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Author Topic: So how is that Subscription Service working out for Adobe?  (Read 25638 times)
Pogo33
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« on: January 09, 2014, 07:18:36 PM »
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FYI, here is the quick summary for Adobe's Negative Guidance for the 1st Qtr 2014 and FY 2014:

Adobe Systems, Inc. (ADBE) said it expects first quarter non-GAAP earnings of $0.22 to $0.28 per share on revenue of $950.0 million to $1.0 billion and expects fiscal 2014 non-GAAP earnings of approximately $1.10 per share on revenue of approximately $4.06 billion. The current consensus earnings estimate is $0.33 per share on revenue of $1.01 billion for the quarter ending February 28, 2014 and earnings of $1.60 per share on revenue of $4.36 billion for the year ending November 30, 2014.

So Adobe is going to miss 1st qtr earnings  per share by about 25% (33% to 15%) and FY 2014 EPS by about 30%. It is worth commenting that Adobe had already lowered their 2014 Fiscal Year (FY) estimates as a result of the transition to a subscription formula and had anticipated that they would be back on track in FY 2015. However, with this guidance, I think it will be hard to make 2015 estimates. I would not want to own Adobe stock right now.
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Farmer
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« Reply #1 on: January 09, 2014, 08:17:14 PM »
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Well, a year ago on the NASDAQ ADBE was trading just under 40 and now it's just under 60.  If you go back 5 years it was trading at about 23.  It's never been valued more highly than it is currently.

2002 - 2003 were tough for their share price and, of course, 2009 with the GFC but since mid 2012 things have been moving up and 2013 has been quite good.

Making estimates (or not) is not a good basis for making an investment decision.
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Schewe
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« Reply #2 on: January 09, 2014, 11:20:50 PM »
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Making estimates (or not) is not a good basis for making an investment decision.

Nor is it a useful guide when deciding what software to buy...I pick software based on the application not on stock price nor quarterly/annual earnings.
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David Anderson
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« Reply #3 on: January 10, 2014, 03:34:05 AM »
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Whatever the economics, I like the subscription service much more than the disc upgrades of the past.
Sure, the people that previously stole the soft wear will whinge, but who cars what they think ?   Roll Eyes

Time will tell on the fairness of the price, but I would bet Adobe got the message before the sale price what people are willing to pay.

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chez
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« Reply #4 on: January 10, 2014, 08:39:35 AM »
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Nor is it a useful guide when deciding what software to buy...I pick software based on the application not on stock price nor quarterly/annual earnings.

Bang on. It seems there are people with such a hate on for Adobe that it is starting to affect their photography. If CC is not for you, get something else and close the Adobe door...but continuously watching Adobe with such hate is not healthy. Go shoot some photos instead.
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digitaldog
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« Reply #5 on: January 10, 2014, 09:11:44 AM »
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Totall agreement with Farmer, Schewe,David and Chez. Don't read into the figures anything that solely tires to tie into the subscription model because the story is much larger and more complext than that.
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Andrew Rodney
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« Reply #6 on: January 10, 2014, 04:45:06 PM »
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Interesting how many think what adobe is doing is bad, yet it’s going on all over the place and no one seems to notice.

Given a choice of $9.95 of month to use LR and PS CC, or $25 a month to be a part of KelbyOne (which seems well done and has some great content), adobe is giving the stuff away.  There are all types of cloud service solutions popping up (my absolute favorite so far is Neat Connect, amazing time saver and organizing tool), and considering what you get seems Adobe is a fantastic value.
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digitaldog
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« Reply #7 on: January 10, 2014, 04:53:03 PM »
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Given a choice of $9.95 of month to use LR and PS CC, or $25 a month to be a part of KelbyOne (which seems well done and has some great content), adobe is giving the stuff away.
And color management in Photoshop works, some of the color management advise I've seen on Kelby is at best questionable.  Grin
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Andrew Rodney
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Ellis Vener
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« Reply #8 on: January 10, 2014, 06:40:25 PM »
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I have no idea how it's working for Adobe, Incorporated but for me it's working out great. I'm happier paying my lease for the software I use (Lightroom and PsCC) at $9.99 per month vs. coming up with a single large payment every couple of years.
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Ellis Vener
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Creating photographs for advertising, corporate and industrial clients since 1984.
ButchM
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« Reply #9 on: January 10, 2014, 07:27:17 PM »
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Bang on. It seems there are people with such a hate on for Adobe that it is starting to affect their photography. If CC is not for you, get something else and close the Adobe door...but continuously watching Adobe with such hate is not healthy. Go shoot some photos instead.

