Whether tacit or not, Adobe seems to have listened to the concerns voiced by many in the creative community over their impending pricing and licensing policy changes.  As you may recall, I ran three posts late last year, first calling attention to the new policy.  Secondly, as discussed on Scott Kelby’s video podcast “The Grid“, called “Why Scott Kelby and Crew are Wrong“  Finally, I started running a poll to tally people’s thoughts on the policy shift.  Scott himself ran an entire post as an Open Letter to Adobe shortly thereafter, both addressing the issue squarely, as well as offering an alternative.  Apparently, Adobe was listening!

A news post came to my attention a few weeks ago, and while in the midst of the holiday fracas, I did not want to minimize both the significance and importance of this change. So, with the holidays behind us and a new year ahead, I’d like to give some kudos to Adobe for recognizing the painful effect their new policy would have on legacy customers.  They’ve made a change to their plans, allowing CS3 and Cs4 customers to upgrade at a reduced pricing schedule (very much in keeping with what Scott Kelby suggested), thus easing the cost of upgrading for them.  The full release is here:

Adobe Special Upgrade Announcement

For those not wishing to follow in-post links, here’s the full text of that announcement:

 With these great new releases coming in the first half of 2012, we want to make sure our customers have plenty of time to determine which offering is best for them. Therefore, we’re pleased to announce that we will offer special introductory upgrade pricing on Creative Suite 6 to customers who own CS3 or CS4. This offer will be available from the time CS6 is released until December 31, 2012. More details on this offer, as well as any introductory offers for existing customers to move to Creative Cloud membership, will be announced when CS6 and Creative Cloud are released later this year.

The only caveat here is that we still do not know when the CS6 suite will be released (well, some of us do…but as they say, those that don’t know guess, and those that do know – can’t say a word!).  All we can ascertain from this is that CS6 is coming in the first half of the year.  No surprise there, but if it is released closer to June, then that shortens the window for Cs3 and CS4 customers to take advantage of the reduced cost upgrade that Adobe is offering.  Still, better to not look a gift horse in the mouth.  Adobe has heard our concerns, and responded in what I think will be an appropriate manner.  While we don’t know the specifics of the pricing offer, we do know that they have heard us and are giving customers an opportunity to upgrade for a limited time.  So, start saving pennies now to make your eventual upgrade that much easier to swallow!

Of course, Cs5 or Cs5.5 customers will be able to upgrade at normal rates, so this announcement doesn’t really affect you – but it’s a welcome sign that companies and and do listen to their customer base!  So, thanks Adobe for listening!

Fair warning – this is a long post….much longer than what I normally post – but it’s that important!  Please take the time to read this whole thing because you will have a complete and clear understanding of these odd terms like Subscription Service, In Perpetuity,  and Creative Cloud.  You’ll understand the differences, and see why the new pricing scheme is not a good decision for anyone – personal or professional businesses!

So, in the interests of getting it right, I went back and listened to it several times, finally writing a transcript of it (which you can read here.  Here’s the nuts and bolts though of what they had to say…

[Scott] And that’s my guess.  I haven’t talked to Adobe on this.  Nobody in Adobe’s pricing dept. said this.  I can imagine the reason why Adobe did this is a couple of things:

1. I…and this is where all the controversy is, I don’t think it’s the pricing so much, I haven’t heard anybody gripe about the price it’s like $50 a month and you get everything they do. You get everything, right? You get like the whole Master Collection.  Again, I didn’t look at all the numbers, so I don’t …I could be a little off.

[Matt]  It’s ballpark and if you add up what it would cost you to buy the Master Collection, it actually in some ways can save you money.

They are looking at the Creative Cloud service, not the subscription pricing.  Let me state that again, unequivocally:

They are confusing the subscription model with the Creative Cloud stuff.

