The costs are lower, but so are the revenues and profits. Most creative content isn't produced in big, high profile arenas like Hollywood, and the organisations producing it often aren't working on a scale where Hollywood Accounting tricks are relevant.
Suppliers of course believe that pricing should reflect what the market can bear.
That's an assumption, and not always a valid one. It may be true in most cases at the high end, but at the low end the question is often closer to "Can we afford to do this at all?"
If demand can be increased by reducing price such that more profit can be made, suppliers would be better off. Unfortunately many suppliers are afraid of upsetting existing markets by changing strategies.
Both of these things are true, but the "if" in your first point is important, and some of the fear in your second point is justified. The reality is more complicated than just increasing/decreasing prices resulting in decreasing/increasing demand, even allowing for the possibility of a non-linear relationship between the two.
There certainly have been some success stories of quite dramatic price reductions resulting in even more dramatic increases in sales and ultimately much better results. Steam famously succeeded doing this with their sales, for example.
On the other hand, for a smaller business selling content on a smaller scale, your transaction overheads probably include a fixed cost element as well as some that are proportionate to the price. Obviously that means the lower your price, the more that fixed element is eating out of your margin.
Another one that isn't always considered by those who haven't worked in this sort of market is that people who purchase low value products and services are much more likely to cause customer support issues later. Since they are also generating relatively little profit if you adopt a high volume, low price strategy, one customer support request can easily cost more to service than that customer's entire purchase was worth. So your support overheads are likely to increase significantly if you go high volume, low price as well.
In short, it's not an easy decision to make. I have businesses where we've debated these issues many times, and we've done some experiments, and we know that small changes can make big differences. We also know that it's very difficult to wind back a big cut in your headline price, and that making such a cut and then finding it didn't result in a big enough increase in customer numbers would without doubt result in the business failing. It's easy to look from the customer's side and say businesses should try it, but that's a tough call to make when your staff have mortgages to pay and kids to put through school and you're being asked to gamble with their livelihoods.
Again, you're only looking at the very top end, the unicorn smash-hits that make a bazillion dollars at the box office. Most creative work just isn't like that. Most professional actors struggle to get by and would be thrilled to land a 200K gig. Most of the production team behind professional creative work probably don't feature in the headline credits or get a high salary at all, even in those few smash hits. And in smaller work, which is most of it, no-one is getting big pay-days.
Who would have thought that if you just priced your products fairly you could gain all the market and crack down on pirating easily?
The difficulty is that a lot of people's idea of a "fair" price is wildly out of proportion to average production costs and returns, particularly if you're looking at smaller markets or more niche products and not just the top end Hollywood blockbusters, top-of-charts music, this season's must-have game that are the unicorns in this business.
Read any Slashdot discussion on this subject, and after a few hundred comments you'll find no shortage of people who think that because the marginal cost of online distribution is close to zero, the price should be as well. Go talk to real world customers about your library of original content, and you'll find plenty of people who say they'd buy it if it were a $3 app for the whole thing instead of $10/month. Of course they would like it cheap/free, but that's probably not a fair price unless you have a very large market or very low production costs.
Erm... If you don't like the new approach you keep the one you already have? Just like a lot of people have done with old CS versions?
Besides, I don't see it as inevitable that they will make that decision. You can make a lot of money selling new versions of this kind of software; you just have to have some worthwhile improvements each time.
The thing is, there is relatively little we don't understand about how to build this kind of software. I mean, sure, there are some clever image processing algorithms behind some of the new features, but the fundamentals are what they are. It's within the capabilities of a relatively small team to implement those basics well, and that is exactly what several of these newer competitors seem to be doing. There is no reason you need to be the scale of Adobe to make a profitable drawing package, and no reason you need to incur those kinds of overheads. So while it's certainly possible that some of these new packages won't keep making money forever, Adobe's vacation of the non-subscription market leaves a huge gap and I don't see any likelihood of business drying up any time soon.
I'm generally against piracy, but in that case I don't have an ethical problem with it. If you properly bought something clearly intended to be a perpetual licence, and if it came with a tool to transfer that licence to a new machine if you needed to, then any attempt to renege on that deal after the fact by the developer seems to be unethical at best, and finding an "alternative source" for exactly what you would be entitled to run anyway is literally not damaging the copyright holder at all. Obviously the law may disagree and what you choose to do about that is a personal decision.
These days your coffee pot uses OpenSSL. Your dildo probably uses OpenSSL. My lightbulbs just updated their firmware again. Every dumb widget is now "smart" and they all rely on OSS software that they never wrote and don't care how it works.
