Adobe has changed its standard delivery and payment model, and winners and losers will emerge inevitably among their customers.

Adobe faces the challenges of any mature industry. When the product plateaus in functionality, how do you continue to market and profit from it in the face of flat demand?

The PC industry had astounding growth as long as machines became average in capability in 18 months and obsolete in three or four years. However, last year’s machine or even a machine 3 or 4 years old can now do everything that 90% of the population needs – email, web browsing, social media. Facebook, Twitter, and even YouTube do not create demands that can’t be answered by almost any PC, indeed, most smartphones and tablets handle them with ease. The number of people who run high end video applications or depend on crazy processing power to speed up their tasks is very small indeed.

I have spent most of my life in the book publishing industry. It has been a mature industry for at least a century. This year’s publishing is pretty much like last year’s = books are no better or worse from year to year, and despite the small disturbance of ebooks, format is pretty the much the same.

Adobe faced two problems with continuing to sell a fully mature program which required a large initial investment. One was rampant piracy. Experts estimates that 40% of all copies of Photoshop are not legally licensed. Because of the $700 “entry fee” and $200 upgrade cost, the software was too expensive for many to afford. The other big problem was the same as PCs – as the software reached maturity, there was less and less reason to upgrade. $200 to add a handful of features to software that was state of the art just 18 months ago began to seem foolish. A lot of people said CS3 did everything they needed (or CS4 or CS5) and a lot of users, as I did, decided to upgrade every other version.

The new Creative Cloud pricing model adopts the iTunes principle; if you make a product inexpensive and easy to purchase, fewer people will steal it. Additionally, honest consumers, who simply went without Photoshop because they couldn’t come up with the lump sum, could now legitimately access it.

The pricing model itself is not unreasonable, provided that Adobe continues the innovation that has been its hallmark. After all, as many have pointed out, the average business spends hundreds of dollars a month on telephone and internet service, which dwarfs the $20/seat they are being asked to invest in the most essential piece of software a photo business uses. Even for the non-professional consumer, $10-20/month for Photoshop represents a far better deal than the $110/month the average household invests in mind-deadening cable or satellite TV services.

The discontents are two.

For one, those of us who invested in an expensive, legal, licensed copy of PS are not getting a fair deal. We invested 7 bills for the privilege of thereafter spending $11 or less a month to keep it updated. In perpetuity. Adobe is offering to let us get Creative Cloud for about that amount per month, but only guaranteeing it for a year. That means we get essentially the same deal as a new subscriber with a $120 discount. A $120 discount for a $700 investment is NOT closr to a fair deal. If they were to offer $10/month FOREVER (adjusted for inflation), that would be a fair deal. Simply saying that we have a usable copy (which new subscribers will not) if we ever cancel is not sufficient, as it is only a matter of time before our CS4, 5, or 6 will not work with the latest operating system or any updated plugins we buy.

The second follows from the first. After a certain investment in Photoshop, users would like to have something usable to keep on their computers, even if they cancel. After all, when I spent $700 for PS 5.5 and another $600 to upgrade it periodically all the way to CS5, I owned CS5 if I decided to never spend another cent. Someone who enters at the $20 level and spends $1200 over the next five years will have nothing to show if they cancel.

Folks with a licensed copy of Photoshop should get a lower rate forever. New subscribers could buy CS6 as an entryway to the same deal if they so chose. Folks who choose the straight subscription plan should have a point at which they also own (earn a permanent license to) a copy. Make it 72 months, when they will have made an investment equal to what original licensees made.

Photoshop is worth $10 a month to me, and I would probably pay the $20 in a year. But I shouldn’t have to, and it leaves a bitter taste in my mouth. I am hoping that they will have the sense to grandfather their most loyal and honest customers, those that built their business.

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