If Everyone Hates Adobe, Why Is It Pulling in Record Profits?

If Everyone Hates Adobe, Why Is It Pulling in Record Profits?

Last week, Adobe reported that the fourth quarter of 2019 was the most lucrative in the company’s history, delivering annual revenues of $11 billion. Given that it’s rare to hear a good word said about Adobe in the world of photography and videography, why is the company still so incredibly successful?

You don’t have to look far to find photographers complaining about Lightroom: it’s slow, its masking functionality is put to shame by the likes of Capture One, its ability to edit skin tones is surprisingly limited, and the workspace cannot be customized. The near-unavoidable Creative Cloud Desktop app is bloated, constantly up-selling, and frequently misleading. Perhaps by far the biggest bugbear bemoaned by customers is the subscription model: no other photo editing software ties you in for 12 monthly payments with the ever-present threat that the price could be hiked at any moment. 

Adobe Rush is not free

From this, you can probably appreciate why I thought Adobe Rush was a free alternative to iMovie. One of the many slightly misleading aspects that makes Adobe's software obnoxious.

For many photographers, Adobe has them tied into a contract and thus has no incentive to innovate, fix bugs, or offer significant upgrades, but it’s not just photographers who are complaining. I’ve heard from more than a few videographers and filmmakers recently who have announced their move from Adobe Premiere Pro to DaVinci Resolve, citing stability issues and corrupt project files. Premiere can be buggy, especially if you’re on a PC running hardware that’s more than a few years old. Many users complain of customer support being incredibly slow responding to inquiries, bug reports that are seemingly ignored, and that the beta forums for some packages have become farcical.

Is Adobe Too Big to Care?

The recently launched version of Photoshop for iPad seemed indicative of how Adobe now treats its customers. No doubt, huge companies draw greater criticism simply by virtue of being so huge, but for many, the car crash that was Photoshop for iPad demonstrated a complete lack of respect for users. Instead of getting enthusiastic fans on board by exhaustively testing and evolving a new product, Adobe seemed to rush it to market, creating an application that received countless caustic reviews.

Photoshop screengrab

I recently did a job that required a lot of compositing, something I'd never done before. Not something I'd like to try on the iPad.

Given all of these problems and the emergence of so many competitors — Capture One, Skylum, and Affinity to name but a few — why is Adobe still proving so unbelievably successful? Creative Cloud subscriptions account for the largest part of Adobe’s revenues, and from the noise, surely, dissatisfaction and customers migrating elsewhere would have an impact? Apparently not, and shareholders must have been delighted when Adobe’s share price spiked by more than 4% on December 12 at the news that revenues for the year were in excess of $11 billion.

That is a phenomenal amount of money for a company that makes niche software. This is not an operating system that is integral to every machine out there or a word processor that even your nan needs to have installed. This is hardcore, professional-level, commercial software with a comparatively limited customer base. Through sheer innovation, Adobe established itself as the industry standard across numerous professions, but how long can this last? Apparently, for the foreseeable future.

The Subscription Tsunami

Adobe realized early that software as a standalone product was not going to deliver profits forever. Eventually, demand was going to drop-off — potentially coinciding with a slackening of innovation from its developers — and Adobe was smart in predicting that its sales would reach saturation point. The number of new customers would eventually decline, and those who already owned the software were not about to blow a chunk of cash on an updated version that was barely an upgrade.

Software as a service was the future, and it brought other hooks and advantages as well. Tapping into customers’ Gear Acquisition Syndrome was now much easier: users might feel reluctant to hand over several hundred dollars for something that offered only an incremental improvement, but paying $10 a month to know that you were always using the latest and greatest version was reassuring.

Lightroom screengrab

Lightroom. Dependable. Occasionally sluggish. Hard to leave.

Secondly, cloud service companies such as Dropbox were already using this model, and if this type of functionality could be bundled into the deal, it would both justify the ongoing fee as well as trapping customers into an ecosystem. If your raw files are all in Adobe’s cloud, while it’s not impossible to move systems, it definitely gives you an extra incentive to stay put. Encouraging lethargy is a great way of retaining customers.