That may all be true, but I think it reflects more the insanity of connecting everything and depending on so many things by default than any inherent need to be constantly updating software. Obviously anything that actually needs connectivity will also have security and privacy implications to consider, but with many of these things "Well don't make it connected, then!" is a perfectly sensible response.
I missed what was uncertain or locked in about this arrangement.
They could remove an essential feature you rely on, or discontinue a whole application, any time they want.
They could increase your subscription fees to arbitrary levels, any time they want.
I haven't read their current terms, but I'd be surprised if they don't set out some situations where they have a right to discontinue service to your business entirely.
If your lease is running out and won't be renewed, you can always move to new premises. It's a hassle, but it's a well understood process and won't kill your business. And typically you will have several months of notice to plan the move and make transition arrangements. If you're relying on online subscription software for a key part of your business and you get in one morning to find Adobe turned something off, what are you going to do?
Nearly all enterprise quality software require a huge buy in from companies and are not easy to migrate away from.
That's true, but if you have permanently licensed, locally installed software for your essential tasks, you always have the option of just keeping what you had and not migrating at all. If you're relying on a subscription-locked or any sort of cloud-hosted software, you don't have that backup plan.
The current cost of Creative Cloud all-apps in the UK for around two years seems to be about the same, allowing for inflation, as what Design Premium used to cost for a permanent licence.
We have copies of Creative Suite that we bought many years ago, still use from time to time, and have never needed to upgrade. Cloud would already be probably 3x as expensive for our situation, and obviously we'd be locked in and lose the use of it if we ever stopped paying.
I'm still waiting for anyone to highlight a killer feature that would make it worth upgrading from our old CS to current CC versions. Maybe for some people they're out there, but for our needs CS was OK and other applications tend to do a better job with the pain points anyway these days. YMMV.
That cuts both ways, though. I know a studio who use Autodesk products for 3D things. They were "forced" to go to subscriptions as you describe, but it turned out that some of their customers weren't playing that game and stayed on their older versions. It also turned out that Autodesk only let the studio use the last three years' versions on their subscription model, so by four years, the studio was having significant problems supplying data to some of their long-standing customers using established, signed-off formats and pipelines, which was just bad for everyone involved. Someone forgot the old saying about if it ain't broke...
People say this a lot, but the UI for Adobe's Creative Suite/Cloud apps has always been clumsy and inconsistent and they've always been buggy. That doesn't seem to have improved much despite all the new versions or rolling updates since the move to Cloud. There are some areas where some of the newer applications are better than Adobe, and in some cases have been since day 1, regardless of cost.
The home page is pretty bad, but just go to the menu top-right and look at the real product pages. Those are fine. In any case, if you're choosing your creative software based on someone's home page, you're doing it wrong.
It would be fascinating to know whether it really is working now that competition is starting to appear and the ongoing costs are starting to bite. However, if you look at Adobe's official statements, it's remarkably difficult to determine what's really going on. The ones I've seen from time to time lack just enough detail that you can't tell whether, for example, expansion into foreign markets in the first few years of Creative Cloud was compensating for reduced subscriptions in the early markets, or whether it's really looking great for them across the board.
The strongest competition for Adobe probably isn't from FOSS like the GIMP and Inkscape these days, but rather from the smaller but commercial outfits making products like Sketch and the Affinity suite. Several companies have already sprung up with products to fill (parts of) the gap left by CS when they went subscription-only, and they seem to be doing pretty well so far.
If you could actually do arithmetic, Creative Cloud still didn't work out cost effective at the pricing in a lot of markets, and much less so if you didn't upgrade Creative Suite every time, which many users didn't.
We've run away from both Adobe and Autodesk as a direct result of these decisions. Most of our new graphics and UI work is done with tools like the Affinity suite. For occasional 3D modelling work we keep a pre-subscription licence around for compatibility but we're migrating to open tools like Blender for future-proofing. Only a brave person or fool lets their business depend on this sort of uncertain yet locked in arrangement for anything critical to their business, and whether they are a brave person or a fool is probably only a matter of perspective. There are good, realistic alternatives for most casual to moderately serious users these days.
Maybe that should be the case, but the reality is quite different.
Time and again, we have seen that even serious data breaches on a massive scale have no real consequences for the negligent party, even if the data involved is highly sensitive.
Meanwhile, the NHS getting hit by WannaCry not so long ago was headline news for a long time, and rightly so given the crippling effect it had on real world patient care.
