M.Chapman

Alamy Financial Results for 2016 now available

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For those that might be interested, Alamy's Financial Results for 2016 are now available via Companies House here. 

 

Mark

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I am no expert but thougth profits would be a lot more at least they have grown since last year

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It's a tough marketplace. 

Still, they don't have the zillions of debt other large agencies have to struggle with. 

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Approx 100 million images and approx £10 million to contributors ( 50% of turnover).

 

Makes the mean RPI approx £0.10

 

1000 images = £100 a year

10,000 = £1000 a year

 

If my Maths is correct?

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Thanks for highlighting this Mark.

 

I'm not an accountant or a business expert but this looks largely good to me. Turnover up from £14.6m to £19.1m when overall licence prices are on a downward trend suggests a good increase in the volume of business. Cost of sales is £9.9m, up from £7.48m and while not all this will be commission paid to contributors, a good proportion of it will be. They seem pretty chipper about the performance of their India, Australia and USA subsidiaries too. The only little dark clouds I noticed was a disposal of some of its shares in the Manything project at a loss of £1.4m and currency exchange losses of £31,000. All in all, despite the acknowledged challenges of being a stock photographer at Alamy, I feel happier and more hopeful here than in some of the agencies I have been associated with in the past. 

 

Now that I've been optimistic and said nice things abut you, Alamy, can I have some sales, please?

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19 hours ago, geogphotos said:

Approx 100 million images and approx £10 million to contributors ( 50% of turnover).

 

Makes the mean RPI approx £0.10

 

1000 images = £100 a year

10,000 = £1000 a year

 

If my Maths is correct?

Unfortunately it is in my case.

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Thanks for posting this Mark.

This is good news all on it’s own. Consider that some Alamy sized agencies are doing poorly, and it is excellent news.

The write off of the investment in manythings doesn’t tell us much.

The Alamy subsidiaries are introducing our photography to the wider world. I have also heard elsewhere that they are translating the website into Spanish, with a number of other languages to follow. So they keep making investments.

The RPI on average is approx £0.10, but averages can be deceiving in a crowdsourced world. Consider that in stock photography 20% of the photographers make 80% of the money. So RPI could be £0.40 or higher if you are able to get into the 20%. Of course the size of your collection comes into that calculation as well.

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On 12/10/2017 at 16:26, Bill Brooks said:

 

The RPI on average is approx £0.10, but averages can be deceiving in a crowdsourced world. Consider that in stock photography 20% of the photographers make 80% of the money. So RPI could be £0.40 or higher if you are able to get into the 20%. Of course the size of your collection comes into that calculation as well.

The flip side to this concentration of earnings at the top is that if you are average, your RPI is a lot less than £0.10.

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The thing that strikes me is just how slim the margins are at 5.6%. It's good that a large proportion of the cost of sales are contributor and distributor commissions which vary according to the level of sales, but I still fear Alamy is vulnerable in a downturn. If I was the new CEO I'd be looking at the fixed costs. For example the ongoing hardware and maintenance costs of hosting a huge and growing collection of imagery and providing fast access to it. Even if business drops these costs are still there. Alamy hosts lots of images that will never sell or "earn their keep" including; duplicate images, lots poor quality images, lots of incorrectly keyworded images.

 

I'd be considering ways of culling images, thereby allowing the collection of good saleable images to grow without driving up hardware and support costs. It should also improve customer experience by providing faster access to the remaining (good) images. It probably wouldn't be cost effective to do this on an individual image by image basis. But might be possible on a contributor by contributor basis. A sample of images from contributors with very, very poor sales (relative to the number of images) could be scrutinised for the above faults and an advisory email sent encouraging them to make improvements. If no action is taken their images could be removed, or their commission level reduced?

 

In a volume business, controlling cost of sales whilst maintaining or improving quality are key. Unfortunately this could mean that commission payments are also put in the spotlight. With an oversupply of images, perhaps commission percentages should be graded according to contributor performance?

 

Mark

Edited by M.Chapman
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It does make me wonder about dis-economies of scale. Adding ever more images at an ever faster rate than ever brings  ongoing costs as the margins per image become tighter and tighter. 

 

 

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Approximately how many Alamy contributors (with more than 1 image) are there?

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16 minutes ago, Brasilnut said:

Approximately how many Alamy contributors (with more than 1 image) are there?

 

I read, somewhere on the Alamy site, this week, that they represent 60,000 contributors and 600 agencies. I just can't remember where I saw it. Can anyone can confirm this?

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43 minutes ago, Joseph Clemson said:

 

I read, somewhere on the Alamy site, this week, that they represent 60,000 contributors and 600 agencies. I just can't remember where I saw it. Can anyone can confirm this?

