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Evidently, some of this is quantified.
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[Jeremy Garchow] “Moviepass makes money when a lot of people pay to go to the movies, but don’t use it.”
I agree that the quote in the original article is oddly transparent, though the idea isn’t new. Whether it’s a season pass to Disneyland, a subscription to Netflix or a cellphone contract, the concept that most customers won’t use what they are paying for is the crux of the business model. For people that do use the service enough it’s a great deal though.
A big difference for me between something like Adobe CC and MoviePass is that Adobe CC makes me money (a lot more money than my subscription price). MoviePass just costs me money. Yes, if I go to enough movies MoviePass will cost me less money than paying for a ticket each time but MoviePass still just costs me money.
A while ago I signed up for Videoblocks (I’m sure everyone has seen ads for their 7-day free trial) and every now and then I go through their site and just download a ton of stock images and AE templates that I think might be useful at some point in time. Why? Because I’m paying for a subscription and I’m going to get something for it even if I don’t have an immediate need for what I’m downloading. I’m sure some people sign up and forget they have an account (and forget to turn off auto-renew) and for those people it’s not a very good deal. For me though, I make sure I get my money’s worth. haha
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[Andrew Kimery] “A big difference for me between something like Adobe CC and MoviePass is that Adobe CC makes me money (a lot more money than my subscription price). MoviePass just costs me money. Yes, if I go to enough movies MoviePass will cost me less money than paying for a ticket each time but MoviePass still just costs me money.”
It is true, that hopefully, you can make your money back, or make it worth it, or whatever. I am not singling Adobe CC out, here. I think CC is a pretty decent value for now.
But it just goes to show that subscription favors the ultra users, and of course, the provider, and doesn’t really benefit the user who needs it but doesn’t use it all the time. However, if the casual user were to go away, the provider would have a lot harder of a time providing to the ultra user. At best, subscriptions have to be cheap enough that casual users forget about it, or nearly forget about it. It doesn’t seem to be about producing, and especially innovating, good products. The odds favor the house and it’s good to be reminded every once in a while before you go out gambling.
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[Jeremy Garchow] “But it just goes to show that subscription favors the ultra users, and of course, the provider, and doesn’t really benefit the user who needs it but doesn’t use it all the time.”
It really depends on the type of subscription offered. For example, I’m working on a gig right now that’s only a few months in duration and so the production company went with the month-to-month Avid subscription. Much better deal than buying a perpetual license or the annual subscription.
[Jeremy Garchow] “. It doesn’t seem to be about producing, and especially innovating, good products. “
I’ve never agreed with this. Lack of competition leads to companies resting on their laurels, not business model. Adobe has to compete with Avid and Apple (and maybe even Blackmagic and Lightworks down the line) or they will lose editors to other NLE makers. Adobe has to find a way to keep me paying for CC just like Avid and Apple have to keep finding ways to convince me to pay for their products.
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[Jeremy Garchow] “Absolutely, but while these are two different styles of subscription revenue, it’s not about the overuse, it’s about the underuse. Moviepass makes money when a lot of people pay to go to the movies, but don’t use it.”
Moviepass needs subscribers to underuse in order to make money.
Adobe CC doesn’t. I can use Ae/Pr/Ps/Il every single day, and you can use Pr once every two weeks, but we will look the same on Adobe’s bottom line.
Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive | RenderBreak [blog] | Profile [LinkedIn] -
[Walter Soyka] “Moviepass needs subscribers to underuse in order to make money.
Adobe CC doesn’t. I can use Ae/Pr/Ps/Il every single day, and you can use Pr once every two weeks, but we will look the same on Adobe’s bottom line.”
I get it, I get it. Honestly. I didn’t want to make this about Adobe CC, but I do think it does touch on the resistance to subscription, in general.
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[Andrew Kimery] “It really depends on the type of subscription offered. For example, I’m working on a gig right now that’s only a few months in duration and so the production company went with the month-to-month Avid subscription. Much better deal than buying a perpetual license or the annual subscription.”
Sure, this is another area where subscription is nice, when you don’t need a yearly contract and don’t need the software all the time, and a month-to-month option is offered. It does allow a job to scale up or down accordingly. How often does that happen?
[Andrew Kimery] “I’ve never agreed with this. Lack of competition leads to companies resting on their laurels, not business model. Adobe has to compete with Avid and Apple (and maybe even Blackmagic and Lightworks down the line) or they will lose editors to other NLE makers. Adobe has to find a way to keep me paying for CC just like Avid and Apple have to keep finding ways to convince me to pay for their products.”
Again, I am not trying to single out Adobe CC here. But since it somehow keeps coming up:
So far, Avid has adopted a similar business model to CC. Blackmagic (and Lightworks, really) has taken the hardware approach, much like Apple, those are different models. Yes, competition is good, but I think that all of these companies offer something very unique, and those things that make them unique are not competing with one another, at least not today. Adobe is a software giant, and they do much more than Pr and Ae. Their documents are sent all over the place, all day everyday, and if you are on the receiving end of those documents and need to modify them in a way to make them useful for YOUR work, then you are going to need to subscribe. This has nothing to do with competition, as a matter of fact, it has to do with having some of the market cornered and offering something that you have no choice to do, but subscribe. And I won’t necessarily make money off of that transaction, but Adobe will.
