Alamy invades U.S.

Last week the UK-based Alamy stock photo library announced that they're going to increase their commission fees by five percent (thus decreasing photographer's income by five percent) in order to open a U.S. office in New York and start competing for the commercial use dollars which Getty dominates. This has stirred up quite a bit of controversy on many of the photo forums. Not many people are happy that they're funding their American expansion with money out of suppliers pockets.

In particular, John Harrington posted on his Photo Business News blog that he thinks its a terrible move and a cover for CEO James West to shop Alamy around NY and find a buyer.

I disagree, and I posted these comments on his blog post:


John, I politely disagree with you. I think this is a great approach and a good business strategy. Atypical yes, but good nonetheless.

Alamy has a very predictable and ever increasing revenue stream. (Their sales and revenue figures are freely available on their website.)

CEO James West's approach ensures a consistent monthly budget within which to build the New York office. It is far better than raising million of dollars like Photoshelter did and then blowing it all in a few months. Competing with Getty in the commercial use market will take YEARS. It takes years because it's a game of major corporations like Alamy making inroads and preferred vendor agreements with large advertising firms and other major corporations. Longevity is key. As James said in their press release, "Around 80 per cent of our revenue comes from high value, high volume large accounts but we are under-exposed in this market in the US." If they can stay within their budget, then I think this will give them the time they need.

If they can just get a foot-hold, then it's self-perpetuating. Increased revenue from U.S. sales means more money they poor back into the market on advertising and free Martini hours for NY ad execs.

If it fails, so what? It would be an embarrassment obviously, but at least they will not be out millions of dollars in debt.

As far as whether this is a move to shop Alamy around NY and look for a buyer, I just don't think so. The market timing would be terrible and with the weak dollar I don't see any U.S. firms running out to buy foreign companies. I'm sure Alamy is quite a cash cow for its owners.

I also suspect James West thrives on a challenge and competing with Getty and Corbis in the U.S. gives him that. If Alamy eventually gains 33% of the U.S. market, then yeah, he might get bored and want to sell it off and do something else.

For now, I support the move, and I'm not pulling my images.