Had a great discussion tonight with a bunch of colleagues and one particular topic was brought on by a small statement that Al Mooney said last night at the Atlanta Cutters meeting. It was something along the lines of “as a publicly traded company, Adobe was legally unable to continually provide updates to the users like they will be able to with Creative Cloud.”
That really didn’t make any sense to me, and if you look at the various Creative Cloud discussions most folks there don’t understand it either. “If you can offer it in the Cloud then why can’t you offer it to perpetual licenses?” One of our group who knows more about the inner workings of publicly traded company said he was probably referring to “new features” vs. “bug fixes.” I asked him to elaborate and here’s the gist of what we discussed.
A publicly traded company has to report to their shareholders and there are laws and rules governing the release of products, especially when it comes to “new products” vs. “free updates.”
A “New Product” in the case of pre-existing software would be a new feature. Let’s use the Feathered Crop in the Adobe Premiere Pro CC as an example. That feature does not exist in any previous version of Premiere Pro. So that by legal definition is a “new feature” and as such if you only sell your software with a perpetual license, you cannot simply “give away” this new feature. You must release it with an accompanying fee. It makes no sense for a company as large as Adobe to simply release one new feature and charge all the users a fee. Then the company would literally be “nickel and diming” the user community to death. So instead, you put out an “update release” that bundles a bunch of new features with an accompanying upgrade price. The users finally get those new features they want and Adobe satisfies the legal requirements to release New Features.
A “Free Update” in the case of pre-exiting software would be akin to a bug fix. Something that is an issue with a feature within the application that is not working as intended or is having unintended consequences for the end user. Adobe is free to address those and release updates to address those issues at any time.
A “Membership” / “Subscription” model that does not include perpetual licenses changes the rules and now allows Adobe to release new features as they are ready in order to maintain and grow the membership. Now the onus is on Adobe to give the membership a reason to continue their membership each month and there is no more “ownership” of a product. Adobe satisfies the shareholders by growing the subscription base not by enticing users once or twice per year to pay all at once.
This actually puts Adobe into a greater flexibility position over the other professional software companies that are publicly traded. They can respond to market demands much faster and bring features to the end users that the others will have to wait for their standard “new release with update pricing” model to satisfy the shareholders and legal issues.
Now this is what we discussed and I have not gone in and looked into the actual rules and regulations that govern publicly traded companies, but that’s an interesting spin on the flexibility given Adobe by this one move. This would seem to give even more credence to my recent statement that within 5 years we’ll see all the software on subscription only basis. In today’s production world you MUST be fast and nimble to respond to the ever changing marketplace. Apparently, if only for legal reasons, the Cloud seems to offer Adobe some tremendous flexibility over their competitors.
UPDATE: Thanks to Ryan Holmes for pointing me to the actual legislation that controls what companies can and cannot do for free. He noted that Apple’s App Store and Adobe CC do get around the legislation. Here’s the Wiki Entry on the the law.
What’s preventing them from releasing Adobe CC and the Creative Suite as separate products? Like every year they compile the (current) latest version of the CC apps and release that as Creative Suite 7/8/9, but don’t allow CS users to download the new features unless they pay for the upgrade? Meanwhile CC users keep getting the updates while subscribed.
yes there’s extra work involved here and I can understand how that can slow adobe down from getting updates to even CC subscribers, but I find it disingenuous for them to insist that they’re being transparent and that this switch to CC-only is mainly for the benefit of the consumer, when I think it’s mainly a benefit for Adobe.
I say this as an ongoing CC subscriber; I love CC, it works great for me right now. But I totally understand how it’s not right for many other users.
Just do what they did this past year with CS6 and CC. I don’t understand why it’s impossible for them to keep this model going.
I’m not privy to their internal business decisions but obviously the decision was made to move forward with Cloud only. Personally I think having the two variations of the same product would create mass confusion. Do I buy Adobe Premiere Pro? Do I get the Creative Suite? How is the Suite different than the Cloud? etc….
I’m sure it would have created a product nightmare for them. In business you want to keep things simple. One product lineup is definitely simple.
The Atlanta Cutters meeting was great and informative.Great meeting you Mr. Biscardi and thanks for all you do for fellow editors. I love the CC model I think it’s a net positive. Having access to Adobe’s entire creative suite was unthinkable at one point in time. That said, I strongly feel there is a happy middle ground here. Since Adobe CC is already in the cloud, why not offer downloadable updates as a “New Product?” Existing CS users pay for new downloadable content.
