Adobe testing a new price point for the Creative Cloud Photography Plan

[Rudeofus]

What I see is:

• people who use Photoshop CC sahying an increase in price would be too much for them
• People who do not like the subscription model saying that they are abusing their market position for no other reason they are raising prices
• Some people who do not like the subscription model coming to the rather odd conclusion that what Adobe are doing is illegal

I share your disagreement with Group 3, and you never read any statement from myself supporting this position. Group 1 may be right or not, let's wait and see how this unfolds. Group 2 is a perfectly valid concern: a price hike of 100% is not a common thing, and a clear sign of market domination.

And you act as though they are the only company who do this. Almost every services company builds this into their overhead/cost calculation and would be dumb if they did not.

A price hike of 100% is neither a common nor a smart thing, especially from a company already making healthy profits off the product. What Adobe offers in return for the extra cash is apparently something only few people seem to want or need or are willing to pay for. Future will show how this ends.

If you look at Microsoft, which also had an extremely dominant market position: people still put up with them on laptops and desktops, but flat out rejected their offerings in the smart phone and music player market regardless of merit. Microsoft still earns a lot of money with their server and desktop software, but unwittingly and unintentionally cut themselves off from large future markets.

 

[privatebydesign]

Corporate shill back.

Maybe Adobe know what they are doing and they are putting trust in the bean counters that have more then delivered so far in the transition to subscription. Maybe they know their market is creative professionals who value the software suit they make and maybe they value that core much more than the comparative low income part timers and single app users spread across a wide variety of genres.

The strength of the suit is the cross platform integration, if your have ‘a tech guy’ who can talk to the graphics guy in the studio it is an afternoons work for him to make a custom studio app, they can make any number of other output relevant to todays studio setups and aren’t on the $9.99 per month package!

Maybe trying to keep everybody happy isn’t working as Adobe want and they see specialization and prioritization as keys to increased profitability. They have always considered themselves as suppliers of software products aimed at ‘professional’ creatives, the hard truth is if you are not in that category Adobe simply don’t value your revenue as much as you want them to.

Personally I’d rather have half the customers paying twice as much than the other way around, but does anybody believe a 100% rise in price will cost them 50% of their customer base? I don’t but I bet their bean counters have a very accurate guide.

 

[Mikehit]

I share your disagreement with Group 3, and you never read any statement from myself supporting this position.

I never said you did - I was giving a view on different motivations

a price hike of 100% is not a common thing, and a clear sign of market domination.

Rubbish. Have you ever been involved in product development and marketing?
And even if you are right, there is a world of difference between market domination and corruption of the market - the former is part of life, the latter is an abuse of market power.

A price hike of 100% is neither a common nor a smart thing, especially from a company already making healthy profits off the product. What Adobe offers in return for the extra cash is apparently something only few people seem to want or need or are willing to pay for. Future will show how this ends.

Or maybe people are misreading why Adobe are considering a price hike?

If you look at Microsoft, which also had an extremely dominant market position: people still put up with them on laptops and desktops, but flat out rejected their offerings in the smart phone and music player market regardless of merit. Microsoft still earns a lot of money with their server and desktop software, but unwittingly and unintentionally cut themselves off from large future markets.

Fair point. But that is the market in action - which is quite different to comments about abuse of power, monopolies and need for people to be prosecuted.

 

[Rudeofus]

Rubbish. Have you ever been involved in product development and marketing?

I am a senior engineer, so trust me: I do know poor product expense estimates and unexpected rises in final product cost. But none of this is the case here: Adobe's product line is very mature, there are no hints at significant development risks or cost overruns. Adobe is very profitable, too. If they up their prices by that much, then they do this because "damn you, that's why!".

And even if you are right, there is a world of difference between market domination and corruption of the market - the former is part of life, the latter is an abuse of market power.

Market domination plus share holder valuation considerations ===> market corruption. This is exactly what we see here: a sudden price hike with no increase in perceived product value.

Fair point. But that is the market in action - which is quite different to comments about abuse of power, monopolies and need for people to be prosecuted.

What Adobe does here is abuse of market power, but that does not mean that what they did is illegal.

 

[Mikehit]

Market domination plus share holder valuation considerations ===> market corruption. This is exactly what we see here: a sudden price hike with no increase in perceived value.

Yet you have already given an example where a dominant company changed their prices and suffered. And that is the point I was referring to. That shows there is no corruption of the market - so it seems you are merely making some ideological point.

What Adobe does here is abuse of market power, but that does not mean that what they did is illegal.

As above, it is not abuse of power because if people do not like it they will move. That is simply the market in action.
Abuse of power is if they make this move knowing a majority of customers cannot reject it without suffering themselves (but I guess you will invent some way the customer suffers).

 

[Rudeofus]

Yet you have already given an example where a dominant company changed their prices and suffered. And that is the point I was referring to. That shows there is no corruption of the market - so it seems you are merely making some ideological point.

Microsoft as a company may have suffered from their past decisions, but the decision makers from back then reaped healthy profits and no longer have to deal with the consequences. They also did not have to deal with the fallout from shoddy but ubiquitous software, it was society which suffered from CodeRed, Nimda, ILoveYou all the way to WanaCry and NotPetya.

but I guess you will invent some way the customer suffers).

