Alamy's CEO, James West, has posted a blog update which is yet another insight into the changing stock/microstock landscape. He's been talking to UK newspaper contacts, from where he's seen dramatic falls in revenues.
The printed newspaper industry is in terminal decline (or at least significant consolidation) and so, in a way to minimise their cost-base, most picture editors are turning to subscription-based models to source their photography. Alamy see little choice but to adopt a similar model to stay in the game.
Although some comments on Alamy's blog imply it's a short-term over-reaction to the recession and falling advertising revenues at newspapers, I'd say it's a needed change to match the more fundamental shift which is part of the inevitable changes which digital media brings.
As I've stated in an earlier posting, much like the music industry, the production of good quality imagery is much easier/quicker/cheaper to produce and distribute - that will inevitably lead to a fall in price (simple economics). This is compounded by the reduced demand (people are buying less newspapers and want video online) - something which the microstock business model supports. Sure, you still need talent and creativity to generate content, but that talent pool is much larger than before and everyone's got a global stage... close to what economists call perfect competition.
So, Alamy get the thumbs-up from me for not being like the large music labels in the 1990's, hoping digital downloads would go away. Unfortunately for Alamy though, as they'll be squeezed from both the contributer and buyer sides, they'll need to reduce their cut (and therefore costs), but if they follow-through on their need to adapt, they may just survive!