Thirdly, this model can feel to many like a monthly subscription but is in fact an annual subscription that is paid by the month. Opting to pay for the entire year in advance will not save you any money, and even if you choose to pay for 12 months, Adobe will hang onto your card details so that it can process the renewal when it comes around. (Given that Adobe inadvertently exposed the data of 7.5 million customers a few months ago, this might not be ideal if you’re protective about your information.) This monthly fee feels less expensive, and psychologically, it gives you the misguided sense that if your circumstances suddenly change, this is a financial burden that can be immediately canceled. Of course, it’s not that simple: there is a fee if you want to cancel your contract early.

The final piece of this puzzle that secured Adobe’s transition from goods to services, from selling to renting, was the disappearance of the option to purchase outright. While subscription and standalone options stood side by side for a while, sales of Lightroom 6 stopped earlier this year, with the last copies being snapped up from online retailers in March and April. You might recall that back in 2013, Adobe promised users that it would always offer a standalone version of Lightroom available to purchase with a perpetual license: “Future versions of Lightroom will be made available via traditional perpetual licenses indefinitely,” its blog calmly explained.

So, was Adobe telling the truth as it saw and things then changed, or was it telling customers what they wanted to hear to prevent unnecessary upheaval?

The Photography Bundle Is Massively Discounted

In Adobe’s defense, it could be argued that the plan for photographers is comparatively cheap. Lightroom and Photoshop together come to $9.99 a month, which seems like a bargain when you consider that Photoshop as a single app is $20.99 per month. Why anyone would choose to pay for Photoshop on its own considering that it’s less than half the price if you rent it with Lightroom is a mystery, but that’s the standard fee for individual apps.

Photoshop. Cheap at half the price.

Photoshop. Cheap at half the price.

As the model goes, it makes sense. There are millions of amateur photographers willing to pay a small fee per month that probably wouldn’t pay a large fee. Adobe gets a ton more customers, which more than outweighs the reduced price — a million customers paying $10 a month pulls in more revenue than 100,000 customers paying $20 a month. By contrast, there are far fewer video editors or designers than photographers, and they will pay more for an individual app, especially when it’s more likely to be a profession.

The problem starts when, as a photographer, you have Lightroom and Photoshop, but want to do some video editing. Adding Premiere — one single application — to your bundle triples the cost of your subscription. Because of this, I opted to buy Affinity Publisher outright for around $50 rather than rent InDesign for the year for more than $250.

Affinity Publisher screengrab

If you feel the urge to self-publish a book, Affinity Publisher is your most cost-effective professional option.

Not only that, but one has to wonder how long this Lightroom/Photoshop photography bundle will last. Earlier this year, Adobe claimed that it was “testing” new pricing options when visitors to its website noticed that Lightroom as an individual app was $9.99, but bundled with Photoshop, the price was suddenly $19.99. Perhaps this was some A/B testing happening in certain parts of the world, but if those are the options when renewal time comes around, many will be ditching Photoshop and paying a one-time fee for Affinity Photo or Pixelmator Pro in its place.

If Adobe decides to implement this change, there is a chance that customers renting one app rather than two will then be more inclined to ditch Lightroom completely in favor of something else. Hopefully, for us customers, that’s enough for Adobe to hold off.

Will the Competition Follow Suit?

What seems more likely is that competitors will follow suit with the subscription model. No doubt, lots of small software firms initially saw Adobe’s move and thought they’d been given a up: while Adobe would push customers away with subscriptions, they could Hoover them up by continuing to offer one-time fees. However well that may have worked for Adobe’s competitors, Adobe has proven that the subscription model is lucrative, and it may only be a matter of time before one-off purchases become a thing of the past across the industry. Affinity and Pixelmator are both a single purchase, but they’re still under heavy development, and while many professional users will have migrated, Adobe still has a very stiff hold of the industry, and one-off fees make these alternatives stand out — for now.

