difference.

Consider this. A sale of $100 where the commission was 40% to Alamy, that would mean they would get $40. a 5% increase in what they are getting would increase $40 by $2. A 5 percentage point increase would increase the $40 to $45. So, they are taking an additional 12.5%, not an additional 5%. They are playing games with statistics, making it appear like it's less of an increase than it is. What this means is that you won't see a 5% decrease in your actual dollars received, you'll see a 12.5% decrease in actual dollars received. So, for every $100 you used to get, you'll only be getting $87.50. Curb your holiday spending accordingly.

What's next? A Windows Home Server , which I wrote about (Microsoft Pro Photo Summit2008 - recap, 7/11/08) is something we've put in place here in the office. The box has four 1TB drives, and three Iomega 1.5TB drives, for about 7.5TB of storage space, all accessible to me from anywhere in the world. This is seperate and distinct from my ability to use "screen sharing" on my Mac and connect into the computers in my office.

What I think will be next will be that Alamy/et al will give you X% if they host it, and X% plus an additional percentage point or two if you host it - a sort of distributed computing/peer-to-peer network. All Alamy would need to do is set up a P2P solution and all of a sudden you are being required to host the images, and they become the distribution hub, and collect fees as the requests pass through their servers.

Please post your comments by clicking the link below. If you've got questions, please pose them in our Photo Business Forum Flickr Group Discussion Threads.

9 comments:

Anonymous said...

Dear John

Why would you give them that idea....... ?


Damn dude.... think this stuff through first.

Anonymous said...

65/35 --> 60/40
not
60/40 --> 55/45

$153.85 gross now = $100 to shooter
$153.85 gross later = $92.31 to shooter
5 percentage points in this case = 7.69%, not 12.5%, IMO.

Anonymous said...

It's not only about numbers... it's about our freedom and dignity.
The stock and licenced market is growing but the space for every photographer is shrinking.
So big palyer take it all.
DRR death is the first step...
I'm looking for Photoshelter but...
http://pa.photoshelter.com/gallery-slideshow/G0000aDAiHeyHPRw/
Pheraps I need to contact some other photographers to marketing my images through a virtual agency...
I believe that alone we will be loser

Anonymous said...

My thanks to Jeff Greenberg for pointing out JH's error, in his usual succinct manner.

The Alamy commission was 35% it is now 40%...but your comments, John, assume that Alamy's increased commission share should in some direct way be related to lower storage costs. That is too simplistic for words.

Rob Walls
Sure storage costs have gone down; but haven't all sorts of other costs gone up?

Anonymous said...

Yes costs have gone up ,so does this mean that they have to screw the suppliers to get their profit margin to the point that they are happy.
No they feel that we the supplier has nowhere else to turn so let us see what we can take.

Alamy is making the owners rich and i suppose greed kicks in.

Regards
Terence

Anonymous said...

Alamy was very clear when they first announced this move that it was not because of increased costs:

"We're making this change to fund a shift in strategy for the company which, I believe, will lead to a significant increase in gross payments to our contributors. We're starting by opening a dedicated sales office in the USA."

Alamy is taking an extra 5% to fund the opening an office in New York. They are not trying to stay afloat. They are not trying to make up for the increased costs of doing business. They are trying to expand their physical business, and they're having their photographers pay for it. Since when was Alamy a Co-op?

If this really goes through (it won't happen "until the team has been recruited") I'll be pulling my images from Alamy. It's the principle, folks.

Anonymous said...

Lets get with the program Alamy's
60/40 split in the photographers favour was initially quite generous compared to the usual 50/50 split
which was the industry standard when I joined.
Due to a fall in the market we all have to sell more pix just to stand still but I don't want to stand still I want to increase sales in turn this means the agency needs to increase market share and this costs.
This is a partnership and I for one am happy to pay my way !
If you don't like go back to photoshelter !
Sorry I forgot they ceased trading.

DB. UK

Anonymous said...

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