Where does this perception of hate come from for you?

Where is it written that when someone isn't a fan of a business model, that opinion arbitrarily equates hate?

I don't now, nor have I ever hated anyone associated with Adobe, Inc. In fact, I have no emotional attachment to any software I use or the developers that offer those solutions. I do have serious concerns and doubts about how the CC licensing model could negatively impact users over the long haul. How you can so easily assume that view is based upon hate and is rather perplexing.

On the matter of stock evaluations, I'm definitely no expert. Though, in this era, stock prices and speculation on future earnings is an extremely daunting task when considering how fickle the market is as a whole. Share prices can change in a heartbeat. Often with no direct result of an individual corporations actions. Ask Apple ... they report record sales drastically surpassing their own estimates ... their stock dropped significantly because they didn't quite meet the speculator's expectations. It would seem to me that we are going to have to analyze much more than a few months of progress with CC to have a true and clear picture of where this is all trending.
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Schewe
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« Reply #10 on: January 11, 2014, 01:59:03 AM »
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Where does this perception of hate come from for you?

Hum...I guess you haven't been paying much attention here on LuLa (and other places). The OP obviously has a degree of glee over what is assumed to be problems in Adobe land...

I won't bother to point you to the various threads here on LuLa where pure hatred has been obvious and prevalent...you can look that up for yourself.

I can tell you from personal experience, NOT adhering to an anti-Adobe stance will get you a lot of grief.

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BartvanderWolf
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« Reply #11 on: January 11, 2014, 03:46:58 AM »
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I have no idea how it's working for Adobe, Incorporated but for me it's working out great. I'm happier paying my lease for the software I use (Lightroom and PsCC) at $9.99 per month vs. coming up with a single large payment every couple of years.

Hi Ellis,

A small point (but not unimportant as the controversy shows), it is not a lease in the common (financial or operational) sense. There is no option to purchase the product (as it then is), at the end of the agreed terms, neither at salvage value, nor at a symbolic price.

You are paying a subscription fee, which means that the use of the product stops after the last payment you (can) make, with a penalty for early termination of the payments. Any access due to dependency on proprietary layer functionality in works-in-progress files will be lost. For some that is a big problem, which spawned the term ransom-ware (pay indefinitely or lose access to your IP assets).

That lack of an end-of-contract option, to having a working solution after the termination of the contract, is one aspect of the negative perception, but the whole situation was initially aggravated by effectively a huge price increase, which was perceived as greed. Also the significant price discrimination between regions for identical downloadable software motivated by tax benefits for Adobe, and an apparent disrespect for a loyal customer group, in particular photographers with a Photoshop centric workflow, didn't help. Don't forget that you now can have a better price, which is due to those who expressed their discontent, not due to the Adobe apologists.

Anyway, I do not think this thread was intended to discuss whether users like or dislike the situation or are happy with the current functionality, some do and some don't like it and some are happy and others are not, but it's rather about how the subscription plan is working out for Adobe, as the title says.

I think it is a bit early to draw any conclusions about that (especially looking at it from outside the company), there is not even one full year that has gone by since the perpetual licensing option was dropped. People were still waiting for the announced Photoshop CS7 then, after being 'urged' to upgrade to CS6 to be even eligible for an upgrade to their perpetual license.

Cheers,
Bart
« Last Edit: January 11, 2014, 07:21:31 AM by BartvanderWolf » Logged
Simon Garrett
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« Reply #12 on: January 11, 2014, 06:16:52 AM »
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Where does this perception of hate come from for you?

On some topics feelings run high, and colourful or emotional language is used.

Look at the many, many threads on the Nikon Df on dpreview.com for one example.  (For those living in a cave, the Df is a new retro-style full-frame camera.).  People tend to strongly like or strongly dislike the Df, and anyone voicing a counter opinion is immediately villified, with escalating language. 

We get the same thing about Adobe.  Adobe are perfectly entitled to move to a rental-only model, and people are perfectly entitled not to like it.  And some people really dislike it a lot, and say so strongly.  As is their right. 