These are two different things, so let’s get that on the table right away.  The subscription service is not $50 a month!  What’s the difference?  It’s easy! A subscription service is something you pay a small amount for every month (or week, or year…whatever, you are a subscriber.  How is that different from the current licensing?  The current licensing (whether by download or media – it doesn’t matter)…means you own that license forever.  In legal terms, it’s called an in perpetuity license.  You’ve bought that license and are entitled to use it forever!  Renting a house (or apartment) is far more expensive than buying one.  Renting (or leasing) a car – the same.  Would you rent a camera?  For one time uses, sure…but who wants to use that model if you plan on doing anything regularly?  The answer:  no one!  From Adobe’s perspective (or any provider for that matter), it’s a great business model because it makes the renter more money.  The same holds true here for Adobe!  Don’t believe me?  Take a look…

We are assuming that we are starting from an upgrade perspective – people that already own a CS5 license.  The following chart is based on the cost to upgrade an in perpetuity license (assuming that doesn’t change…) and shows what that same cost would be under the subscription model based on a 24 month cycle:

An important qualifier here – Adobe is also moving to an alternating schedule whereby dot releases are put out in alternating years to full version releases:

This is why you are renting on a 24 month schedule.  It’s also why there is no way that renting anything would cost you less.  They said they hadn’t had the time to look into it.  Several others have.  In their defense, the 5 minute bit was full of qualifications – Adobe didn’t tell us, we don’t know, we can only guess…all that sorta stuff, which is fine in and of itself.  But how can someone say with a straight face that renting costs less than owning?  Seriously.  Take any basic business course or economics course.  The pricing factor aside (which is already been demonstrated as exorbitant…) at the end of renting – you own nothing!

How is the subscription model a better model for anyone besides Adobe?  Scott and crew answered with the following:

“[Matt] The biggest problem I see, there’s gonna be a barrier to entry for someone who is on Cs3 or CS4.

[Scott] Especially hobbyists

[Matt] That’s who I’m really talking about.  For a company I think…it’s not just better for Adobe…to put in a subscription model because now they know how much they are gonna take in every year…but now a company knows exactly how much money you’re gonna spend each month on software.  So it’s easier for a company.

Hobbyists though, ya know, it’s hard to swallow six or seven hundred dollars…

[Scott] A year…

[Matt]  And then go into the subscription model too…

[Scott]  Oh no no…you’ve gotta upgrade…it depends on what you have…if you have the Suite..I don’t know…

[Matt]  It does get, it can get hairy…”

As you can see – it’s not that hairy – it doesn’t matter what you own: CS2-Cs5 will cost more to go to a subscription model than it would to stay on an in perpetuity license.  One more time for clarity, here’s where Scott Kelby and Crew got it wrong:

They are confusing the subscription model with the Creative Cloud.

Not only is it not that complicated – even for businesses, it’s very easy to extrapolate out the Total Cost of Ownership over time and see how this is not a good economic move for anyone (unless you are Adobe).  With all due respect to Scott and crew – I would ask them if they will switch to the subscription model?  My guess is no.  They also provided, in my estimation, a pretty lame explanation for why Adobe is changing their policy.  Here’s what they said:

“[Scott]I’ve been getting so many people asking about Adobe’s new pricing and all that stuff.

Adobe does not call us and ask what we think about pricing.  We learned when everyone else did.  I haven’t had any time to really look into it.  I think there are some good things about it.  I think the subscription model is really great, and by the way, you might as well get used to the subscription model, because it’s the wave of the future. You’re going to be subscribing to everyone’s software.  Especially when the big people like Adobe start moving into that thing.  I think the days of you going to the store and buying off the shelf – it’s either going to be direct download or it’s going to be subscription based.  And everyone wants the subscription model because it gives you revenue all year long ya know

[Matt]   Well,  it’s predictable they know Jan through December what they are going to get.”

Huh?  So they can get revenue year round?  They do already!  Different folks buy at different times…it’s called effective management of resources.  This isn’t about regular revenue – it’s about more revenue!  And we all know Adobe isn’t hurting.

That isn’t on the NAPP gang though – that’s just Adobe greed.  But I do think where Scott and crew are misunderstanding the outcry is that they think we are upset over the subscription offering.  It’s not that we are against the subscription offering per se.  It’s the exclusive and disingenuous way that people are being set up into that option.  Let me state more unequivocally what I think is wrong:

1.  The sudden elimination of 3-versions back upgrade options.  The solution to this is rather than just cutting it off immediately, to phase it out.  (This was posted in the comments from last week here.)

