James West is co-founder and CEO of the unusually refreshing Alamy, the largest stock photography site on the internet. He speaks passionately about energy issues and is fond of giving solar flashlights to friends and business partners (Alamy purchases enough of them each year to offset its carbon emissions). ADC sat down with James to talk about stock imagery, Alamy’s push into the American market and eco-conscious companies.
The ADC has its 90th anniversary coming up, and Alamy just celebrated its 10th. What were your thoughts both looking backwards and forwards?
The honest answer is that we didn’t really dwell on it that much. Ten years was sort of symbolic and worthy of reflection because it was ten years of our lives. A lot of people at the company have been with us right from the start. And so, across the main management team at Alamy we’ve got 50-60 years experience running our business – person years. That’s a huge amount of time collectively. We kind of feel, though, that this is still a work in progress, and although that sounds strange since the company is ten years old, we still feel quite young. So we’re still learning a lot, we’re still very motivated, we still have that kind of combination of fear and excitement about the future that we’ve always had from the start. I guess the difference now is that we have the luxury of some resources – things we didn’t have at the beginning.
You had a lot of staff still stick around. I’m sure that helps, having your people really know the business.
We’ve gotten a lot bigger than when we started, but the management structure at Alamy is pretty much unchanged. So most of the people who run the various divisions that make up the business have been with us since 2000/2001.
You guys are up to 20M images.
Close to, yeah.
What’s the curve for acquiring images?
Well it’s about… it fluctuates. Because every now and again we’ll get a large collection come in, but in general it’s about a 1/3 of a million pictures added to the site every month. And that’s pretty constant.
Having worked in content before, I need to ask: How do you filter out the crap and how does the high quality imagery rise to the top?
So we employ two techniques, neither of them conventional at the time, and in some respects not really followed much today. Firstly, we have a very light editorial touch. As in, we don’t make any decisions on behalf of the content owner as to what they should submit. But we do enforce quite tight technical standards on our suppliers, so everyone who uploads a high-res file to Alamy must meet our quality control standards – which is about the integrity of the digital file. And then, other than pornography, anything they want to send they can send and we’ll accept it. That has led to an explosion in the number of images on the site, and with that goes some risk that you may douse the customer in lots and lots of irrelevant material. So we have a second prong for dealing with that. That is a thing called Alamy Rank, which is basically a quite brutal Darwinian system for penalizing images that underperform when they’re seen by customers relative to those that perform. And in particular, one of the common issues with a site like Alamy is that if your suppliers are doing all their own editing and all their own keywording, then they can dump a dictionary into every image and be seen on every search. So we have a built-in system to protect us from that strategy, which some suppliers might employ, which is that if you’re seen a lot on Alamy, but you’re not clicked a lot, it hurts your score. So you could if you’d like, put an image of a dog up there and keyword it ‘cat’, and it will be seen for every time that someone looks for cat. But in the long run the system will penalize you and lower your score and you’ll start to drift down to the back
And you’re open about this with your users
Yeah, the algorithm is shared in quite some detail with our photographers, and so everyone is aware that it happens. It’s updated every month, so it’s quite an impressive algorithm. So that’s the underlying filtering that’s going on. There’s then several other layers of sophistication we’ve introduced to deal with the hierarchy of the keywords and so our photographers know that of the three major keyword fields that they have to fill in, the first one which is very short is the thing the search engine pays most attention to. And in fact the first word in that sequence is the most important. So it really forces you as a photographer to think about what is the most important component or components of this image, and then I can make sure that those things are put upfront. So there are a few things you can do
Photographers are notably hard to pin down on these type of things. Do you work with a lot of reps too, or is it mostly direct from the photographers themselves?
Well 60% of our material is from photographers themselves, and the rest is from collections – that’s either other stock agencies, or national collections; we have national museums and various non-profit collections and corporate collections. So it’s a real mixture.
Your commissions to your photographers are notably high, what prompted this business model?
Well, Alamy was started with a couple of things in mind. We saw a couple of opportunities when we started the business. One was that photography was not yet digital, but was clearly going to go that way. And as a medium, was going to be one of those business that would be revolutionized by the Web. So when we started in 2000, that was already starting to happen, but the content was not yet being shot digitally. And the other thing was that the cost of storage was roughly halving every year and doubling in capacity. So there were lots of indicators that this is a business that would scale very nicely in time, because there were these natural phenomena. It was just going to get easier to be in digital content. And within that, we wanted to create a trading environment that was really a no-brainer for would-be suppliers. So basically the proposition to photographers was: ‘why not?’ Once we’ve convinced you that we’re a legitimate organization that’s going to take care of your copyright and be diligent with our business, then you should put your images with us. Because in fairness, we pass on quite a lot of those costs to the photographer. As a supplier to Alamy you don’t get the service you might get from a conventional stockhouse, where they might keyword and edit for you. We don’t do any of that, so we pay you a higher royalty as a result. But we’ve stuck with it. So although the market has shifted more towards our way of doing things in recent years, we still feel that having the most generous commission helps us in the long run. If you have a motivated supply chain, you have a stronger product.