Personally I don't like it much, but I've subscribed.  I used to upgrade Photoshop every 2 or 3 upgrades (when you could do this) and upgrade Lightroom every time.  The new $9.99 subscription works out about the same (in the UK) compared to upgrading Photoshop ever 2 upgrades (and Lightroom every time).  But I'm not very happy, as Adobe systems are pretty bad.  It took me 5 hours or more of phone calls and chat sessions to sort out my Adobe account before it worked, and judging by http://forums.adobe.com/community/creative_cloud?view=discussions I'm very far from alone in this.  People get charged twice, or not at all and have their use of Photoshop suspended.  People change their credit cards (after Adobe kindly gave all our details to hackers) but then the system wouldn't allow them to change their cards.  Some cards mysteriously get rejected.  Downloading CC apps is a precarious and unreliable process.  An update of Photoshop failed for me recently, and I had to uninstall and reinstall it.  That's another 4 hours of my life I won't see again. 

This is no exageration.  Many people have no problems I'm sure, but quite a few do.  Adobe have a lot of work to do improving their customer systems.

Then there is the rather changeable customer policy.  First you could upgrade the last 3 versions of CS apps.  Then only the last.  Then CC rental only.  Then the $9.99 package for existing customers.  Then it was exteneded.  Then it was extended again.  Then for a while it was available to new customers.  Oh, and Lightroom was outside CC.  Then in.  Then, eventually, a rather equivocal promise it will stay available outside CC. 

People don't like uncertainty, and Adobe have been giving this in bucket-loads. 

So with all this, it's really not surprising that Adobe should have attracted a degree of hate over the last year or so.  They've got a bit of work to do to re-establish a stable, long-term environment for customers.  And greatly improve their on-line systems. 
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ButchM
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« Reply #13 on: January 11, 2014, 10:13:11 AM »
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Hum...I guess you haven't been paying much attention here on LuLa (and other places). The OP obviously has a degree of glee over what is assumed to be problems in Adobe land...

I won't bother to point you to the various threads here on LuLa where pure hatred has been obvious and prevalent...you can look that up for yourself.

I can tell you from personal experience, NOT adhering to an anti-Adobe stance will get you a lot of grief.



I guess there is a difference between you and I as far as the perception of emotion on the internet. Or lack thereof.
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kikashi
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« Reply #14 on: January 11, 2014, 01:04:19 PM »
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A small point (but not unimportant as the controversy shows), it is not a lease in the common (financial or operational) sense. There is no option to purchase the product (as it then is), at the end of the agreed terms, neither at salvage value, nor at a symbolic price.

Bart,

There's nothing about the word "lease" which implies any right or obligation to obtain permanent possession of the leased item at the end of the term. There are hybrid lease-purchase agreements, but that's another matter.

Jeremy
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BartvanderWolf
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« Reply #15 on: January 11, 2014, 02:06:08 PM »
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There's nothing about the word "lease" which implies any right or obligation to obtain permanent possession of the leased item at the end of the term. There are hybrid lease-purchase agreements, but that's another matter.

Hi Jeremy,

I was not giving a definition (because there are various forms of lease possible, indeed), but pointing out that there is a difference between paying for access to a (usually tangible) property, and a subscription (a type of contract) for a license to use.

Lease
Subscription

Cheers,
Bart
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Farmer
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« Reply #16 on: January 11, 2014, 02:09:56 PM »
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It's far more like a lease than a subscription.  A subscription generally (and in reference to the link you provided, Bart) provides some permanent benefit such as a copy of a magazine on a periodical basis.

A lease, on the other hand, provides access to something for a period of time in return for consideration (payment) but ownership is not passed on.
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BartvanderWolf
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« Reply #17 on: January 11, 2014, 05:04:56 PM »
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It's far more like a lease than a subscription.  A subscription generally (and in reference to the link you provided, Bart) provides some permanent benefit such as a copy of a magazine on a periodical basis.

A lease, on the other hand, provides access to something for a period of time in return for consideration (payment) but ownership is not passed on.

Hi Phil,

The distinction revolves around property or a contract. Two different things.

Cheers,
Bart
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Schewe
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« Reply #18 on: January 11, 2014, 05:09:05 PM »
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The distinction revolves around property or a contract. Two different things.

Bart, quit while you are ahead...renting or leasing has nothing to do with "property" per se...and in terms of contracts, they can apply to either tangible or intellectual property. It all boils down to what property rights are being offered/transferred. Leasing doesn't automatically include an option to buy the leased item at the end of the lease...many do but many do not.
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Glenn NK
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« Reply #19 on: January 11, 2014, 05:37:24 PM »
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1)  Owning a stock in a company is optional - I think.

2)  Stocks rise and fall - the usefulness of a software doesn't seem to move in a parallel direction.

3)  I'm not presently using the subscription service, but from what I read (on half a dozen forums), it's working quite well.

All of which makes me wonder what the point in the OP was?

Glenn
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