It's a change in pricing structure. I'm not sure that is a completely different business model. They previously sold yearly upgrades. Now they sell a monthly subscription to give you ongoing upgrades. Not dramatically different.
Also, Adobe's customers were often prosumers, and the $1,500 price point for the product suite is much less appealing than $30/month. Any prosumer can afford $30/month for Photoshop, etc.
Adobe has a monopoly with Photoshop and they basically just raised their prices by going subscription. I don't know a single person who's been happy about it, but they deal with it because there's not really anything they can do about it besides using an older version of Photoshop if they have access.
Not sure why it's surprising at all that they have more revenue. It's not like the people who were using it can just stop using it; it'll take time for an true alternative to come up if there ever will be one.
Exactly. It wouldn't surprise me if the growth in revenue was just more of the remaining holdouts from CS6 (and earlier) finally agreeing to the price increase (by upgrading).
CS6 (the last version you could purchase) is nearly 4 years old now. I didn't upgrade from CS3 (or 4?) until last year.
I've been happy with it. I'm not sure how I follow it being a price increase. I'm paying $9.99/mo with all updates included. Wasn't CS6 $699 when it was released? I don't understand why people are so outraged that a company wants to make money off of software they created.
The $10/month is a good deal.. but if you want any other app, it's $240/year; or $600/year for the suite.
But (previously) virtually no one upgraded every year. The product was good enough years ago, and the features added were rarely more than minor improvements. People would buy the suite, and then use it for 3-5+ years.
With the new pricing, it's like you're forced to upgrade every 2-3 years.. so it's an accelerated upgrade cycle. And that's why everyone thinks of it as a price increase.
I've been happy with it as well. It allows us to support the full range of Adobe products for occasional Desktop Publishing gigs at a fraction than what it used to be.
No one is outraged because Adobe makes money. That's quite a ridiculous assertion.
What some people want is pay once and be done with it. Ownership vs. Rental. When a consumer can afford to own but is forced into rental, then there's going to be resentment. If Adobe had offered a choice, then the number of complaints would be minuscule.
My work is a perfect example. I paid for InDesign years ago. Since I only use it for very occasional jobs, and semi-occasional hobby stuff, I don't need the constant upgrade cycle. Because I bought it, I don't have the sinking feeling of my wallet being opened every time I decide to start a new personal project.
I find Adobe's current model strongly distasteful as both a consumer and producer of software.
As a consumer, the cost of ownership is now slightly to significantly higher over the total lifetime of the software, depending on how often you upgrade. Cost aside, for me it simply doesn't "feel" right to rent software.
As a producer I've put my money where my mouth is. My companies software used to be purchase only (https://www.rackforms.com), though we did add a subscription model around the same time Adobe made the switch. However, I did not, nor will I ever, remove the customers ability to purchase outright.
Just because recurring revenue is good for me doesn't mean it's right for my users. In fact, my "purchase outright" option remains more popular.
I believe if Adobe actually gave users a choice they're data wold reflect mine. They've certainly lost me as a customer until they change course.
>I believe if Adobe actually gave users a choice they're data wold reflect mine
I checked out your site, and not sure if I agree with this. With your pricing a consumer using your product would only have to use it for 5 months before the self-hosted option becomes economically attractive.
To buy Photoshop CS6, alone, would cost $700. Adobe CC prices it at $9.99/mo - meaning you could use their CC option for 6 years before breaking even. In those 6 years, with CC you would get upgrades as well - OTOH even if you were to upgrade every 3 years, you wouldn't break even.
IIRC, Master Collection was $3,000, and is now $600/yr. Meaning if you bought Master Collection you would break even with CC if you only upgraded 5 times a year.
To make your analogy more apt, you should price your non-cloud offering at $600, and then compare how many people prefer it to cloud.
Personally, I think their decision to end their standalone offering had more to do with simplifying DRM than anything.
A great point. I'm actually running a holiday promotion right now, the standard price of our self-hosted package is indeed $599. Oddly enough, even with that pricing the ratio remains consistent. At least half of my users consistently choose the purchase outright option.
No doubt in my particular space other factors figure: For example, to run the self-hosted package requires a web server, a higher barrier of entry, perhaps, than just a machine capable of running Photoshop. It may also be that the cloud service provides a full hosting package complete with cPanel, phpMyAdmin, etc, negating the need to have a standard web hosting service.
I suppose my point is I try and make both packages a great value proposition from a price/feature standpoint. Believe me when I say my life would be easier if I only offered one, but in the end customer choice trumps all.
The most frustrating part of Adobe's new paradigm is they now have zero incentive to continue innovating and adding new features as customers must keep paying to use it, regardless of new versions.
I think it proves that when you a monopoly you can have any business model and succeed and until you have a viable competitor. While amateurs can complain about the subscription model, for the average business customer we are stuck with Adobe. There are a lot of one of apps that are making their niche such as Sketch ever since Adobe dropped Fireworks. But no company has been able to go ahead to ahead with Adobe's full offerings.
Affinity is certainly the world's best hope especially with Apple naming them some of the best apps available this year. In another year or two they could surpass Adobe for small shops but Adobe will still win for a long time because in business you need to hand off files to other people and other companies and they all use Adobe and you can't ask or expect them to use a new product like Affinity's offerings.
However, over time as more people test Affinity and there maybe a chance unless Adobe gets their act together.
If you are using photoshop for web design, consider switching to Sketch 3. I recently made the move and it is not only a reasonable alternative, it is better and cheaper.
