please explain the new business model to me

[Dennis Radeke]

[Scott Witthaus] “Sounds like you are calling us ‘dinosaurs’! :-)”

Certainly not! My mistake – perhaps I didn’t guzzle enough coffee when I typed it up this morning.

I was speaking of the market in general and not Adobe specifically. I would never for a moment imply that anyone using products other than Adobe would be less than awesome.

Dennis – Adobe Guy

[John Rofrano]

[Gary Huff] “They can make it available however they damn well please. The only choice is if you want to use it or not.”

Well… that was my point. I choose to use FCP X and Motion and Affinity Photo and Affinity Designer instead of Adobe CC and it’s working out just fine for me and it lets me control my business expense because I decide when and if to upgrade.

~jr

http://www.johnrofrano.com
http://www.vasst.com

[Bill Davis]

First person – “You must tighten the F connector on the back of your TV or you’ll risk intermittent static”
(Historically perfectly correct but flawed advice cuz…)
Second person- “My AppleTV is wireless – what’s an F connector?”

Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com – video editing curriculum complete with licensed practice content.

[Oliver Peters]

[Bill Davis] “Second person- “My AppleTV is wireless – what’s an F connector?””

But…. Just to be in keeping with the historical theme and relevance. That TV setup with the tall antenna out back and the coax cost MORE than the Apple TV and flat panel of today. Cost went down, not up.

– Oliver

Oliver Peters Post Production Services, LLC
Orlando, FL
http://www.oliverpeters.com

[Bill Davis]

Cost of factory generated goods? Absolutely. Cost of software as a service in the new connected business model? Nobody has a clue.

Could be that every single “rental model enamored business executive” in our lifetimes decouples their perpetual charges from the general economy and even if inflation is still a real thing in some sectors – they choose to “hold the line” and forgo bumping subscription prices for any reason, forever. Could happen, right? The thing is that you’ve now agreed to allow them 12 annual AUTOMATIC “price change opportunities” via the standard rental contract – or at least one every year on your anniversary if you pay the year upfront.

Advantage vendor. Disadvantage consumer. Again.

Know someone who teaches video editing in elementary school, high school or college? Tell them to check out http://www.StartEditingNow.com – video editing curriculum complete with licensed practice content.

[Walter Soyka]

[Bill Davis] “Advantage vendor. Disadvantage consumer. Again.”

I don’t think it’s so cut and dried. Everyone here focuses on how they’d be tied to Adobe by subscription, and what if Adobe does something dreadful? That’s fear talking. It’s understandable; there is a certain loss of control with subscription vs. perpetual license. But is it rational? If Adobe raises their prices to the point where your business can’t support it, think of how many other customers would be similarly affected.

Adobe is tied to their subscriber base. Going all-in on subscription is a huge risk for Adobe. If Adobe fails to keep a customer on subscription for at least four years and nine months, they will have lost money on that relationship compared to making a CS6 Master Collection sale.

Put another way, Adobe has to convince you to give them money 5 times annually (or 38 times monthly) for what you get in CC before matching that with a perpetual license sale. It’s even steeper with the photography deal: Ps CS6 was $700 and Lr 4 was $150, so you have to subscribe more than 7 times annually before Adobe matches the revenue they would have made with a perpetual sale.

And that doesn’t count upgrades! Presumably you do expect some new functionality in five to seven years or using a product, right?

If Adobe quarks their customers, they are absolutely hosed. CC is a volume play, and the subscriber base is the only thing of value Adobe has anymore. Adobe cannot fail to consistently delight their creative customers without risking their lion’s share of their business.

Compare that to an Apple or a BMD which barely charge anything for their creative software. Adobe is the only company of these three with any real market accountability to their creative software customers.

Advantage consumer?

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive   |   RenderBreak [blog]   |   Profile [LinkedIn]

[Michael Gissing]

Hopefully this doesn’t start a huge political, philosophical debate but the past and current business models in our industry were entirely a human construct that has been borne out of 12,000 years of agriculture and 250 years of an industrial revolution, but based on our insatiable desire to communicate and entertain through self expression.Throughout human history, art, story telling whatever has existed.

Unsustainable practices can grown and totally thrive until they can’t. Infinite growth in a finite world is facing a crunch time and it is probably going to at least start to take effect in our working lifetimes. More people, more consumption. Can’t last and so if the capital based system we mork with starts to seem senseless, then maybe we are just riding the tails of unsustainability into its inevitable demise.

But fear not, we will invent another system that may or may not be sustainable and it might be wildly successful.

