Larry Jordan's 'rant' on Adobes subscription model,...

larryjordan.com/blog/the-darker-side-of-subscriptions/

For those of you who ar NOT at Twitter (like me), I just recently found this article on Larry's blog.

Three interesting, first hand observations.... and, typical Larry: suggestions for improvement.

What a shock:

"…As I considered canceling my subscription I realized that I would lose access to hundreds of gigabytes of existing data. …"

In Larry's case, this touches the core of his business (love his suggestions of a free 'reader'…)
Mark Spencers comment: "That's why we don't do it!" Thanks for that, rippletwins™…

… has any smart advocat shine his light into 'ownership/copyrights/accessability' of those issues....?
just saying....

First ... Larry Jordan is extremely laid back ... even his 'rants' are quite cordial

The two major flaws with SAS (Software as a Service) subscription business model for content creation software is:

1. Subscribers are forced to underwrite future development before they get to see if the new features, enhancements and additions are truly worthy of investment.

2. They can lose access to view, export proprietary files created by those apps or otherwise utilize the work accomplished under the subscription model on the day the subscription expires.

While it is true that users do not lose the original content used in creating those final works, they do lose the very important and valuable work accomplished to prepare those files for final delivery.

If Adobe had offered some sort of exit strategy with the introduction of Creative Cloud, I very likely would have bought the complete package and never gave Final Cut Pro X a second look. But, as Jordan has discovered after the fact, the perils of SAS, was a huge stumbling block for me when appraising the risk of subscription. Thankfully, I am much more pleased, and have substantially more cash in my pocket for adopting FCP X.

Conversely, after Adobe saw their way to include a reasonable measure of exit strategy for Lightroom, I did adopt the Photography Package subscription. I have been using Photoshop since 1992, and Lightroom since it's release in public beta in 2006. Though I also used Aperture 3 quite extensively as well.

If, for any reason, I should decide to cease my subscription, I can still view, print and export images from Lightroom with all the previously applied settings. If Adobe should ever remove this capability, I will drop the subscription instantly.

Why they haven't offered this for Premier, In Design, and their other apps that produce completely proprietary files baffles me. IMHO, doing so would bolster subscriber confidence and their ranks overall.

I do believe there are areas of interest for content consumption where a subscription is a bona fide asset to both the end user and the provider. Magazines, TV Cable, Hulu Plus, Netflix, Lynda.com and even Larry Jordan's fine Library ... for content creation software without an exit strategy ... even in a professional environment ... not so much.

Many of us pointed out these exact same point when Adobe went subscription. This is not new, and doesn't matter to an office manager, or school, until they have to reduce seats, or cancel. THEN it becomes an issue. I strongly disagree wth Larry, in that I've yet to see where a subscription for software applications helps anyone but the developer make more money. The facts he points out are not news, just new to his office.

1. With all due respect to Larry, this was never sprung on him. This info is known going in if you pay attention. It's an annual subscription with reduced rates based on a full year's commitment. Plus, I believe he had a team account for 'x' number of systems, so making a change there mid-stream requires some financial adjustment. The same deal happens when you try to restructure your cable TV bill.

2. You aren't fueling future development any more than the previous model. Before, the Master Collection was $2600 up front. Now, the equivalent package is $50/month (annual) to start. How is that paying for future development?

3. You don't lose access to your project files, other than the app doesn't open if you are inactive. However, let's say you need to re-edit a project 6 months after stopping. Simply renew for one month only at $75 and get the job done. Or go to a friend's system with an active account and do the job there. Ideal? No. Possible? Yes.

4. It's unfair to compare this business model in any way shape or form to Apple's, simply because the cost of Apple software development is underwritten in part by the varied strengths of the company overall, especially the iPhone. If FCPX were from a general software company in the Windows world (as an example), I highly doubt they could sustain themselves on a one-time purchase price of $300.

5. There are plenty of examples of subscription, with much the same implications as Adobe's model. Such as DropBox, Frame, Wipster, Sapphire, your web host, your cable bill, etc.

I'm not saying Adobe's approach is perfect and I'm certainly no fan of the subscription model either, but that's for personal reasons. If I were a production company or active facility, it would make a lot of sense. However, going all "I told you so" doesn't really reflect the real world, where the model works perfectly well for many of their customers.