You conveniently forget, that people using a complex piece of software invest heavily in training. There are costly training courses to make effective use of Photoshop&co, and people to take these courses. Others spend hours of their own time learning new features to become more productive. Telling these people "oh just use something else if PS is too expensive for you" is a bit cynical IMHO.

 

[Mikehit]

Microsoft as a company may have suffered from their past decisions, but the decision makers from back then reaped healthy profits and no longer have to deal with the consequences. They also did not have to deal with the fallout from shoddy but ubiquitous software, it was society which suffered from CodeRed, Nimda, ILoveYou all the way to WanaCry and NotPetya.

What has that got to do with the discussion?

You conveniently forget, that people using a complex piece of software invest heavily in training. There are costly training courses to make effective use of Photoshop&co, and people to take these courses. Others spend hours of their own time learning new features to become more productive. Telling these people "oh just use something else if PS is too expensive for you" is a bit cynical IMHO.

And that is what happens when any company increases prices - the clients have to weigh up the cost of staying with the provider or whether to change providers. It is not unique to Adobe nor is it unique to software nor is it unique to the subscription model - did they this level of complaint when they raised prices of CS5 or CS6? Nope, because people realised they had a choice of whether to stay with Adobe or retrain people on a new program.

You raise reasonable points but are using them to build an unsustainable and unrelated case against Adobe.

 

[Rudeofus]

What has that got to do with the discussion?

It is a classic example of where the people affected by a poor decision are not the people responsible for the decision. Microsoft destroyed their reputation as a trustworthy corporate partner two decades ago while reaping in massive profits. The folks making the decision became filthy rich in the process, while everyone else, including Microsoft, had to bear the consequences.

It will be the same with Adobe: those who jacked up the price will be rewarded for massively increased short term profits, whereas photographers will pay the bill now, and Adobe will suffer from this breach of trust in the oncoming decades. And yes, the unspoken deal "I get a powerful photo editing tool for a reasonable and predictable monthly fee" was essentially broken by Adobe here. It's up to anyone now, whether one would invest in Adobe products again, but regardless of what the customer base decide in the long term, current decision makers at Adobe will reap in hefty rewards.

It was this type of moral hazard, which not only took down Microsoft in all current growth markets, it is also responsible for the financial crisis of 2007, the one we still all pay for.

And that is what happens when any company increases prices - the clients have to weigh up the cost of staying with the provider or whether to change providers. It is not unique to Adobe nor is it unique to software nor is it unique to the subscription model - did they this level of complaint when they raised prices of CS5 or CS6? Nope, because people realised they had a choice of whether to stay with Adobe or retrain people on a new program.

Was CS6 twice as expensive as CS5? Would CS5 quit working at once just because you didn't immediately upgrade to CS6? That option "I'll delay that upgrade for a year" has been taken from us with this subscription model.

 

[stevelee]

I definitely skipped a version of Illustrator. The head of that development team announced that they had done a lousy job with the Mac version, and we should all run out and buy the Windows version. That didn't inspire a lot of confidence in buying either one.

 

[unfocused]

... the unspoken deal "I get a powerful photo editing tool for a reasonable and predictable monthly fee" was essentially broken by Adobe here...

Huh? Your interpretation of this "unspoken deal" is "I get a powerful photo editing tool for the same price forever."

Companies introduce products at a low promotional price all the time. Once the promotion period is over, the price goes up. No company ever promises to never raise prices.

Adobe has not even raised the price yet, but if they do, you will still get a powerful photo editing tool for a reasonable monthly fee. Let's be honest, the only reason $20 a month sounds expensive is because we've been spoiled by the $10 a month bargain rate.

 

[Rudeofus]

As far as I know, Adobe CC pricing was never marketed as "promotional", so I guess most people rightly assumed, that US$10/month for a mature and well established product was a sustainable price, which would not increase much beyond adjustments to inflation rate.

You may consider US$20/month still very little, so let's wait and see whether the market agrees with your view on this.

 

[Mikehit]

Was CS6 twice as expensive as CS5?

Nope - but that is not the comparison. You need to look at the price difference between CS versions and how that broke down over a typical version period.
An increase of $10 per month over 2-3 years is not unreasonable for the cost of CS.

Would CS5 quit working at once just because you didn't immediately upgrade to CS6? That option "I'll delay that upgrade for a year" has been taken from us with this subscription model.

Nope but CS was always aimed at professionals who would generally (maybe not you) take each upgrade to improve their workflow.

Look - I get it. You don't like the subscription model and you think it is overpriced. But as I said before that is miles away from claiming they are abusing market dominance and distorting the market - and that is where my comments started but you are moving the goalposts every time I counter your complaints.

 

[Mikehit]

Adobe has not even raised the price yet, but if they do, you will still get a powerful photo editing tool for a reasonable monthly fee. Let's be honest, the only reason $20 a month sounds expensive is because we've been spoiled by the $10 a month bargain rate.

Yep. IIRC correctly the cost at launch all those year ago was $15-$20. They dropped pretty quickly to $10 and never increased it despite all the rumours that they would.

 

[Mt Spokane Photography]

Here is a good article discussing the issue by someone who knows.

Lightroom in the news - is it as bad as it sounds?