The GDPR looks like a significant overhead for small businesses and a good excuse for the EU to fine a few more big US companies, but for practical purposes if the government wants this outcome then the NHS might as well be above the law as far as data protection is concerned. That may be horrifying, but the average UK citizen is probably even more horrified by the idea that they might call 999 and not have an ambulance come or they might get to the emergency department and find it closed down because of malware.
Which is the greater danger, allowing web access in the clear (note that this does not preclude allowing secured access as well) or creating a single point of failure called "Let's Encrypt" such that if it does fail then suddenly the entire world has to start paying money for certificates or finds their sites no longer work properly?
Perhaps we'll just have to agree to disagree on this one. You can tag it WORKSFORME if you like, but in a discussion about why Chrome is increasingly dominating the browser market, you're discounting an experienced web developer telling you that under controlled conditions and a variety of test setups the new version of Firefox has been unstable enough that our team has been deterred since 57 came out. Obviously you're free to ignore me, not trust my anecdotal evidence, or follow The Official Ostrich School of Problem Management for that matter. I'm just a guy on the Internet. Let's hope for Firefox's sake that your view turns out to be the normal outcome and our experience here has been unusual for whatever reason, rather than the other way around.
You know that quite a few other people have reported stability issues as well, right? If there are no known issues on the bug tracker then apparently Firefox's crash reporting features aren't working properly either, because I am an existence proof that such bugs should be there, and so are several other people I know completely independent of my own systems and experience.
Is there a reason you're persisting with this discussion? You seem determined to prove that the fault here lies anywhere but with Firefox.
The facts are that we have various different systems where we run Firefox, with quite different hardware, OS, users, etc. All of them worked and were stable for a significant time prior to 57. Some of them have not been stable since updating to 57. Most of these systems are used for testing. In some cases they are in controlled environments where we could tell you literally every piece of software that had ever been installed or updated on that machine from new. In some cases they are developers' personal machines and therefore naturally have different profiles, extensions installed, etc.
The only commonality that I can see here is the update to Firefox 57.
I made no claim of "general instability". As I said, please don't put words into my mouth.
Clearly there are cases where stability has got significantly worse for some users. You can see several comments from different people to that effect here, and in Mozilla's own bug tracker for that matter.
Slashdot Mirror
The costs are lower, but so are the revenues and profits. Most creative content isn't produced in big, high profile arenas like Hollywood, and the organisations producing it often aren't working on a scale where Hollywood Accounting tricks are relevant.
Suppliers of course believe that pricing should reflect what the market can bear.
That's an assumption, and not always a valid one. It may be true in most cases at the high end, but at the low end the question is often closer to "Can we afford to do this at all?"
If demand can be increased by reducing price such that more profit can be made, suppliers would be better off. Unfortunately many suppliers are afraid of upsetting existing markets by changing strategies.
Both of these things are true, but the "if" in your first point is important, and some of the fear in your second point is justified. The reality is more complicated than just increasing/decreasing prices resulting in decreasing/increasing demand, even allowing for the possibility of a non-linear relationship between the two.
There certainly have been some success stories of quite dramatic price reductions resulting in even more dramatic increases in sales and ultimately much better results. Steam famously succeeded doing this with their sales, for example.
On the other hand, for a smaller business selling content on a smaller scale, your transaction overheads probably include a fixed cost element as well as some that are proportionate to the price. Obviously that means the lower your price, the more that fixed element is eating out of your margin.
Another one that isn't always considered by those who haven't worked in this sort of market is that people who purchase low value products and services are much more likely to cause customer support issues later. Since they are also generating relatively little profit if you adopt a high volume, low price strategy, one customer support request can easily cost more to service than that customer's entire purchase was worth. So your support overheads are likely to increase significantly if you go high volume, low price as well.
In short, it's not an easy decision to make. I have businesses where we've debated these issues many times, and we've done some experiments, and we know that small changes can make big differences. We also know that it's very difficult to wind back a big cut in your headline price, and that making such a cut and then finding it didn't result in a big enough increase in customer numbers would without doubt result in the business failing. It's easy to look from the customer's side and say businesses should try it, but that's a tough call to make when your staff have mortgages to pay and kids to put through school and you're being asked to gamble with their livelihoods.
Again, you're only looking at the very top end, the unicorn smash-hits that make a bazillion dollars at the box office. Most creative work just isn't like that. Most professional actors struggle to get by and would be thrilled to land a 200K gig. Most of the production team behind professional creative work probably don't feature in the headline credits or get a high salary at all, even in those few smash hits. And in smaller work, which is most of it, no-one is getting big pay-days.
Who would have thought that if you just priced your products fairly you could gain all the market and crack down on pirating easily?