- Oliver

Oliver Peters wrote: … going all "I told you so" doesn't really reflect the real world, ...

indeed.
"I told you so" does add nothing to a discussion, any parent subscribes that, LOL ...
And I wouldn't insinuate, Larry was too dumb to reflect what a subscription means to his products. :blink:

I found it interesting, that a 'heavyweight' like him came up with that (old) discussion, basically it's about formats, proprietarysm (English?), compatibility, licences, ....

… and rights.
Still fail to find a similiar structure in real life ... like:
I'm crafting a table, and the maker of the saw doesn't allow me to show, not to speak of to sell that table (???)
Weird.

I am going to take a guess and no one read the comments, my 2 comments about Adobe... I know I sound like a madhatter, maybe I am, but my comments in this blog by Larry I stand by 100%

SAS, software as a service, never heard that before, and now that Smile-textexpander, has gone the same route, I saw quite a few angry comments about this.

In the case of Adobe, I asked the question is Adobe a ponzi scheme, as it has all the markings of being one, a stagnant pool of subscribers, not much growth, a very high rate of piracy, I understand that in many cases, the torrented illegal versions give cloud access, and if this is indeed true, then Adobe has a serious flaw, more uses than paid users, never a good idea from a business point of view.

Adobe sells very few products, it is 99% rental, and as was the case in almost all ponzi schemes, when you have a stagnant influx of new users/subscribers/investors, you need to engineer ways to generate income, and Larry's case proves this, how do you engineer income from a stagnant subscriber base? Through high penalties or exit "tax".

Why Adobe has made the decision to not sell stand alone copies, the reason couched in terms of preventing piracy is absurd and does not make sense, Apple and every producer of anything binary is prone to piracy, the cloning of data is easy if you know how.

So the decision to suspend/cancel box sets, speaks to another reason, a failing financial system at play at Adobe, the subscription model makes no sense, it basically promotes piracy, and illegal access,

Larry suffered and is right to feel burned by the high exit "tax" he had to pay, as I stated in my first comment, Adobe suffers no loss when he leaves the service, Adobe suffered the loss already, and is using the "tax" to mitigate this loss.

Think of a new gym, it opens, with new equipment, treadmills, weights, showers, lockers, it hopes to offset this loss by selling subscriptions, through gym fee's, the more users that sign up, the quicker the return to profit.

When the gym user leaves, he does not add to the expense, just lengthens the time to profit, the loss, in terms of equipment,staff, is already in place, and a very tiny expense per user yes does occur month to month, but not to the degree Adobe claims.

Subscription to a service in some cases makes sense, to newspapers, magazines, hulu, netflix, that have more than 1 income stream, that to a large degree cross subsidize each other, the fee from subscription+from advertising leads to offsetting expenses in buying programming rights.

Adobe has only 1 income stream, subscription, combined with almost zero new users and a slow trickle of users leaving, and huge expenses in terms of software development, maintenance of cloud access, how long can Adobe continue along this slippery slope downwards???

Apple has many income streams, so a loss on one project will not affect many others, with Adobe this is not the case, I would love to buy a box set or a single app without cloud access, I cannot see faults with this option, Apple does not demand of FCPX cloud access so why does Adobe think this the only way to operate...

Essay over!

MsJustine wrote: …Essay over!

I'm sorry to say Justine, but that is an incredible narrow sight… :huh:

Adobe was historically and is, first of all, print tools.
A more-or-less monopoly in pre-print with its state-of-the-art products. Creating print, pre-processing, sharing.
Secondly it's document-management, pdf is just the tip of the iceberg...
Thirdly, step into web-age... AFlash was an adventure.....

Premiere is hobby... it is famous for us Mac-users, because it is the remaining track-NLE; Edius, Avid, Vegas are huge - but outside MacOS, plus zillions of others, Magix, Pinnacle, Lightworx. Adobe could stop Premiere instantly without losing business ...
It's a 'free' add-on in its suite of print-apps, a toy in a cerial box.

What Adobe/video is really good in, without any doubt nor sarcasm, is AfterEffects! = Photoshop for moving images. But, again, outside MacOS there's Fusion, Nuke. etc... Again, when Adobe would axe AE, would be a loss, but not financially for Adobe..

Finally, you do get boxed Adobe products - the /elements line.
APremiere/e is a powerful NLE, offering much more eyecandy than iMovie (tracking as an example)
APhotoshop/e is a powerful lil' brother of all' mighty Photoshop

sorry, but your asumptions about Adobes core business model is a bit belly-buttoned.......