Since there was no major outcry when Adobe said that only 3 versions back could upgrade you would think that if they wanted to do this to go 2 versions back for CS6. Then they could offer a graduated sliding scale something like this:

Upgrade 2 versions back. Upgrade price $189.
CS3 and CS2 Upgrade at $249.00
Older Versions Upgrade at $329.00

Every Quarter or so offer older versions a 20% discount if purchased directly from Adobe.com

2.  For those that want the subscription program, fine, but I am here to tell you from a financial perspective:  It is a horrible idea for anyone…personal or professional!  The TCO is 4x what it would be for an in perpetuity license, and if you ever end the subscription program for yourself or your company – you have nothing left to work off of. It’s like renting.  For most outfits, that makes no sense for any software (or hardware) used on a regular basis.  Now if I had a one time need for In Design or something, that’s another story – but we are talking regular use here.  Heck, I’ll rent glass I can’t afford, but I also am not using that glass every day!  Only for 2 or 3 days.

3.  The last part I have a beef with is whether this will ripple over to other products.  We don’t know yet, but I can only assume that Lightroom and Acrobat are soon to follow if this subscription service takes off.  The installation base for Acrobat is far more extensive – going into regular businesses, not just creative businesses, and the impact there could be dire.  I suspect Adobe is merely giving an indication of what’s to come by testing their leading products in this model.  Unless we want to see everyone adopt this method of sucking that much more from our own wallets – we need to tell them to stop now!

So, chime in now, and share on Twitter, Facebook, and Google Plus – as well as to Adobe.  I gave out links on how to do this here.  Here’s the on-going poll too if you don’t want to comment.  Speak up now and let Adobe know how you feel.  We still have a chance to change their minds.

EDITOR NOTE:  This post was written and published before I had a chance to read Scott’s Open Letter to Adobe on his blog today.  That letter pretty much takes Scott and Crew off the hook – they are advocating on our behalf and I’ve already given my accolades to Scott over there.  Please read that post as well!

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Truth be told, the economics of photography sales are just as much a mystery to me, and I don’t have all the answers.  But I know a few things about where to start, and how to research.  First and foremost, is to know your market.  Are you working in NYC, or in Duluth MN?  Have you looked at other photographers’ websites?  What are they charging?  Are they start-ups or established companies?  What kinds of services do they offer?  What kinds of services do you offer?  Do you provide print fulfillment or is that out-sourced?  What is your overhead?  Cost of equipment?  Cost of training?  The whole 9 yards – it’s a lot to filter.  Well, here’s some software that can give you a leg up in that regard – FotoQuotePro.

This software is very well designed and offers you rates for a wide variety of publications, ranging from magazines, to journals, brochures, quarterly reports, and a plethora of other variations.  Quarter page prints, half page, full page, distribution of media, and many other factors are tallied in to help Fotoquote determine your rate.  Granted this may not help the startup in portrait work, but if you are looking to market your work toward commercial and stock sites – this is definitely the software for you.  And now, in a special offer here at the blog – I’ve been able to garner a 33% discount for some lucky listener.  That’s right…33%!!  It regularly goes for a price of $150, and the good folks over at Cradoc Foto Software have generously donated a discount code.  Rather than buy and install it myself, I would like to pass this savings on to some lucky reader of the blog.

So, here’s how the winner of the discount code will be chosen – post a comment here at the blog.  Say what you like about the software, why you could use it, or simply introduce yourself to the rest of the readership.  This particular post will take comments through the end of June, so you have about two and a half weeks to get something out there and get a chance to win the discount code.  In the meantime, head on over to Cradoc Foto Software and download a trial to see what the program is all about.  In the meantime, here’s a few screen shots from the demo version to show you what they have to offer…

Tab 1 of FotoQuote Pro

Tab 2 of FotoQuote Pro

Tab 3 of FotoQuote Pro

Tab 4 of FotoQuote Pro

Tab 5 of FotoQuote Pro

Happy shooting, and we’ll see you back here again tomorrow!  (Oh yeah, and don’t forget, you can also share your thoughts and suggestions for future hardware and software reviews that take place right here on the blog!  Let me know what you think as it’s the contributions of readers that make this such a fulfilling blog – who knows, there might be a giveaway in that too!)

