In just one day, the photographic community has been stirred into an uproar over Adobe's announcement to no longer develop stand-alone Creative Suite as we know it and instead move to the cloud-based subscription service that is Creative Cloud. Their response today on DPReview did nothing to quell the furor.
DPReview: "How do you justify the price increase to photographers?"
Winston Hendrickson:"Last year we actually cut the price of Lightroom in half in order to open it up to a broader market of photographers."
That little answer sums up a lot about what is angering people about the intended change in direction. For all practical purposes, Adobe is instituting a price increase despite incentives to lure in early adopters, as the annual rental costs for Creative Cloud will be higher than what the typical upgrade costs of the traditional Creative Suite user. Their non-answer is an answer in itself. A good marketing message would have been either"It's not a price increase and here's why" or "The price is going up and here's what you are getting for it." By not answering the question directly, Hendrikson has all but confirmed that in Adobe's own mind, it's a price increase and by creating the non-sequitor comparison to Lightroom, they're implicetly telling you that you are probably not the CS user that they are looking for. In other words, Adobe is transitioning the hobbyist and casual professional market towards Lightroom and away from Photoshop.
The cold blooded business aspect is that they are concentrating on corporate and enterprise customers, where where the percentage of legitimate purchasers is higher than in the hobbyist market, and where it is easier to use punitive action against illegal users. It's a corporate high level decision for sure... in a difficult market, go for the low hanging fruit, go for the big and easy money first. I'm trying to avoid the cliché of the mindless MBA driving the company into the ground because of the relentless pursuit of profits but... Let me put it to you this way... Product guys are the least incentivised in the corporate hierarchy, but they are the closest to the product in terms of knowing it and how it will serve the customers. Think engineers and programmers; they're recognition is more contingent on the quality of a product than anybody else. Product guys tend to like corporate decisions leading to more features and services. Sales guys are different; they're incentives are more personal and they tend to support corporate decisions that push up unit volumes and that expand customer base, because this has the most impact on personal commissions and bonuses. Executives, however, have a different set of incentives which are not tied into sales, but into the profitability of those sales. They're the most incentivised to make customer-antagonistic decisions... which is what I'm saying is happening here. I have never met a product guy who wanted the company to do something to make the customer unhappy... is all I'm saying. That's not a criticism per say, it's an observation of business life.
quarterly financial report and compare this year to the same time in 2012, you can definitely see a trend towards subscription revenues, but the overall revenue growth is fairly flat.
Twitter, I likened the move to the way that BMW's are sold. Despite appearances, a good portion of high end luxury cars are leased, not sold. While this does open up the bottom of the market for aspirational buyers, explaining all of the 3-series that you see on the road, Creative Suite isn't an stepping-stone model; it's the flagship. Whether or not a BMW 7-series is leased or purchased makes no difference to the person who can't afford it. In other words, the mere fact that you are switching a very expensive product to a rental model does not open it up to a broader market. BMW doesn't have this problem because of the broad base of the 3-Series, but Adobe as we know it can't sustain its industry leading position on Lightroom alone, their reputation was built on Photoshop. That might change in the future; after all Apple is no longer the iPod company. One gets the sense that if this were handled in a better way, it would be a case of "cannibalize your market before others do it for you." It's hard to argue that Lightroom isn't the future of Photoshop, but at the very least, Apple didn't give their iPod customers a kick in the teeth while chasing the more lucrative iPhone market.
In any event, this week's tempest was signalled at the beginning of the year when Adobe "accidentally" gave away CS2 for free. They shut off the authentication servers, but were silent for the good portion of day while the whole internet made a run on their download page. After all of that, they're explanation was:
"On behalf of Adobe Systems Incorporated …
You have heard wrong! Adobe is absolutely not providing free copies of CS2!
What is true is that Adobe is terminating the activation servers for CS2 and that for existing licensed users of CS2 who need to reinstall their software, copies of CS2 that don’t require activation but do require valid serial numbers are available. (Special serial numbers are provided on the page for each product download.) See <http://forums.adobe.com/thread/1114930>."
Which is completely futile, because Adobe gives you the serials necessary to activate a product should you need to. This was such a wasted opportunity for good will. Everybody knows that CS2 is ancient, and what's worse, is that it can't be updated to read RAW files from modern cameras. Since Adobe has signalled hat they aren't going to enforce their copyright, and that they have made access available for anybody, why do they then have to go out of their way to make people feel like criminals for doing something that they themselves have facilitated? They could have introduced Photoshop to a whole new generation of users, users who would then go on to buy current versions of CS. Such a wasted PR opportunity...
In the short term, the internet outrage means very little to Adobe. They're clearly focused on shoring up corporate revenues, and are pretty much signalling that traditional Photoshop is becoming less and less relevant to the mainstream non-professional photographer's market. From a purely profit-driven perspective, it's hard to argue with the business model that they are switching too. (Another car analogy: Acura doesn't car what you think of their RLX flagship sedan... not if you are under the age of 35. You were never gonig to buy that car anyway.) That naturally makes people think of the alternatives.... Capture NX for Nikon users, SilkyPix for Fuji... GIMP for open source aficionados... going towards Aperture and DxO if you are looking for more polish. It's a market full of interesting but imperfect alternatives, which is perhaps all the more why there is so much outrage over Adobe's decision.