Capture One currently offers both a one-time fee and a subscription, but will it eventually follow Adobe’s lead and become subscription only? It has no plans to switch, but unlike Adobe, it doesn’t want to rule it out before possibly changing its mind.

Adobe Can Do Whatever It Wants, But for How Long?

This being a free market, Adobe can charge whatever it wants, and customers will decide what’s best, but Adobe’s dominance is going to take time to shift, and the company is clearly not afraid of exploiting its position. There’s a huge volume of tutorial content for Adobe products, and any budding young digital creative thinking of ditching freelance life and working for an agency will be expected to know Adobe products inside out.

Fortunately, companies such as Affinity are leading the charge and seem to have the funds to be able to offer their software at very affordable prices. Right now, Affinity Photo is just $49.99, and a perpetual license costs less than two and a half months of Photoshop. If and when the Lightroom/Photoshop bundle gets its price hike, I highly recommend reading this article from Fstoppers' Wasim Ahmad and doing the 30-day trial.

A screenshot of Affinity Photo. Source: Serif.com

A screenshot of Affinity Photo. Source: Serif.com

In time, Adobe’s slowing innovation, dishonorable marketing tactics, and lack of respect for its customers may have an impact, especially as competitors match features, produce more tutorial content, and continue to undercut Adobe on price. Revenues might be at record highs for 2019, but as 12-month contracts begin to expire and the alternatives keep getting better, 2020 might be a different story.

What are your thoughts? Leave a comment below.

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115 Comments

Usman Dawood's picture

Cause it's cool to hate on Adobe just like it is to hate Coldplay :P

Deleted Account's picture

yeah but, Coldplay really is bad. :)

Christian Lainesse's picture

That's why I switched to Nickelback.

Gion-Andri Derungs's picture

ouch, from bad to worse... ;)

Usman Dawood's picture

I shouldn't have been drinking tea when reading this comment haha.

Nah. Adobe really does suck.

R G's picture

Gents now THAT was a funny tread ! Happy New Year Everybody !

Paul Topol's picture

I agree with all of the above. Have a look at what us Australians pay. Outrageous but what are the alternatives?? I have used Capture One since version 3. Outstanding! But what are my alternatives to the rest of Adobes Suite??

Affinity Photo, DaVinci Resolve

Wheres Affinity Lightroom or Lightroom Mobile? Would love to use that whenever it arrives

Every ad agency and corporate entity I've encountered that's hiring freelance video editors is using Adobe. The subcription fees are a pittance to them; the integration between video editing, photo editing, and motion graphics programs is clutch; the software is powerful; probably not many people who are hiring the freelancers are intimately aware with the bugs and hiccups; and they have institutional inertia to keep using what they use. For stuff I edit at home, I've switched to FCPX - even though I prefer the tools available in Premiere, I need stability above all else. It doesn't hurt that I can outright own the software for the price of a year's subscription to Premiere.

This post was well-written. Adobe can only get away with this because they have an effective monopoly. To be clear, I'm not arguing that there aren't alternatives—particularly to Lr. But for anyone who has to maintain editing access to literally decades of work, it is often only Adobe's own products that facilitate this. Resolve is not going to open a Premiere Pro project with embedded After Effects tracks in it. C1 can't open a RAW file edited in Lr and preserve the edit. To say nothing of the decades of knowledge and training many have accrued with Adobe products.

As far as Capture One goes, they may not outright cancel perpetual licensing but they've taken steps to try to force users into a subscription. Upgrading to C1 v9 was $79, if memory serves. V10 was $99. V11 was $119, V12 was $149 and a V20 (really V13) upgrade is $159. In five years, the price of upgrading has doubled! They've also established a penalty for anyone that decides to skip a yearly upgrade. For V12, the penalty was $20. For V20 it is $50. Capture One also eliminated educational discounts for perpetual licenses so students either rent or buy a new license every year which is actually less expensive than a full-price upgrade. The bottom line is that anyone looking to Capture One to rescue them from the tyranny that is Adobe's rental scheme might want to re-think their strategy.

