Adobe has just announced their new software delivery paradigm. A stand-alone program will no longer available in their former CS, Creative Suite bundle singly or as various bundles. They call their new paradigm Adobe CC for Adobe Creative Cloud where bundles or some single products will be available for monthly subscription fee. Anyone who wishes to use Photoshop, InDesign, Illustrator, and so on, will have to pay upwards of $50 per month with some discounts for current users are part of the pricing strategy. The product you choose is still installed on your computer, you download and install it rather than using a DVD. The major difference is the license activation which may be monthly or longer depending on your payment model. That means, at an inconvenient moment when you have no access to the Internet your license may need to be reactivated in order for you to use your product, oh, sorry Adobe’s rental! They argue that there is a grace period of something like 9 days, but what if you had just started a three-week safari in the middle of no where?
When I used to teach various courses in marketing, specifically those related to strategic issues, we used to discuss the benefits of subscription-based models. From an abstract strategic viewpoint many products may lend themselves to this model. But, and there is always a but, any good business model must create a value for the customer in order to succeed. Not to brag, but I say these as a professor of marketing emeritus.
This move by Adobe created a flurry of activity of comments, responses, discussions, and I will add my humble opinion to this opinion soup. You can see the flood of discussion on an Adobe blog by Jeffrey Tranberry. There are many point-counterpoint arguments which I do not want to repeat here. The points I want to make are:
- I consider Adobe Photoshop CC not as Creative Cloud, but Captive Consumer.
- Adobe seems to be focusing on the big corporate users and the “serious creative” types, whatever that may mean and will probably not mind losing those consumers who may upgrade to every new version or may even skip a version in between upgrades
- Their explanations are very self-serving, including the price one pays for this thing. In most, if not all the arguments Adobe staff provide to rebut complains they use the price of the full product purchased for the first time. Most users pay the upgrade prices which are much lower than the full product.
- It should be VERY clear that the discount offered to current owners of CS3 and up is ONLY FOR THE FIRST YEAR after which welcome to the group known as Adobe Captive Consumer, thank you!
- The staff also diminish the unit of measure to daily cost and argue with a line “isn’t it worth $0.33-$0.66 a day for a tool you use?” Quaint, but not robust. The argument for a tool being worth a few pennies ignores the fact that in most trades, the user of the tool gets to keep the tool for which they pay for rather than the tool suddenly vanishing. I wonder if a Snap-On sales person can make this argument to an auto mechanic! After your “inexpensive” daily rental for the tool chest expires it gets locked up!
- The Creative Cloud is a euphemism, the real thing being sold is the requirement for frequent license activations. The additional storage and sharing may not be of much value to most users. This is the real reason, monthly validation of your license, behind this model. That’s why I chose the expand the acronym CC as Captive Consumer not as Creative Cloud.
- Subscription model eventually generates a higher revenue stream for the seller, which is obviously attractive for Adobe. Also this proposed model presents very strong disincentives for the consumers to leave the subscription since cancelling it leaves them with NO product to use.
- The announced business model principally benefits Adobe and creates some hyped up benefits to the consumer, like no need for updates, easy installation, and such. They are all peripheral, secondary, even tertiary benefits. Whereas being left with NO product to use after, say two years of subscription is a VERY REAL disincentive for the subscriber. So my expansion of the acronym Captive Consumer fits very well.
- Yes, there are other subscription based software out there, like antivirus software. But, in that case the consumer is buying only the protection and the software is not used to create anything. Furthermore, consumers can seamlessly switch from one brand to another since the benefit bought is the protection against computer viruses.
- Adobe will do well to reconsider and choose not to force users to this high-cost subscription model. I am including the cost of switching to something else in the cost calculation. If “serious creatives” choose to subscribe to Captive Consumer, that is perfectly fine. But the “less serious” or “less creatives” would very much like to purchase a product and be able to use it for as long as they wish.
- There are subscribers who tout the benefit of the CC, that’s perfectly fine. But there are many times more users who side with the product ownership model. Yes, I know even the DVD delivery does not give ownership of the product, but that legal point is not the essence here.
Clearly, Adobe must have weighed all these points and have found answers that satisfy them. The question is how well the consumers will be satisfied with the answers offered that seem to use, perhaps not wittingly, euphemisms, over simplifications, diminishing the importance of being locked out of software, or will the “less creative” ones will seek other alternatives to satisfy their needs. As Adobe is free to choose any business model they like, so can consumers decide on which company they would like to patronize.
Time will tell.