It’s already being done with video games. When I purchase a video game I own it thereafter, new maps, DLC(downloadable content), character items, etc. I am charged a fee. Those purchases are associated with an ID so whenever needed I have access to them. The model already exists, this is not new.
I feel more nickel and dimed not being able to update at my leisure. Right now $50-$79 a month subscription is not cost prohibitive however, with time it will increase. And as a small independent filmmaker, jobs are sometimes infrequent whereas, if I save and purchase a perpetual license I’m always in the game. The issue is choice.
CC is always going to update via the internet, why not offer a fixed solution of paying for the update(new features)? Purchase CS6 if you want a boxed edition and thereafter pay for updates. Therefore at least I have a choice.
As I said in my previous response, I’m not privvy to the business decisions at Adobe and being a publicly traded company, things are not nearly as simple as we would all like them to be. Avid is a great example. Free updates are part of what got them in hot water with Wall Street.
While it seems to make simple sense to you and me to offer the same product two ways, Adobe has their reasons to go Membership only.
Thanks for the response. You’re correct Mr Biscardi I do not understand all the legal and technical wrangling of such a large and publicly traded company like Adobe. However, what I do understand is customer service and serving your client(s). One of your blogs on this site sums up an experience giving a client substandard work or going the extra mile and doing the right thing. Whether you’re a boutique studio, mid major, or major we all do the same thing; serve our clients. This is no different. Many companies large and small suffer or fall by the wayside when they stop listening to the community they serve. For example, Apple’s debut of Final Cut X. Sure there are many professionals using it but, the rollout was a complete fiasco. Now they are adding features they should have included in the first place. I’m sure Adobe has their reasons for CC and I know there is no going back at this point, my only point is if Adobe truly listening and want to serve the vast majority, how about a few options? Thanks
You actually supported my point without even realizing it. The Apple Apps Store allows Apple to circumvent the very laws that restrict publicly traded companies from giving away new features for free. The Creative Cloud Membership model puts Adobe on equal footing with Apple moving forward. Or, in other words, at a competitive advantage against Avid and Autodesk in the near term. Adobe is free to release as many new features as quickly as they please while Avid and Autodesk will have to hold to the regular pattern of one or two paid updates per year.
Near term, all this blowup from the end users is unfortunate and Adobe could have certainly mitigated that with a better transition over to the Cloud only model. Long term, however, Adobe is in a real good position to move all of their software platforms and integration between application at an accelerated pace.
I can honestly say from the standpoint of Adobe Premiere Pro CC, that team completely listened to the end user needs. Yes, choices or options would be nice, but I can completely see the reasoning of Adobe for wanting to just offer one set of products. It’s the end user that will have to make the decision on their own choice because from what I’m seeing from Adobe, they have made their choice and it’s Cloud only.
And getting back to FCP X, that tool is gaining ground and acceptance and we’re seeing almost a virtual replay of how the original Final Cut Pro product line built its user base. So while there was all this uproar and many end users, including this one, left the platform, Apple is finding an entirely new user base to fill the void. In other words, Apple made their choice, stuck with it and slowly but surely, the app is coming back. The big hurdle I see for Apple is the younger generation that I interact with are not embracing the Apple culture, but are primarily on Windows and Android. When you have a product that is limited to just one platform, you really need the user base to use that platform. That’s why I think in the long run, Adobe will have the most market share over the foreseeable future for NLEs and creative software in general.
They’re already Mac and PC and with their latest purchases, I expect major gains in iOS and Android platforms. Adobe has a very long range plan and the Creative Cloud transition frees them up to really execute changes across a vast array of platforms and devices. It’s painful in the short term, beneficial to folks like me in the long term.
It’s up to everyone to make their decision now as to what to do moving forward. I left Apple for first Avid and then Adobe last year and I’m very happy with the direction Adobe is taking me. You as the end user has to decide if the short term pain of Creative Cloud only is worth moving forward and if not, definitely there are some great alternatives out there today. Best!
It seems relatively simple to me… the subscription model is like renting cable TV where you can watch TV shows as they air, and the Creative Suite is like buying a DVD box set of the previous season after they’ve all aired. The box set/Creative Suite only gets released once a year, and it has the latest version of Adobe up to that point, but it’s not privy to updates until the following year when you have to pay for the next version.
With publicly traded companies, nothing is every relatively simple I’m afraid. So many laws and regulations that we can say a big “Thank You” to Enron who was a big part of the changes in the laws. Those laws now affect you and me from the simplicity of offering a software product two different ways.