Johnny Rico's picture

This is the response.

Rayann Elzein's picture

Thank you for the cost of upgrades on C1... This is not publicly mentioned on their website. I have for now cancelled my Adobe subscription (due to renew for 1 year in mid-January), but the purchase price of C1 20 is quite a deal-breaker right now. And then in 1 year I have to fork about 50% of the price of the software purchase to get it updated? No thanks...

Thomas H's picture

I do not see Capture One forcing people into subscription. I just upgraded from C1 V12 to V20, both at a substantial discount. I see rather that they experiment with lowering or at the least keeping the prices stable in order to maximize the famous "n*p-(n*m)" (number of users times price - number of users times averaged cost for service fixes.) Remember, making an extra copy of a software is virtually free of cost.

Andy's post is really great, avoids polemics and touches the kernel issue here, that for agencies the subscription is a pittance, and to millions of people renting is giving the illusion of affordability. Think of a car leasing in this context. How many people drive that Mercedes or BMW on a lease contract? Either way, the financial results give Adobe surely a justification for their course.

Stuart Carver's picture

Because it’s actually very few people who hate Adobe, negative comments are always the loudest.

Dave Morris's picture

Precisely my point. Personally I have both LR and C1 license and unless I need some advanced skintone corrections, the LR is my tool of choice. In fact on well-calibrated equipment and when using good profiles (google for RNI film profiles) it beats C1 hands down, it just renders better colors. And it is pretty fast in its latest versions.

Stuart Carver's picture

I dont personally use it, and i try to avoid paying subs on anything (a personal goal of mine was to have the least amount of money possible leaving my bank each month) but its definitely good software, and the market leader.

I think the "who does color better" argument is quite subjective because IMO and many others C1 does color way better than lightroom and others think lightroom handles color better than anything else out there. Does C1 function better than LR? In my uses across 4 different computers C1 is functions vastly better than LR in the sense that C1 doesn't crash or slow down to a babies crawl like LR does after 15 images. I'm sure it works fine for you but in my experience it's been nothing but trouble. LR's merge functions are legit though. They work really well. the color thing is kind of like having two people order a sandwich and one person keeps the tomatoes while the other takes them off. Some people like tomatoes ( home grown acidic awesomeness yumm) and some hate tomatoes. Some people like LR color and some like C1 color. People use what looks good to their eye.

Rayann Elzein's picture

This is exactly what I'm experiencing. LR crashing regularly or becoming unusabely slow after editing a few images (not even 15!), forcing to close the program and restart it. But indeed, what I'm most "scared" of by leaving LR, is the ability to merge so easily and painlessly to HDR (not that I do "HDR" photos, but sometimes it's nice to merge 2 differently exposed images to increase the dynamic range, and LR does this so nicely without giving this awful HDR look that was so hype a few years ago).

Yep yep. I have no idea why it slows down so much so fast. I have tried everything from optimizing catalogs to removing them entirely and just keeping one catalog linked up to LR at a time. When I try to use any sliders after about the 14th or 15th images it lags sooooo bad and I can never get it to go exactly where I want the sliders to go. If I tap the arrow keys it takes a full second to two seconds for the slider to move. To me that is completely unacceptable. I don't like smack talking LR but when there are problems like this I'm going to say something about it. I just want it to work. I don't want to have to over haul my workflow and learn a new program because Adobe won't work on making sure their software is stable to use.

That said I really do like the LR merge functions a lot. It has helped me with real estate photography so many times. i even used it after putting together 9 images of a tower for dynamic range like you do. It's incredible the amount of editing leeway you get. the final image was about 1 GB though lol.

Rayann Elzein's picture

The only thing that "worked" for me was uninstalling all Adobe programs from my computer, and reinstalling everything. Well, I say it "worked", because it was smooth as butter for 3 days, before it turned back to slow and painful like before, and not allowing a full edit session without restarting the program countless times.