The difficulty is that a lot of people's idea of a "fair" price is wildly out of proportion to average production costs and returns, particularly if you're looking at smaller markets or more niche products and not just the top end Hollywood blockbusters, top-of-charts music, this season's must-have game that are the unicorns in this business.
Read any Slashdot discussion on this subject, and after a few hundred comments you'll find no shortage of people who think that because the marginal cost of online distribution is close to zero, the price should be as well. Go talk to real world customers about your library of original content, and you'll find plenty of people who say they'd buy it if it were a $3 app for the whole thing instead of $10/month. Of course they would like it cheap/free, but that's probably not a fair price unless you have a very large market or very low production costs.
Erm... If you don't like the new approach you keep the one you already have? Just like a lot of people have done with old CS versions?
Besides, I don't see it as inevitable that they will make that decision. You can make a lot of money selling new versions of this kind of software; you just have to have some worthwhile improvements each time.
The thing is, there is relatively little we don't understand about how to build this kind of software. I mean, sure, there are some clever image processing algorithms behind some of the new features, but the fundamentals are what they are. It's within the capabilities of a relatively small team to implement those basics well, and that is exactly what several of these newer competitors seem to be doing. There is no reason you need to be the scale of Adobe to make a profitable drawing package, and no reason you need to incur those kinds of overheads. So while it's certainly possible that some of these new packages won't keep making money forever, Adobe's vacation of the non-subscription market leaves a huge gap and I don't see any likelihood of business drying up any time soon.
Not being able to truly own a car is hardly a hysterical example. It's already the direction that parts of the industry are pushing in.
I'm generally against piracy, but in that case I don't have an ethical problem with it. If you properly bought something clearly intended to be a perpetual licence, and if it came with a tool to transfer that licence to a new machine if you needed to, then any attempt to renege on that deal after the fact by the developer seems to be unethical at best, and finding an "alternative source" for exactly what you would be entitled to run anyway is literally not damaging the copyright holder at all. Obviously the law may disagree and what you choose to do about that is a personal decision.
These days your coffee pot uses OpenSSL. Your dildo probably uses OpenSSL. My lightbulbs just updated their firmware again. Every dumb widget is now "smart" and they all rely on OSS software that they never wrote and don't care how it works.
That may all be true, but I think it reflects more the insanity of connecting everything and depending on so many things by default than any inherent need to be constantly updating software. Obviously anything that actually needs connectivity will also have security and privacy implications to consider, but with many of these things "Well don't make it connected, then!" is a perfectly sensible response.
I missed what was uncertain or locked in about this arrangement.
They could remove an essential feature you rely on, or discontinue a whole application, any time they want.
They could increase your subscription fees to arbitrary levels, any time they want.
I haven't read their current terms, but I'd be surprised if they don't set out some situations where they have a right to discontinue service to your business entirely.
If your lease is running out and won't be renewed, you can always move to new premises. It's a hassle, but it's a well understood process and won't kill your business. And typically you will have several months of notice to plan the move and make transition arrangements. If you're relying on online subscription software for a key part of your business and you get in one morning to find Adobe turned something off, what are you going to do?
Nearly all enterprise quality software require a huge buy in from companies and are not easy to migrate away from.
That's true, but if you have permanently licensed, locally installed software for your essential tasks, you always have the option of just keeping what you had and not migrating at all. If you're relying on a subscription-locked or any sort of cloud-hosted software, you don't have that backup plan.
The current cost of Creative Cloud all-apps in the UK for around two years seems to be about the same, allowing for inflation, as what Design Premium used to cost for a permanent licence.
We have copies of Creative Suite that we bought many years ago, still use from time to time, and have never needed to upgrade. Cloud would already be probably 3x as expensive for our situation, and obviously we'd be locked in and lose the use of it if we ever stopped paying.
I'm still waiting for anyone to highlight a killer feature that would make it worth upgrading from our old CS to current CC versions. Maybe for some people they're out there, but for our needs CS was OK and other applications tend to do a better job with the pain points anyway these days. YMMV.
That cuts both ways, though. I know a studio who use Autodesk products for 3D things. They were "forced" to go to subscriptions as you describe, but it turned out that some of their customers weren't playing that game and stayed on their older versions. It also turned out that Autodesk only let the studio use the last three years' versions on their subscription model, so by four years, the studio was having significant problems supplying data to some of their long-standing customers using established, signed-off formats and pipelines, which was just bad for everyone involved. Someone forgot the old saying about if it ain't broke...