 

That's correct. These figures are always on the home page. 

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40 minutes ago, losdemas said:

 

That's correct. These figures are always on the home page. 

 

Oh yes, thank you, now I see it. I hardly ever look at the home page.  Given the round figures and the fact that it is on the home page (which will only occasionally be updated) I guess it represents a slight underestimate on the actual figure.

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6 hours ago, M.Chapman said:

In a volume business, controlling cost of sales whilst maintaining or improving quality are key. Unfortunately this could mean that commission payments are also put in the spotlight. With an oversupply of images, perhaps commission percentages should be graded according to contributor performance?

 

Mark

 

Good point Mark, but then the commission fox is amongst the chickens!

 

The first question a banker will ask is, why do you have to pay the photographer such a high commission? The banker will still ask the question, even if the commission is only 10%.

 

In the days of catalogues photographers used to pay for catalogue placement. Being in a catalogue was very good for photographers. Maybe paying for search position placement by means of accepting a lower photographers commission might be an option.

 

Commission rate could also be used to encourage photographers behaviour. RF instead of RM, POD, better keywording, for instance.

 

There have been suggestions at other agencies that old images that have not sold should be treated like bread beyond it’s best before date.

Maybe delete the old unsold images, but allow the photographer to re upload the same images after careful consideration. Having to go through the trouble of uploading yet again, may sharpen the photographer’s editing skills. The photographer is doing the heavy lifting of editing individual images.

 

The problem with adjustment based on performance or potential performance is it means Alamy having to edit the collection by photographer, which would be a cost that would make their margin even slimmer.

 

Given the content of some of the very large collections Alamy has taken on recently, it would seem that storage space, hardware, support costs, verses photographer performance is not a big concern. YET !!

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58 minutes ago, Bill Brooks said:

Given the content of some of the very large collections Alamy has taken on recently, it would seem that storage space, hardware, support costs, verses photographer performance is not a big concern. YET !!

 

Yes, luckily the cost of the storage is probably falling (per TB) as fast Alamy's collection is growing. Alamy's accounts show that Alamy own just £2.5M of computer hardware (but I'm not sure if they sub-contract the image hosting?). However, maintaining fast response times with a rapidly growing image database and more searching customers 24/7 is probably more challenging. At some point there will be a tipping point where the current infrastructure just can't keep up. The rush to drive sales by adding masses of images (without any restraints on saleability or keywording) will end up costing. Personally I think the efforts of QC should be changed. Instead of doing QC per image on a purely technical basis, it should be QC of contributors themselves. This would include checking both technical image quality of a sample of their images and checking their keywording quality. The idea being to ensure that a higher proportion of the images being added are going to more than pay for their place on Alamy's servers.

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Be careful what you wish for. A POD I supply had a problem with volumes... certain suppliers were uploading designs with every possible Hex colour variation. There were lots of calls for culls ... and then it happened. All designs which had not been viewed within a certain period were taken off the market place. The result was a lot of gnashing of teeth as lots of people who meant other peoples collections saw a lot of their work vanish down the pan. According to their happy-clappy emails I could count myself as a prof seller, but my collection got cut to less than 20% of its previous size. Thats a lot of work down the drain and reason to be a trifle miffed.

 

I am not sure if it is a problem with Alamy. Plus the size and diversity is Alamy's goose which is laying the golden (silver, copper...) egg. An image of something may not have any demand until tomorrow, when (... lightning strikes that particular Church, that particular politician does something silly, a drunken ships captain rams that pier etc etc. )

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21 minutes ago, M.Chapman said:

 

. Personally I think the efforts of QC should be changed. Instead of doing QC per image on a purely technical basis, it should be QC of contributors themselves. This would include checking both technical image quality of a sample of their images and checking their keywording quality. The idea being to ensure that a higher proportion of the images being added are going to more than pay for their place on Alamy's servers.

 

That would be a dangerous game IMO. No doubt, there are plenty of poorly keyworded (whoops, I mean "tagged") images that sell very well, and no shortage of wonderfully keyworded images that never license at all. Alamy would probably end up throwing the proverbial baby out with the bathwater if they did this kind of checking. It would also be super labour-intensive.

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The other 'tipping point' is the fall off in contributor interest - or the interest of sort of contributors that Alamy want to keep interested - when it simply becomes too much effort for too little reward. I am certain that has already been happening for years. 

 

Only a relatively few years ago people would joke on forums about the ludicrous situation ( as it then seemed) of Alamy having 100 million images. 

 

500 million anybody- is it really going to gain more revenue?

