Features
Interview with Alamy CEO James West
The UK-based image portal, Alamy, recently took the unprecedented step for a privately held company of releasing its revenue figures to the public. The figures show a company on an impressive trajectory having grown total sales from US$129K in 2001 to US$24.2MM in 2006. Founded by its CEO James West and his uncle, Mike Fischer, in 1999, Alamy also manages to dedicate significant sums to medical research and invests in technology to reduce the company’s carbon footprint. We spoke to James West recently to learn more about the thinking behind Alamy’s unique approach to the stock photo business.
abouttheimage (ATI): We've heard vague reports about a new pricing scheme called Novel. Can you tell us where this initiative stands as of today?
James West (JW): Novel pricing will be designed to handle prospective customers with difficult licensing requirements. For example, the high-volume/low price needs that a telecom might have. We’re still a few months away from launching Novel, so we can’t share more details, yet. It’s important to note, however, that participation in Novel pricing will be optional to all our contributors. We’re also looking at licensing images into the low-cost space currently occupied by micro-stock but for limited uses. Not like Getty [iStock], but more controlled by the end-user type.
ATI: Your numbers indicate a strong bias toward editorial sales. Why is this?
JW: That’s deliberate in that the focus of our sales team has been on customers who our product is ideal for; publishers of newspapers, magazines and books, and travel companies; customers for whom finding very specific images is of prime importance. Being encyclopedic is important to these customers.
ATI: What efforts are you or will you make to increase your presence in the commercial market?
JW: It’s important to remember Alamy has as much commercial imagery as Corbis or Getty. We conceived the new annotation [keywording] scheme we introduced earlier this year specifically to make it easier for commercial clients to search through the collections (which we might have communicated better to the photographers.) Plans for commercial depend on how the contributors respond to the new annotation which is about extending the photographers’ reach into the commercial market, but won't alter their position in the editorial market. It’s about enabling better filters for the commercial customer.
ATI: Alamy has made strides in recent years to strengthen its business in the US - how is that going?
JW: The US represents 30% of our business. We see opportunity to expand our business there into the commercial and the editorial markets. Our long-term strategy is to offer a way into customers of all types and all price points.
ATI: Has the micro-stock business had any impact on Alamy and if so, how and if not, why not?
JW: It’s hard to say because we're still growing, though maybe not as fast as three years ago. The rate of signing new credit card customers has been falling which we assume means they're going to micro-stock. Key accounts say they, too, are shopping at micro-stock sites.
ATI: It seems the prices bought on account are significantly lower than those bought on credit card, implying your account managers are doing a disservice to your photographers. To what do you attribute the discrepancy between prices of images bought on account and images bought with a credit card?
JW: Account customers work on contract deals and 70% of those sales are for editorial use. But the credit card customer is generally not an editorial customer but an RF customer. High RF prices put pressure on credit card customers, too. Credit card customers represent only 20% of our sales, so they’re not representative of our average prices.
ATI: Are overall prices actually stable, as your most recent quarterly report implies, or has the weakness of the dollar against the pound only made it appear that way?
JW: The UK represents 55% of our revenue and the US, 30%. (Distributor sales make up the other 15%.) It’s hard to know the exact degree to which the weakness of the US$ distorts our average price figures, but as a UK based company, the numbers are realistic.
ATI: You've recently reached the 10MM image milestone. Do you worry you'll get to a point where you have so many images as to make the site inefficient and the user experience frustrating?
JW: And it can make the experience frustrating for photographers, too. The risk of having clients not find what they need is outweighed by the benefit of always finding what they need. Yes, sales growth has been outstripped by image growth. but that keeps the customers coming.
As for the photographers, those photographers who understand the importance of the tagging will continue to succeed. Alamy is at early stages of offering the kinds of tools that will allow photographers to be responsive to what's happening in the market place. We will soon launch Alamy Measures: a tool that shows contributors which searches their images have appeared in and how many zooms by buyers they have generated. This will show stats only for customers who have spent money. We hope to have Alamy Measure ready for our contributor event at end of November. [The event will take place on Friday, November 23rd and will be broadcast on Alamy’s web-site.]
ATI: What advice do you have for photographers and how they should approach the market in the next few years.
JW: Expect quite a lot of change. You have to think of yourself as a photographer entrepreneur and be proactive in seeing how the images perform and measure up against the competition. Agencies are beginning to understand the power of engaging the contributors in modifying their keywords appropriately, especially in a market that is over-supplied. As ever, it’s important to make sure image is retrievable for the right search. This is not all the photographer’s responsibility. Alamy is at beginning if creating more interactive experience, asking more of photographers, but hopefully this will pay off.
ATI: People talk a lot lately about the shift from print to on-line usage. How has this shift evidenced itself at Alamy?
JW: It has influenced our thinking about what kind of products they need to offer. In five years time we expect the kinds of customers we serve and the way in which we serve them will be different. The anticipated migration of spend to the web is at the same time the biggest threat and the biggest opportunity to a company like Alamy.
ATI: Your biggest competitors have expanded their product offerings by going into other business activities such as micro-stock, stock music, stock video, archive management services, and rights and clearance services. Does Alamy anticipate diversifying its product mix in any way?
JW: We have no plans to diversify in ways that are already out there, but we are considering new business model, but that's very much in the research phase at the moment.
ATI: What's the thinking behind going public with revenue information, now? As an independently owned family business, do you feel that the company can continue to grow like this or would you be looking for investors at some point?
JW: We have no need for additional investment. In fact, we have deliberately avoided that, preferring to grow at a rate that lets the business develop naturally without putting pressure on the balance sheet. We focus on getting the product right and hopefully the business will grow. We’re stable and independent and we have room to innovate and haven't got anyone slowing us down. Another reason for showing our sales numbers is to demonstrate a positive trend to photographers.
ATI: Alamy has made strong efforts to be a green business. Is it possible to focus on the environment and still remain profitable?
JW: We believe climate change is real and it's an issue that all individuals at all levels should address to reduce green-house emissions. The world will suffer profound energy crisis in the long run, but possibly even in the next twelve months, so all companies should work to reduce their exposure to rising fuel prices and increase their ability to use locally generated power.
So at Alamy, we’re moving our data center from London to Oxfordshire into a building that won't use air conditioning, but will recycle hot and cold air from servers at a fraction of the usual cost. We’re also looking installing wind-turbine equipment.
ATI: Have you encountered any not-in-my-back-yard resistance to these efforts and the wind turbine, especially?
JW: If you accept that this is an emergency then deal with it as an emergency. If it turns out to be wrong, great you can take down the wind-turbines. See how things look after ten or twenty years. If we’re wrong about things, great! Take down the turbines. The long term environmental impact is zero of you decide to take it down.
We’re also looking into solar panel on roof. And we’re sending fewer people to conferences in remote locations. We think its great PACA will move back to New York City. We thing all such meetings should take place in major hubs, rather than forcing attendees to make extra flights to far-flung locations. I could go on about it all day...
Web-site: Alamy.com
Posted in: Features, Interviews, Photographers, Stock Photo Companies
