Alamy's Fuzzy Math - when a 10% royalty reduction is really much more

Photo Business News & Forum dissect Alamy CEO James West's statement and discover that the apparent 10% reduction in percentage points represents at least a 17% reduction in real terms. Their article is reproduced below.

Alamy recently announced they would be adjusting the percentage of royalties they would be paying by 10% - in their favor. The reality, is, though, that it's actually going to impact your revenue by much more than that. It is important to note that Alamy pays one rate to the photographer when they have a "Direct" sale via their website, and one rate to the photographer after an Alamy "Distributor" (a.k.a. sub-agent) licenses an image, so both are provided. Here's how their numbers break down:

  Is this fair? Well, it's a business decision. However, let's take a step back. The 50/50 percentage hasn't been fair for at least a decade. Why?

Back in the analog days, it cost money for a New York-based stock photography agency to receive, catalog and store your images. Once that effort was made, when a call came in, for, say, a Time Magazine stock request, an image license for 1/4 page was about $250. There was physical labor involved in locating the image, filling out the tracking sheet and delivery memo, packaging the image for shipping, and then, when the image was returned, confirm the image wasn't damaged, and then re-file it, all for a 50/50 split of $250, or $125 to the stock house. I'll even include a few years where the stock house was converting their libraries from analog to digital, and so they incurred those costs.

Now, it's all digital, with little to no human interaction required, yet not only did the 50/50 split persist, but it's eroding away even further, and unfair.

Now more than ever, photographers need to be their own distributors. You will see Getty Images making a similar shift in percentages in the near future. We'll tell you why, when they announce it.