[Paul Neumann]

I have an idea about one of the new business models anyway, pretty sure I just fell into it. A friend of mine brought me on board of his small technology company that’s recently been acquired by a large company way way up there on the Fortune 500. Basically, they need a re-branding of their marketing, training, on-line presence, etc.

They are moving into new digs soon and that will include studio/training/webcast space.

And day one I was handed my CC Teams log in, my Adobe Stock log in AND a subscription to the Adobe Technical Communications Suite.

Adobe might be on to something.

[Jim Wiseman]

[Oliver Peters] “I think you are missing Jim’s fundamental point. Premiere Pro could be the greatest tool on the planet and make coffee for you in the morning, too – it doesn’t matter. Jim wants the ability to own the tools he needs for creation in perpetuity. That’s simply not possible with Adobe any longer, for better or worse. Right now, that option on the Mac only exists with Apple, Avid, Media 100, Resolve, or Lightworks (I think).
“

Speaking of Media 100, there is an interesting article in Pro Video Coalition about the new push behind Media 100. It is my go to track based editor as rental is not an option for me and I was actually the dealer for it and Avid in Hawaii during that period, so I am very quick with it. Easy to use, professional quality, Yosemite and Red support, all with a copy of Boris Red that is Media 100 and Premiere compatible, for $99 with a perpetual license and AJA and Blackmagic support. Also a perpetual education license for the same package for $49. Has excellent connections both directions to AE. Perfect for my documentaries. Here is the URL:

https://www.provideocoalition.com/does-media-100-still-make-sense-for-your-post-production-workflow

And I’m not selling Media 100, just using it.. Also using FCPX, love the organization, and the magnetic timeline is great for docs as well. Both no rental, perpetually licensed.

Jim Wiseman
Sony PMW-EX1, Pana AJ-D810 DVCPro, DVX-100, Nikon D7000, Final Cut Pro X 10.2.1, Final Cut Studio 2 and 3, Media 100 Suite 2.1.6, Premiere Pro CS 5.5 and 6.0, AJA ioHD, AJA Kona LHi, Blackmagic Ultrastudio 4K, Blackmagic Teranex, Avid MC, 2013 Mac Pro Hexacore, 1TB SSD, 64GB RAM, 2-D500, Helios 2 w 2-960GB SSDs: 2012 Hexacore MacPro 3.33 Ghz, 24Gb RAM, GTX-680, 960GB SSD: Macbook Pro 17″ 2011 2.2 Ghz Quadcore i7 16GB RAM 250GB SSD, Multiple OWC Thunderbay 4 TB2 and eSATA QX2 RAID 5 HD systems

[John Rofrano]

[Walter Soyka] “Advantage consumer?”

That depends on the customer:

[+] Definitely an advantage for new customers who need more than one product in the suite. Instead of coming up with a $1500 capital investment in software, you pay $49/mo expense and, as you said, you are ahead of the game for the first 5 years.

[+] Definitely an advantage for existing customers who are all-in and upgrade every year anyway. $49/mo is the same price as an annual $600 upgrade fee so these customers probably are not affected and joined immediately.

[-] Not an advantage for a new/existing customer who did not need the entire suite. So a customer who use to just buy After Effects can no longer do that. They must pay for the entire bundle whether they need it or not and pay a lot more on an annual basis than they would have with the old business model.

[-] Not an advantage for existing customers who did not upgrade every year like myself. I was on a two release upgrade plan. I would only upgrade Adobe CS every other version. So instead of spending $600 a year on the upgrade I spent $600 every other year or the equivalent of $300 a year on Adobe CS. Mostly because I didn’t use the entire suite, I just wanted one or two tools. So for me, Adobe CC was twice the price!

So the only customers that subscriptions advantaged were those who were all-in on Adobe anyway. Those of us who were casual upgraders or only needed one product like After Effects are severely disadvantaged. Not because of the subscription model itself, as much as Adobe’s one-size-fits-all attitude like the cable companies i.e., you need to buy the whole bundle or get lost… so I got lost. Adobe didn’t want me as a customer because they did nothing to appeal to my business needs.

That last statement is worth repeating:

Some people are opposed to the subscription model itself

Some people are opposed to a subscription model that forces you to pay for a bundle of things that you don’t need

I am the second type of person. I would gladly subscribe to just what I need when I need it. That’s what the Cloud Service model is all about. A utility model much like gas and electric where you pay as you go. That is NOT Adobe’s model. Adobe’s model is like the cable company where you bundle things that people don’t want to make your advertising seem like you’re giving them more when they actually want less!

~jr

http://www.johnrofrano.com
http://www.vasst.com