09 Jun 2008 The World is Upside Down

In a move that has baffled people in all sectors of the market, Alamy, the market leading open macrostock agency, has introduced a limited scheme of microstock pricing. It’s designed to compete with microstock agencies without affecting existing macrostock level sales though the bulk of Alamy contributors are upset at their images being available at microstock prices.

The Details

Last year Alamy established their optional Novel Use Scheme without details other than assurance that it was “not about discounting” and “not the same as microstock”.

Alamy has today disclosed details of the first offer to make use of the Novel Use Scheme: a license titled “Limited Use“. To be launched in the coming weeks, the Limited Use license is designed to “let your images compete in the low cost ˜micropayment’ market without undermining your existing revenue streams on Alamy”.

Although the usage circumstances are highly restricted, it permits the image to be used on blogs, on social networking (social media) websites and for certain educational purposes. Prices start at £0.60 for the smallest version (450 x 300 pixels).

The scheme will initially be available only in the UK but will be released worldwide once Alamy are “satisfied with the performance of the scheme”.

Different to Microstock

The Limited Use license is indeed different to microstock licenses as it specifically details the permitted uses rather than detailing restrictions. All the Limited Use uses are for individuals and in mostly non-commercial situations.

According to Jim Pickerell’s post on the announcement, Alamy will also avoid the ‘micropayment’ concept of grouping purchases to avoid high transaction costs. A credit card payment will be required for each sale, even for a single photo at 60p. However, the post also says that Alamy is “willing to negotiate subscription arrangement for high volume users”. As the license is restricted to individuals it’s not clear who those high volume users will be.

Rights Un-Managed

One of the biggest shocks is that Alamy’s Rights Managed images, except those with restrictions, are included in the scheme. Alamy explaines that the need for ease of use requires that “licence terms for Royalty Free and Licensed (Rights Managed) images are the same and not time limited”. This eliminates the control and exclusivity benefits of the Rights Managed license model. An organization who buys exclusive rights to an Alamy image could see that image on Facebook, MySpace, Twitter and an unlimited number of blogs during their license period.

The Reaction

Alamy enjoys a positive reputation as a market leading macrostock agency and is popular among photographers opposed to the microstock business model. The announcement, which many interpret as directly contradicting their previous promises and as Alamy entering the microstock market, has subsequently come as a shock to loyal contributors.

Naturally, they’re voicing their concerns on the forum and in the comments of the blog post where the announcement was made. Many have declared their intentions to remove their portfolios in the face of an inability to opt-out of the Novel Use Scheme until next April.

Given the scheme was initially promoted as “not the same as microstock” but the new details show it’s designed to “compete in the low cost ‘micropayment’ market”, many contributors feel they were misled. The fact that Alamy have assured contributors that the scheme will not “undermine your existing revenue” appears to be little compensation. They appear to be objecting to their images being available at a low price more than any possible affect on their earnings.

The Implications

Will Alamy be able to attract buyers away from microstock agencies? The size of their portfolio, which is currently almost three times bigger than the largest microstock agency portfolio, will help. The relatively restrictive conditions of the Limited Use license will not, nor will their limited payment options. As successful as Alamy are, this announcement doesn’t represent a great threat to microstock agencies.

Will they lose contributors who aren’t happy with this pricing scheme? From the threats in the blog and forum discussions, that looks likely unless they respond to requests to change the offer or allow Novel Use opt-out. Their portfolio is large enough to sustain a large walkout, but the options for their contributors are currently very limited with no direct competitors producing any worthy sales volume.

Other macrostock agencies prohibit contributors from uploading photos which are available at microstock prices, prices lower than their own, or prices below a certain limit. This change puts many contributors in violation of their agreements at other agencies. They’ll need to remove each image from either Alamy or the other agencies if they want to remain compliant with both contracts.

With the simultaneous re-introduction of watermarks on Alamy image comps and previews, the Limited Use license will push some individual users towards paying for the Alamy images they use.

While microstock is now universally accepted as part of the industry, a price and license change this drastic and from an agency the size of Alamy is a clear signal that the opportunity of microstock is also finding acceptance. For the coming weeks there will be few strategy discussions inside macrostock agencies that don’t mention this announcement.