Grab the Feed

• Jeff Revell, who has become quite well-known for his photowalking blog made a few interesting posts recently.  In one of them, he did a reminder on updating your firmware.  Great idea Jeff – if you’re interested, I actually put together a post with all the Canon firmware updates as of a few weeks ago.  The other one was ab out the Epson Print Academy season for 2009 has been published.  I had been meaning to go to one of these for a while, and for a mere $150 think it is definitely worth the cost.  They’re coming to Denver and it’s a mere block or two from where I work so I will most assuredly be in attendance this go around.
• Scott Kelby, master instructor of Photoshop, Lightroom and author of more books than I can count, is also bringing his tour through Denver some time in December.  Check out the schedule here if you want to see him live and in action at what he does best!
• David Ziser has offered up a Digital Wakeup Call DVD worht $75 to some lucky participant if he gets 20 ideas on how to incorporate video into your selling packages for photography businesses.  Not a bad deal for 5 minutes of your time!
• Don’t forget, I’ve expanded the poll here at CanonBlogger to go longer than the 1 week, so the numbers are a more accurate representation.  What features do you like about the curreng generation of camera bodies on the market?  What motivates you to buy?  Share your thoughts on the poll to the right.

Last, but not least, the hubub on most forums lately has been surrounding the release of CS4 and LR2′s latest updates.  The reason for all the hoopla comes every time there is a new release to the software, and it’s a cycle that likely will not end.  Rather than just pile on and vent, I thought for the second half of this double-feature wrap-up, I’d share some thoughts on why people are frustrated rather than just saying “people are frustrated”.  So, here’s a different perspective.

Software is not a tangible asset

Software is not like a camera body, or a car, or a television, it’s something that lives on your computer.  Thus, the value of it is not as easy to see.  We are very much a society that thrives on all our toys, and software just isn’t the same as having the latest body, or flash or television or car.  It’s not something we can touch and feel and show off to our friends.  It’s only on our computer.

Necessity

With software, we are sometimes obligated to upgrade.  I personally had to upgrade because CS2 did not offer a raw converter for the Canon 40D.  Sure, there’s the Adobe DNG converter for free, and I actually have incorporated that into my work flow for the Mac where I don’t have CS3, but that does present another step in the process of a work flow that I was previously happy to not have to deal with.  Anyway, the point here is that if you don’t upgrade your software, you will find yourself unable to maintain a stable and consistent work flow (since you re upgrading other gear all the time too).

Competitive Pricing

With other technologies, competition keeps prices under control.  Camera vendors like Canon, Nikon, Sony, and the rest all have to compete with one another for your business.  Adobe really has no competition in the market place.  Okay, sure, there’s Corel, and the GIMP, but come on, who are we kidding?  Adobe is the market when it comes to photo editing software.  All the others are simply “alternative programs”.  Without a competitor, Adobe can price things however they want, knowing that those of us who have already invested are pretty much committed to maintaining our work flow by keeping the software interface as consistent as we can.  To their credit, upgrades are cheaper than the full blown versions of the software, and there are often promotions and suc (educational pricing is the best way to go imho – take a community college class once every two years and you will save anywhere fro $300 to $700 on pricing for the CS products).

Release Schedule

Do we really need to upgrade our software and work flow every 18 months?  With cameras, (which are released on the same schedules for most SLRs), most people I know wait at least 2 generations before upgrading.  Another analogy that has been made here is to cars – anyone upgrade their car every two years?  What about televisions?  Do we really upgrade our televisions every 18 months?  Unlikely…and even if we do, is the old television still usable?  Often times, the older version is relegated to the basement or a childs bedroom, or even sold second hand.  Who buys outdated software?  No one that I know of…

So, there’s the second half of the weekend post.  What do you think?  Am I off base?  Is the software market competitive?  Do you think the pricing is fair and equitable?  What about the upgrade schedule?  Does 18 months sound about right?  Sound off in the comments!

Again, sorry for the lack of material over the last two days.  Hopefully this will make up for the lack of content on Thursday and Friday.  Now, since you’ve finished this, take that last sip of coffee, pack up your gear and go have fun shooting!  (In other words, Happy Shooting!)  We’ll see you back here again on Monday.