It's not just the subscription model that irritates people. The software itself has become irritating in various ways. Creative Cloud is a multi-app hydra that feels like it attaches to your system like a facehugger. Lots of people are looking for and finding exciting alternatives like Affinity Designer/Photo and Sketch. I didn't realize how slow the Adobe apps were until I started using Affinity. Those apps are fast. Not only that, but they are fun to use and got me really excited about creating things again. Super bonus: you just drop the apps in your app folder to install. Boom. Despite moving to the cloud, the Adobe apps feel legacy compared to newer options.
One reason why Adobe continues to make a lot of money is that Photoshop and Illustrator files are like what Word and Excel files are in businesses and universities: currency. People trade these formats around, which makes them way more durable. But that durability can't make up for a more important aspect of some software — especially creative software — whether or not people love using it. Go to the Affinity forums and witness the fire in people's hearts. I imagine there was a time when people felt that way about Photoshop. It's not that I want Adobe to fail. I just want great software.
All I'm saying is: don't mistake Adobe's ability to make money as a sign of love for its products.
Yeah, true. And, of course, Affinity has Publisher on the way next year. It's getting interesting. That completes the holy trinity. But, then there's After Effects. I'm not sure if that app has any serious competitors, now or on the horizon.
26 comments
[ 3.3 ms ] story [ 56.5 ms ] threadAlso, Adobe's customers were often prosumers, and the $1,500 price point for the product suite is much less appealing than $30/month. Any prosumer can afford $30/month for Photoshop, etc.
($1500/$30) = 50 months / 12 ~= 4.16 years. More than 4 years to break even, not including time-value of money.
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Edit: The actual prices are probably closer to the actual turnover for people upgrading Photoshop.
($1500/$50) = 30 months / 12 = 2.5 years.
($1500/$75) = 20 months / 12 ~= 1.67 years.
https://creative.adobe.com/plans?promoid=NV3KR7S1&mv=other
Not sure why it's surprising at all that they have more revenue. It's not like the people who were using it can just stop using it; it'll take time for an true alternative to come up if there ever will be one.
CS6 (the last version you could purchase) is nearly 4 years old now. I didn't upgrade from CS3 (or 4?) until last year.
But (previously) virtually no one upgraded every year. The product was good enough years ago, and the features added were rarely more than minor improvements. People would buy the suite, and then use it for 3-5+ years.
With the new pricing, it's like you're forced to upgrade every 2-3 years.. so it's an accelerated upgrade cycle. And that's why everyone thinks of it as a price increase.
What some people want is pay once and be done with it. Ownership vs. Rental. When a consumer can afford to own but is forced into rental, then there's going to be resentment. If Adobe had offered a choice, then the number of complaints would be minuscule.
My work is a perfect example. I paid for InDesign years ago. Since I only use it for very occasional jobs, and semi-occasional hobby stuff, I don't need the constant upgrade cycle. Because I bought it, I don't have the sinking feeling of my wallet being opened every time I decide to start a new personal project.
As a consumer, the cost of ownership is now slightly to significantly higher over the total lifetime of the software, depending on how often you upgrade. Cost aside, for me it simply doesn't "feel" right to rent software.
As a producer I've put my money where my mouth is. My companies software used to be purchase only (https://www.rackforms.com), though we did add a subscription model around the same time Adobe made the switch. However, I did not, nor will I ever, remove the customers ability to purchase outright.
Just because recurring revenue is good for me doesn't mean it's right for my users. In fact, my "purchase outright" option remains more popular.
I believe if Adobe actually gave users a choice they're data wold reflect mine. They've certainly lost me as a customer until they change course.
I checked out your site, and not sure if I agree with this. With your pricing a consumer using your product would only have to use it for 5 months before the self-hosted option becomes economically attractive.
To buy Photoshop CS6, alone, would cost $700. Adobe CC prices it at $9.99/mo - meaning you could use their CC option for 6 years before breaking even. In those 6 years, with CC you would get upgrades as well - OTOH even if you were to upgrade every 3 years, you wouldn't break even.
IIRC, Master Collection was $3,000, and is now $600/yr. Meaning if you bought Master Collection you would break even with CC if you only upgraded 5 times a year.
To make your analogy more apt, you should price your non-cloud offering at $600, and then compare how many people prefer it to cloud.
Personally, I think their decision to end their standalone offering had more to do with simplifying DRM than anything.
No doubt in my particular space other factors figure: For example, to run the self-hosted package requires a web server, a higher barrier of entry, perhaps, than just a machine capable of running Photoshop. It may also be that the cloud service provides a full hosting package complete with cPanel, phpMyAdmin, etc, negating the need to have a standard web hosting service.
I suppose my point is I try and make both packages a great value proposition from a price/feature standpoint. Believe me when I say my life would be easier if I only offered one, but in the end customer choice trumps all.
Affinity is certainly the world's best hope especially with Apple naming them some of the best apps available this year. In another year or two they could surpass Adobe for small shops but Adobe will still win for a long time because in business you need to hand off files to other people and other companies and they all use Adobe and you can't ask or expect them to use a new product like Affinity's offerings.
However, over time as more people test Affinity and there maybe a chance unless Adobe gets their act together.
One reason why Adobe continues to make a lot of money is that Photoshop and Illustrator files are like what Word and Excel files are in businesses and universities: currency. People trade these formats around, which makes them way more durable. But that durability can't make up for a more important aspect of some software — especially creative software — whether or not people love using it. Go to the Affinity forums and witness the fire in people's hearts. I imagine there was a time when people felt that way about Photoshop. It's not that I want Adobe to fail. I just want great software.
All I'm saying is: don't mistake Adobe's ability to make money as a sign of love for its products.
http://arstechnica.com/information-technology/2014/01/quarkx...
https://www.youtube.com/watch?v=78yigV0GYGQ