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1 hour ago, M.Chapman said:

 

Yes, luckily the cost of the storage is probably falling (per TB) as fast Alamy's collection is growing. Alamy's accounts show that Alamy own just £2.5M of computer hardware (but I'm not sure if they sub-contract the image hosting?). However, maintaining fast response times with a rapidly growing image database and more searching customers 24/7 is probably more challenging. At some point there will be a tipping point where the current infrastructure just can't keep up. The rush to drive sales by adding masses of images (without any restraints on saleability or keywording) will end up costing. Personally I think the efforts of QC should be changed. Instead of doing QC per image on a purely technical basis, it should be QC of contributors themselves. This would include checking both technical image quality of a sample of their images and checking their keywording quality. The idea being to ensure that a higher proportion of the images being added are going to more than pay for their place on Alamy's servers.

I would be spectacularly dischuffed if someone decided to throw away hundreds of hours of my work on a whim.

Fortunately though Alamy's owner is a charity so it doesn't have the same financial imperatives as your average library. That's why we like it and that's why you can get a call from the CEO out of the blue as happened to me the other day. I can't see Bill gates phoning many Corbis contributors.

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Just now, spacecadet said:

I would be spectacularly dischuffed if someone decided to throw away hundreds of hours of my work on a whim.

Fortunately though Alamy's owner is a charity so it doesn't have the same financial imperatives as your average library. That's why we like it and that's why you can get a call from the CEO out of the blue as happened to me the other day. I can't see Bill gates phoning many Corbis contributors.

 

I agree. Alamy marches to the beat of a somewhat different drummer. The culling of images, despite some of its possible advantages, does not fit into Alamy's philosophy and could turn into a disaster for a lot of contributors. Alamy's "come one, come all" approach still seems to be working, warts and all. Best to leave things as they are IMHO.

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Yes Alamy is different and that is its strength. But does it really increase revenue to be adding so many  millions of images? 

 

A few years back with 50 million fewer images Alamy turnover was much the same - still down from the close to £30 million before the 2008 crash when it probably had 5-10 million images.

 

Is piling up an ever large pile, more and more, up and up, and tinkering with search algorithms  to try and manage the situation going to make sense forever?

 

I wonder if it is going to become unsustainable and rather purposeless. It no longer seem revolutionary, just what Alamy is and what it does.

 

Not sure when or what but something is going to have to change. 

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4 hours ago, geogphotos said:

Yes Alamy is different and that is its strength. But does it really increase revenue to be adding so many  millions of images? 

 

A few years back with 50 million fewer images Alamy turnover was much the same - still down from the close to £30 million before the 2008 crash when it probably had 5-10 million images.

 

Is piling up an ever large pile, more and more, up and up, and tinkering with search algorithms  to try and manage the situation going to make sense forever?

 

I wonder if it is going to become unsustainable and rather purposeless. It no longer seem revolutionary, just what Alamy is and what it does.

 

Not sure when or what but something is going to have to change. 

 

Probably not more revenue for the majority of us, at least not significantly more revenue.

 

Yes, it would be encouraging to see a road map of some kind. Hopefully one is in the works.

 

Nothing is forever...

Edited by John Mitchell

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10 hours ago, geogphotos said:

Yes Alamy is different and that is its strength. But does it really increase revenue to be adding so many  millions of images? 

 

A few years back with 50 million fewer images Alamy turnover was much the same - still down from the close to £30 million before the 2008 crash when it probably had 5-10 million images.

 

Is piling up an ever large pile, more and more, up and up, and tinkering with search algorithms  to try and manage the situation going to make sense forever?

 

I wonder if it is going to become unsustainable and rather purposeless. It no longer seem revolutionary, just what Alamy is and what it does.

 

Not sure when or what but something is going to have to change. 

 

It does feel like "pile 'em high, sell 'em cheap" strategy. Then along comes a more efficient operator who offers better service at lower prices....

The current approach is currently helping Alamy to keep it's head above water, but it's having to paddle faster and faster. The fact that Alamy is surviving in a competitive market is good for us. But, before too long, I feel sure Alamy will need to drive down their costs.

 

OTOH The new search engine now seems to be working well and Alamy has a great diversity of images. :)

 

Mark

 

 

Edited by M.Chapman

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I've noticed that some agencies (won't name them here) have started offering a bespoke service to clients where such clients publish a detailed brief and photographers bid for such projects. The agency acts as the intermediate.  

 

Perhaps this is a business model that would attract Alamy and also please clients. Any thoughts if this would be popular on here? Of course this would only work for traditional commercial stock and not editorial.

 

Seems to be the way the market is heading by offering clients exactly what they need in a time since many complain that it's exhausting having to dig through increasingly large (and irrelevant) search engines. 

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