Yes, in order to garner brand new subscribers, you, as Adobe (or whoever) will have to keep innovating, and if that doesn’t work out, you can always rely on a price increase to get more money out of the existing subscriber base, and it requires exactly zero innovation, and has nothing to do with your competition.
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[Walter Soyka] “I can use Ae/Pr/Ps/Il every single day, and you can use Pr once every two weeks, but we will look the same on Adobe’s bottom line.”
And also, who does this benefit in the long run? The user who uses the service once a month or Adobe (Avid, Autodesk, whoever)?
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[Jeremy Garchow] “How often does that happen?”
How often do people need to a rent car? It depends on the situation does it not? In my neck of the woods it’s a daily occurrence (productions ramp up and down all the time) where as it may be a once in a blue moon experience for you.
[Jeremy Garchow] “Their documents are sent all over the place, all day everyday, and if you are on the receiving end of those documents and need to modify them in a way to make them useful for YOUR work, then you are going to need to subscribe. This has nothing to do with competition, as a matter of fact, it has to do with having some of the market cornered and offering something that you have no choice to do, but subscribe. And I won’t necessarily make money off of that transaction, but Adobe will.”
And in the past if you wanted to stay current you had to buy the latest version of CS. Having to ‘stay current’ is a result of Adobe cornering the market in certain areas, and that happened long before CC.
[Jeremy Garchow] “Yes, in order to garner brand new subscribers, you, as Adobe (or whoever) will have to keep innovating, and if that doesn’t work out, you can always rely on a price increase to get more money out of the existing subscriber base, and it requires exactly zero innovation, and has nothing to do with your competition.”
The exact thing can be said for any product and any company though. If people don’t think Adobe is worth the price (and there is an alternative, even if it’s not quite as good) then users will leave. If the price keeps going up for the same ho-hum product then ever more users will leave (and probably even faster). As long as a company has competition they have to compete. Business model isn’t relevant.
Avid, with perpetual licenses, coasted during the mid-2000s and that cost them a lot as it gave FCP Legend a foot hold (and those switchers had a whole lot more money invested in Avid than CC subscribers will have invested in CC). If any company coasts, and they have competition, it will coast them business (regardless of business model).
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[Andrew Kimery] “How often do people need to a rent car? It depends on the situation does it not? In my neck of the woods it’s a daily occurrence (productions ramp up and down all the time) where as it may be a once in a blue moon experience for you.”
Of course it depends.
We don’t hire facilities, we hire freelancers, and they usually bring their own gear. We also rent gear for the production side constantly.
I know what renting gear entails, how much it costs (with insurance) and the advantages therein. We scale up and down, too. It is more than once in a blue moon and our gigs, I’m sure, are even more temporary than yours. It’s one thing to fire up a few more copies of Avid for a few months, and it’s another thing to rent out a 3-day weeks worth of camera gear valued at $500,000.
[Andrew Kimery] “Having to ‘stay current’ is a result of Adobe cornering the market in certain areas, and that happened long before CC.
“The difference being that people were slow to upgrade, even high output users. Subscription has monetized the ineffectual, which is my point of this thread, and what the article points out, very bluntly. Avid has structured it a bit differently. I think Adobe (as opposed to MoviePass) have very unique offerings, and it is hard to work with designers if you don’t have Ps, Ai, or Id these days. This “forces” subscription on some folks that don’t really need it. It is of no benefit to them, but yet directly benefits the provider with minimal requirements going back to those users. You are literally not getting what you pay for anymore if you are someone who needs an Adobe app once or twice a month. I just want to say this for the millionth time, I am not specifically pointing fingers at Adobe (they just keep coming up).
And of course the answer to this is “don’t subscribe”. I think someone from one of these video companies tweeted that once and later apologized. This seems like a new business practice, scaring people off. That was usually done with price, now it’s the opposite. For now, it’s too cheap to turn down, yet we really hope that you don’t come back. If I operated in that manner, I would be out of business very quickly. I also don’t have millions of subscribers. Pitty me.
[Andrew Kimery] ” If people don’t think Adobe is worth the price (and there is an alternative, even if it’s not quite as good) then users will leave. If the price keeps going up for the same ho-hum product then ever more users will leave (and probably even faster). “
I don’t know if it will work that way. I think we have learned in this forum over the years, that changing workflows is hard and takes a lot of time, which in turn costs money. It won’t be as easy as just switching from CC to Avid (or Pixelmator, or Smoke, or X/Motion, or whatever, mid-stream. There is a lot of careful consideration that needs to happen, but you know all this.
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[Jeremy Garchow] “I get it, I get it. Honestly. I didn’t want to make this about Adobe CC, but I do think it does touch on the resistance to subscription, in general.”
It’s exactly why there’s resistance to subscription. The only one who benefits from forced subscription is the vendor, not the users.
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David Lawrence
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