Adobe Moves to Subscription Model for Photoshop

[Mike Farley]

At the time Adobe introduced its Creative Cloud subscription service, there were suggestions that there would be a more cost effective package designed for photographers. Adobe has just announced that it is launching a Photoshop Photography Program which consists of Photoshop CC, Lightroom 5, Bridge CC, Behance, and 20GB of storage. The US price is $9.99 per month and assuming that Adobe uses a realistic rate of exchange, that would equate to around £100 per year once VAT is taken into the equation. The price is available to anyone who owns Photoshop CS3 or later and is guaranteed to stay unchanged subject to signing up before the end of the year.

For those who prefer to keep their software up to date, this looks like a good deal and addresses many of the criticisms which were made against Adobe earlier this year. It is probably less than the cost of ugrading on a regular basis, means that you will always have the latest version and throws Behance and a reasonable amount of online storage into the mix. The main downside is not owning the software in perpetuity, but given that the subscription model looks set to stay this is the next best option. Provided the offer is made available in the UK, I shall be signing up.

http://www.dpreview.com/news/2013/09/04 ... =title_0_4

[davidc]

New package announced by Adobe - http://blogs.adobe.com/creativelayer/in ... y-program/

$10 a month for PS CC, LR4 + some other bits.

Sounds good, but you need to own CS3 or above. Otherwise you are ineligible. And Adobe still assume their readers can't do basic maths, £7 a month forever for this deal vs buy lightroom when it's on sale for £60. Hmmm. I'll stick with CS4 and wait for the LR sale thanks!

[Mike Farley]

Interesting to see the Adobe blog pre-announcement of the latest offer reported in the DPReview article I saw earlier today. Personally I am encouraged that Adobe is doing something to support photographers in its existing customer base, especially as the single application option is not quite enough and the full Creative Cloud offering is OTT.

For those who have been keeping with Adobe's updates, this looks like good value, especially when Behance, Prosite and 20 GB of online storage are included in the equation in addition to the two photography applications. Those people could well end up spending less on an annual basis than they would have done had Adobe continued with perpetual licences. Fairly soon, my existing "website" arrangements are going to end and I had been considering Prosite to create a replacement, which would involve some level of expenditure in itself. I'm in.

[davidc]

Still not good enough.

For those of us who don't own CS3 or greater especially. It's a bit of a silly move in my opinion, Adobe knows it has a ton of photographers using Elements and older lightrooms and rather than get them onboard and get money out of them it releases an offer catering for people who have already spent tons. Why limit it's market to just people who have CS3 or above?

[Mike Farley]

Having bought a number of CS upgrades, I would be annoyed with Adobe if I thought that those who had not made the same financial commitment and had only bought Elements suddenly got the same deal.

[davidc]

I don't disagree as a consumer but as a business model they are missing out on a ton of sales from a huge community by making this deal only available to people who, in all likelihood, already had PSCC anyway.

[Mike Farley]

There is probably a more sophisticated marketing strategy going on here than "pile 'em high, sell 'em cheap". Adobe knows that it has a large customer base which has previously shown a commitment to buy what is a very expensive application. It also knows that with a maturing product which in functional terms can be considered complete beyond the odd tweak, the reason why it introduced the subscription model in the first place, a lot of these people would not upgrade to Creative Cloud. With this move, it can appease a customer segment which has demonstrated a willingness to buy and assure itself of future revenues it might not have received. There is always a danger that someone will come up with a Photoshop equivalent targeted at photographers, Elements on steroids if you will, and this helps head off that potential competition.

It would seem likely that this photographers' programme will also be made available more widely at a higher price which the Elements crowd can buy into if they wish. By so doing, Adobe would not have cheapened its flagship product by giving a substantial upgrade to those in the cheap seats. That way, Adobe can maximise its revenues from its vaious markets without giving itself a support nightmare with large number of customers who might not be that profitable. With the subscription model, Adobe is moving from being a software supplier into a service provider and this will be an important consideration.

[davidc]

There is probably a more sophisticated marketing strategy going on here than "pile 'em high, sell 'em cheap". Adobe knows that it has a large customer base which has previously shown a commitment to buy what is a very expensive application. It also knows that with a maturing product which in functional terms can be considered complete beyond the odd tweak, the reason why it introduced the subscription model in the first place, a lot of these people would not upgrade to Creative Cloud. With this move, it can appease a customer segment which has demonstrated a willingness to buy and assure itself of future revenues it might not have received. There is always a danger that someone will come up with a Photoshop equivalent targeted at photographers, Elements on steroids if you will, and this helps head off that potential competition.

It would seem likely that this photographers' programme will also be made available more widely at a higher price which the Elements crowd can buy into if they wish. By so doing, Adobe would not have cheapened its flagship product by giving a substantial upgrade to those in the cheap seats. That way, Adobe can maximise its revenues from its vaious markets without giving itself a support nightmare with large number of customers who might not be that profitable. With the subscription model, Adobe is moving from being a software supplier into a service provider and this will be an important consideration.

It also knows that by pricing it's product too high it's losing sales to a ton of other third party and open source products - releasing Elements shows that. There is a difference between "pile em high, sell em cheap" and losing business with a radically different strategy and then shunning a sizeable portion of the amateur photography market. If they ARE going to create a package targeted at the Elements crowd then setting it at a HIGHER price isn't going to work - the Elements-only consumer has proven they do NOT want to pay high prices. So setting a higher priced subscription to tempt them in won't work when they've proven they are unwilling to spend.

Adobe have it arse about face if they come up with a higher priced package. They should have offered Elements CC and LR5 for $10 and done PS CC & LR5 for $20 a month.

I think it's highly likely that anyone who had CS3 has upgraded since it came out, at least once - you yourself are a prime example - so I still maintain the tactic of giving people who have spent lots on a PS already a chance to upgrade to PS CC isn't going to actually attract that many people. If they wanted CC they'd have upgraded already. If they hate the rental model they'll have left. So it really is a paper fanfare for an offering that really doesn't have much of an audience to hit.

Adobe seem desperate to me.

[Bill Yates]

Mike has read the situation correctly IMO. This latest move by Adobe is clearly aimed at keeping on board those with CS3 and later who may have already lost interest in paying anything more in future than the much cheaper cost of Elements and (possibly) Lightroom. By charging these people a modest annual rental the company is seeking to avoid the possible loss of their custom to the makers of cheaper rival products.

As I see it, Adobe, as the market leader, is facing the same problem today that faced the big traditional airlines a few years ago with the rise of the present crop of budget carriers - how to keep its customer base and still make sufficient money to remain a viable business.

Just how much money it needs to make is an aspect in itself. Clearly there has to be a continuing, assured income that covers its costs. And like any business worth its salt, it has to be looking at the same time for a continuing and assured minimum level of profit. Given this situation, the idea of not having a further tier of differential pricing for those without CS3 and later proving an effective lock-out for such people, as suggested, does not stack up.

The bottom line, surely, is that in business every product or service has its price, whether or not that price is the same as
its perceived worth. If they are the same or nearly so, all well and good, and that is what Adobe has had to consider when fixing these charges and -just as important - and to which and how many of it current and potential customers can it afford to offer them.

Put simply, its what people in big business generally (not just Adobe) call revenue management - where the objective is to generate sufficient income to give the optimum overall return/profit.

Bill Yates

[davidc]

Shame this arrived just as I was leaving work! Still, will give me time to work on a reply