Why do you think the market shifted towards your business strategy?
Well because in the sectors that we’ve become quite successful in, it is the range and breadth of Alamy’s collection that’s worked for us. And that’s only been possible because of our open access model to photographers. So the aspect of our business model that has been taken on by others is the light editing, and in some cases letting the keywording being done by the suppliers. There hasn’t been so much interest in aping our royalties.
Alamy is very into philanthropy – you’re eco-conscious, you have an outstanding record, donating at times 80% to medical research?
Well, 89% of all our profits since 2004 have gone into medical research
What brought this on?
It’s a hybrid model. So the recipient of the charitable donations is a medical research lab that is running as a charity, i.e. non-profit. But it was setup and is operated by my cofounder, and Alamy’s chairman, Mike Fischer. And he is passionate, big-brained… I suppose he’s a polymath really. He’s an engineer who’s very good at solving problems, and he’s very interested in medicine. Alamy owed him some money from the money he originally invested in the business, and rather than have it paid back, he just asked if we could donate the cash to some of the research. So we have physically in our building a laboratory where all this money goes. So we pump the money downstairs and they pump the fumes upstairs.
Was the solar flashlight your project?
We don’t make them, but this is Sun Night Life. They’re an amazing company. They’re a US organization based I believe out of Houston, Texas. Set up by a guy called Mark Bent. He developed the idea while working in the US defense department in various roles, so he traveled around the world. His experience was that in some parts of the world there’s no light after dark, and so he developed this idea of getting people to donate lamps to these organizations. Our interest in this is actually very much around the global warming side. If you take where we have our office in India for example: outside of the big metropolitan areas, most households get their nighttime lighting from kerosene. Most households in that part of the world send their kids to school, their kids read under lanterns – it’s a huge source of breathing difficulty, long-term health risks, burns are big issues, and it consumes a whole lot of kerosene. May cost a family roughly several dollars a week. It’s very inefficient. So the attraction of this light was that it was a way for us to quantify a carbon offset scheme that was a very real thing. It wasn’t some nebulous, plant-a-tree and wash away your guilt. We work exactly how many units of CO2 we produce a year as a business, right down to the kilowatt hours we measure. We measure every single electric consuming device in the business and we calculate all the flights we take (we differentiate between long-haul and short-haul). We add it all up and we give ourselves a number of lamps each year to buy. It’s our own personal Cap And Trade, and it is remarkable how it focuses the mind on energy efficiency when you start to realize how many of these things we’ve got to buy to offset your emissions. It’s nice to be doing something with a tangible output in that area.
In conjunction with that: is it hard to concentrate on doing good ecologically and contributing to medical research, while also doing good business? Is this a responsibility of modern companies – to be good citizens?
Well I wouldn’t go so far as to say it’s the responsibility of modern companies. I think though that there are a lot of people in the world particularly people in business who may on occasional days wonder if they could be doing something more meaningful with their lives. The trouble is, business is addictive – it’s really exciting, really creative. And lots of good minds sort of get put into that. A lot of businesses have an output that in itself is very beneficial to the world. In our industry, selling pictures, it’s a fun industry, it’s a non-polluting industry, but it doesn’t really make the world a better place, and so having the opportunity to sponsor some projects that might one day manifest themselves as significant is a great luxury, but a luxury really only afforded to a privately held company. I mean – it would be very difficult to do what we do if we were bigger or somehow under other stakeholders in the business. I think it would be harder. Now that’s not to say we wouldn’t chose to do it in our spare time still. And these programs don’t consume much of Alamy’s time, so the labor is entirely independent. It’s just a check that gets sent twice a year. The solar flashlights are largely organized by the staff in their spare time across the business. And I spend one day a week working on projects other than Alamy. And I’ve been doing that for 4 years. In some ways having these extra things to do forces you as a business to be much more organized. Obviously, you’ve got to keep the wheels turning under your main enterprise.