People say this a lot, but the UI for Adobe's Creative Suite/Cloud apps has always been clumsy and inconsistent and they've always been buggy. That doesn't seem to have improved much despite all the new versions or rolling updates since the move to Cloud. There are some areas where some of the newer applications are better than Adobe, and in some cases have been since day 1, regardless of cost.
The home page is pretty bad, but just go to the menu top-right and look at the real product pages. Those are fine. In any case, if you're choosing your creative software based on someone's home page, you're doing it wrong.
maybe this has worked out just fine for Adobe
It would be fascinating to know whether it really is working now that competition is starting to appear and the ongoing costs are starting to bite. However, if you look at Adobe's official statements, it's remarkably difficult to determine what's really going on. The ones I've seen from time to time lack just enough detail that you can't tell whether, for example, expansion into foreign markets in the first few years of Creative Cloud was compensating for reduced subscriptions in the early markets, or whether it's really looking great for them across the board.
The strongest competition for Adobe probably isn't from FOSS like the GIMP and Inkscape these days, but rather from the smaller but commercial outfits making products like Sketch and the Affinity suite. Several companies have already sprung up with products to fill (parts of) the gap left by CS when they went subscription-only, and they seem to be doing pretty well so far.
The Affinity range includes Photo and Designer, with Publisher due later this year.
Affinity web site
If you could actually do arithmetic, Creative Cloud still didn't work out cost effective at the pricing in a lot of markets, and much less so if you didn't upgrade Creative Suite every time, which many users didn't.
We've run away from both Adobe and Autodesk as a direct result of these decisions. Most of our new graphics and UI work is done with tools like the Affinity suite. For occasional 3D modelling work we keep a pre-subscription licence around for compatibility but we're migrating to open tools like Blender for future-proofing. Only a brave person or fool lets their business depend on this sort of uncertain yet locked in arrangement for anything critical to their business, and whether they are a brave person or a fool is probably only a matter of perspective. There are good, realistic alternatives for most casual to moderately serious users these days.
Maybe that should be the case, but the reality is quite different.
Time and again, we have seen that even serious data breaches on a massive scale have no real consequences for the negligent party, even if the data involved is highly sensitive.
Meanwhile, the NHS getting hit by WannaCry not so long ago was headline news for a long time, and rightly so given the crippling effect it had on real world patient care.
The GDPR looks like a significant overhead for small businesses and a good excuse for the EU to fine a few more big US companies, but for practical purposes if the government wants this outcome then the NHS might as well be above the law as far as data protection is concerned. That may be horrifying, but the average UK citizen is probably even more horrified by the idea that they might call 999 and not have an ambulance come or they might get to the emergency department and find it closed down because of malware.
Which is the greater danger, allowing web access in the clear (note that this does not preclude allowing secured access as well) or creating a single point of failure called "Let's Encrypt" such that if it does fail then suddenly the entire world has to start paying money for certificates or finds their sites no longer work properly?
Perhaps we'll just have to agree to disagree on this one. You can tag it WORKSFORME if you like, but in a discussion about why Chrome is increasingly dominating the browser market, you're discounting an experienced web developer telling you that under controlled conditions and a variety of test setups the new version of Firefox has been unstable enough that our team has been deterred since 57 came out. Obviously you're free to ignore me, not trust my anecdotal evidence, or follow The Official Ostrich School of Problem Management for that matter. I'm just a guy on the Internet. Let's hope for Firefox's sake that your view turns out to be the normal outcome and our experience here has been unusual for whatever reason, rather than the other way around.
You know that quite a few other people have reported stability issues as well, right? If there are no known issues on the bug tracker then apparently Firefox's crash reporting features aren't working properly either, because I am an existence proof that such bugs should be there, and so are several other people I know completely independent of my own systems and experience.
Is there a reason you're persisting with this discussion? You seem determined to prove that the fault here lies anywhere but with Firefox.
The facts are that we have various different systems where we run Firefox, with quite different hardware, OS, users, etc. All of them worked and were stable for a significant time prior to 57. Some of them have not been stable since updating to 57. Most of these systems are used for testing. In some cases they are in controlled environments where we could tell you literally every piece of software that had ever been installed or updated on that machine from new. In some cases they are developers' personal machines and therefore naturally have different profiles, extensions installed, etc.
The only commonality that I can see here is the update to Firefox 57.
I made no claim of "general instability". As I said, please don't put words into my mouth.
Clearly there are cases where stability has got significantly worse for some users. You can see several comments from different people to that effect here, and in Mozilla's own bug tracker for that matter.
My profile isn't synced between machines. I use a variety of systems with a variety of configurations, all completely independent.