When a business opens, they take out a loan, or get investors to "invest" capital. The "gym" takes in money, part of that pays bills, part pays off the "loan" for the capital, and the rest goes to payroll and investment/savings to build the business bigger in the future. None of that is a "loss", it is "investment". Huge difference when talking business. A business "loss" is when the income doesn't cover the loan payments, payroll, bills, etc, after the fact. So a business can take in a profit from day one, if the money is managed properly. All mine did throughout my life.

PPro is a money maker, the subscription model only insures Adobe makes more money long term. If a post-house is a long term success, Adobe make more money off them than simply selling a license right off the bat, as most others are doing now.

The new subscription model is based on "working in the cloud", where you pay monthly for an ongoing cloud service. You don't buy a license to have so many seats of an application installed on your local machine. You pay monthly, and the cloud makes that software active each month. It is always linked to some other cloud services, justifying why installing an application physically, like you always have, means you have to pay monthly like you do for a cloud based application and/or service.

I love reading how some folks seem to KNOW exactly what is going on behind the scenes of corporations they've never had any internal dealings with, nor have spoken to anyone internal to that corporation. But I guess we all like to speculate. Neither Adobe nor Apple has financial worries. Avid is having issues, but will be around for a long time anyway. And no one cares about any other NLE, seriously.

As for "real life"? Lots of real life comparisons. I have been renting two storage units since 2005, right after my mother died a few weeks before Katrina. Once I finally got rid of, or used, her stuff, my father died. So I filled them up with his stuff. 2015 I finally get his stuff taken care of, and am ready to stop paying rent on storage units. I empty them both on the 10th of the month. The owners have a policy of no partial month refunds. You pay a whole month, you get a whole month, you empty mid-month, that's your business. So I paid a whole month, for only 10 days of use, even after being a consistently good customer or a decade.

Publications put out NEWS, new information every month, something new, so you pay for each edition they deliver, every month. New edition, new information, new experience, every month.

An application only gets updated once, twice, maybe three times a year. And you don't always get something "new". And it still does the same job, the same work, the same "information" year round.

I think comparing the two is apples to onions. IMHO.

Oliver Peters wrote:
2. You aren't fueling future development any more than the previous model. Before, the Master Collection was $2600 up front. Now, the equivalent package is $50/month (annual) to start. How is that paying for future development?

The point wasn’t about the amount of underwriting, but more importantly when it was paid and if the subscriber could speak with their wallet if they desired to support the development before the payment was made.

Prior to CC, the vast majority of income for Adobe came from a merit based method. License holders were not required to update each and very version (until the introduction of CS6). In those days, new versions and feature sets had to prove their worth in the marketplace … now, subscribers must tacitly accept whatever comes their way.

Secondly … yes the Master Collection was $2,600 for the initial full version buy in … but upgrade versions were more affordably priced and nearly in line with the whole-enchilada $50 per month rate … so the amount of dollars spent were much closer than you portend.

3. You don't lose access to your project files, other than the app doesn't open if you are inactive. However, let's say you need to re-edit a project 6 months after stopping. Simply renew for one month only at $75 and get the job done. Or go to a friend's system with an active account and do the job there. Ideal? No. Possible? Yes.

Possible? Ideal? … Maybe so … but with a perpetual license, those issues are of little concern where perpetual licensing is concerned because there is no chiseled in granite expiration date. I fail to see how files held in ransom is an acceptable business model.

4. It's unfair to compare this business model in any way shape or form to Apple's, simply because the cost of Apple software development is underwritten in part by the varied strengths of the company overall, especially the iPhone. If FCPX were from a general software company in the Windows world (as an example), I highly doubt they could sustain themselves on a one-time purchase price of $300.

Well … in ‘fairness’ … Adobe also does not derive all of it’s income from software development. Plus there are many software developers that can and do sustain themselves on on-time purchase price points … some far below $300.

5. There are plenty of examples of subscription, with much the same implications as Adobe's model. Such as DropBox, Frame, Wipster, Sapphire, your web host, your cable bill, etc.

Yes, there are similarities in other subscription models. However, beyond some of the contractual fine print and monthly billing cycle … there are some very important differences. You can’t truly compare a real ‘service’ for SAS … Dropbox, for instance is a true service, not SAS.

If I should decide to cease using Dropbox for Business and use a competing cloud service, Dropbox does not hold the files I previously stored on their servers or lock them in a proprietary package that requires me to pay them for the privilege of viewing and/or exporting those files. Unless you can point to another app that can open Premier Pro files … the similarity is quite constrained and certainly not universal in scope.