I tried using light room today and it will not stop crashing. Every single time I try to import photos it crashes. I'm reinstalling it right now so hopefully this will fix light room long enough for me to get my job done.

R G's picture

Scoops Fantastic : this sounds like you're working with a PC !?!? .... might wanna switch to a MAC !

haha nah I'm good. I have owned three macs and they were all incredibly slow. There were some things I didn't like about the OS too but i chalk that up to me growing up on windows and just being used to how windows works and the control it gives me. macs aren't all bad though. I love apples screens and track pads. top tier stuff. I am how ever super disappointed in the lowered quality of their consumer products lately. they used to be known for having products that last a long time. now a ribbon cable goes bad before the warranty is up and they want you to drop a grand to replace the entire logic board when you only need to replace the $10 ribbon cable in turn not solving the issue at all. Macs have sped up with the advent of SSD's though so that's super nice. I also don't like the thermal throttling mac laptops do to keep the CPU from melting due to inadequate cooling because "it's gotta be thinner". This makes that super nice i7 processor almost useless because you can't run it at its full speeds. I like that the mac OS is an OS that literally anyone can pick up start using right away with out having to worry too much about installing things before you can even use the computer. You have a pretty decent browser right off the bat with a whole suite of stock software that you actually want to use. Windows is waaaay behind when it comes to that. I stick with windows because at least for now it gives me the most control over my computer and doesn't penalize me for using my computer how I want to use it. i can also fix it my self for super cheap if any thing goes wrong and i don't have to worry about #datdonglelife. Apple used to be great. My friends 2011 MBP is STILL trucking along. it's a great computer. There are things I like about mac and even more things I don't so stick with windows. I'm trying not to bash people that use macs these days because i understand people just use what they prefer and each platform is better at doing certain things, but I admit that sometimes it's reeeeaaal tough not to lol.

Reginald Walton's picture

I hear the same complaints about Adobe and don't even try to give a reason they do this or you'll be accused of either working for Adobe or owning their stock (the latter I wish I did). But as it was stated, it's easy to pick on Adobe and other giants like Apple and Microsoft and others. Some people tend to think that they should just pay one price, one time and get all the updates and bug fixes etc. forever, as if the employees at Adobe shouldn't be paid. As I've pointed out, we use the subscription model for other things too, like Internet, Mobile phone service, Cloud storage etc, so not sure why people hate on Adobe for it.I also keep hearing the argument that Adobe has them by the balls b/c there is no other competition. Not true anymore, but never the less, people still complain. But hey, what would life be if we didn't have anything to complain about? And for full disclosure (not that it matters), I do use LR, but I also use Capture One and purchased it outright b/c their subscription for the "all cameras support" version is double that of Adobe's.

Thomas H's picture

If my memory serves, Microsoft started 1st this renting scheme, with their office. Here is an example how this works for individuals: My wife came to the conclusion that her old MS Office was too old, and paid $99 for the new version subscribed for one year. She wrote a few papers, maybe 30-40 pages total. I used Open Office for my rare letter writing. At the end of the year she renewed, wrote one letter and since she has not written any papers any longer, Office expired again. And so effectively she paid $99 for composing one single page letter. Luckily one can open these papers or PowerPoint slides with Open Office, mostly... This extreme example shows the absurdity of renting software, unless you use it constantly.

So professionals might like the Adobe's renting and getting constant updates. For most people who might not touch that camera for 6-7 months at a time, this really does not make sense, and even threaten them to lose their work when they stop paying. I am happy with my LR 6.14 for older stuff and the C1 for all new needs. I also got the Luminar 4 in their promotion for these crazy sky replacements etc, but if it comes to the interface in total, I am still not "in love" with them.

Having used Desktop LR since the early days, the day they pull the desktop version is the day I’m gone.

Ken Flanagan's picture

Who hates adobe? I think it’s a great tool. If it starts to suck I’ll get something else. Man I must be disconnected from people in the industry.

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