Exactly – I was going to ask how you split up your time to juggle all of these
We’re talking about these things today so there’s quite a lot to say, but actually day-to-day there’s not much to it. There’s a burst of activity to define the work and get it organized, but again it’s a luxury you have as an organization of a certain size. When you hit certain headcounts, you’ve got lots of talented people in your organization to help you get these things done. Usually it’s the setup; maintaining it is relatively low resource.
I know you have a lot of pride in both the size of your library and the quality of your custom search engine. With these advantages, why are you the David, not the Goliath of the stock photo industry?
Well, we are the Goliath in terms of the size and scale of our inventory. But we’re very much the David in terms of our market share. And that’s what really matters to the audiences we serve. And I think it’s a fair criticism of Alamy to say that we have been underrepresented in the US market. You know, for such a compelling business, why aren’t we better known? The honest answer is we’ve gotten away with it. We’ve had tremendous growth in the first 10 years of our lives – we had a hiccup in the recession like everybody else, but it hasn’t destroyed us – and we were able to enjoy year after year growth across the business without trying very hard as far as spreading the ground. But actually we’ve come to realize that the US market is so enormous, and we’re such a small part of it, that even though it makes up nearly 40% of our revenue today we are essentially unheard of. That’s an area that we think we’re very much the David, and we will milk that to our advantage until we’re Goliath!
How much of your business is random web purchases, and how much of it is you forging personal relationships with businesses?
It’s close to 70% of what you might call ‘high-touch’ business – so account managed. Although the customers are performing much of the searching and downloading involved there’s still an awful lot of contact between us and the customer. And that was really the drive of opening a sales office here in Brooklyn. We kept hearing from customers, “we love dealing with you guys, and it’s nice to talk to someone with an English accent every now and again, but what I really need is to be able to pick up the phone and get a hold of someone now.” And we don’t see that changing – obviously the world is moving more online, people are having to do more stuff themselves, but the big picture is that there’s still the need for contact among human beings and businesses, especially at the high level, where you’re dealing with large contracts, big long-term commitments, high-volume relationships – there’s no way you can automate that… thank goodness!
ADC has a membership of Advertisers, Designers, Art Directors… why would they be interested in Alamy?
We already do quite a lot of business in that space, and I think that there’s a story to tell about Alamy that we’re still trying to figure out the script for. But it’s essentially that we are a library of images that’s unprecedented in size and diversity, and we represent a way of doing business in this industry that is quite unique. Which is that anyone can participate who’s got pictures to sell, and if you participate we’ll return the intellectual property owner a higher royalty than anyone else. By buying pictures from Alamy you’re taking part in a business model that is different and quite sustaining as far as the long-term returns for the suppliers goes. Having said that I think we’re still somewhat of a niche. Although we have all of this content, we still see ourselves as particularly strong in certain areas, like the weird stuff, travel, wild life, objects, archives, sports – all that kind of stuff. We are less competent at the high-end contemporary life-style. We have it there, and we’re trying to figure out how to do better. And one of the reasons I’m over in the US at the moment is I’m just going around talking to our art buyers in these above the line advertising agencies and asking them: how Alamy is doing, what do we have to get right. And the answer is basically we’re doing okay, but we’ve got to do better in the high-end lifestyle. So that’s our big project right now. So we’ve signed up 70 of the top US stock photo shooters under NDA, and we’re working with them to develop some image for Alamy that will make us more contemporary for the lifestyle stuff. But that’s probably a year away. So we’re here, we’re hoping to enter a relationship with ADC, and that’s really the starting bell. And we’d like to come back to this market in a year’s time with the next phase of delivery.
How did you hear about ADC?
Well we’ve known about the ADC right from the start. I mean it’s one of those organizations you can’t help but hear about when you’re in NYC and you’re talking to creatives. And in fact we had worked together with you guys I believe as early as 2002 on a portfolio review. But I guess we were just too shy to approach you formally.
You said you were making a push into video, what’s new on that front?
Yes, what’s new is that we’re going to have video up on the site by the end of the year. So we’re working with some suppliers at the moment to get some content in and start manipulating it and working out how we’re going to handle it. And we’re also talking to some very exciting prospective suppliers of content. So we think we’re going to bring something to video that has not yet been done, along with all the regular stuff. So watch this space: Alamy mach 2 in video.
And we can expect this by year’s end?
Yeah, the year’s end will be the first product launch and then the content will grow from there.
Is there anything else on the horizon you’re really excited about?
I’m pretty excited about the US market. Excited to see our sales team – we’ve doubled the size of the sales force now, in recent months. And although it is possibly the most scary time in our lives to be doing business in the world right now, we do see quite a lot of opportunity amongst all the uncertainty… actually it’s quite a good time to be a David.