I’m a fan of subscriptions. My Video Training Library is subscription-based. Subscriptions can flatten the extremes of cash flow between releases.
But, this evening, I needed to cancel several seats of my Adobe Creative Cloud for Teams membership and discovered some gotcha’s that I want to share; along with recommendations that Adobe should consider adding to their subscription service.
Adobe offers multiple pricing models where you can either pay month-to-month or annually. Not surprisingly, an annual subscription costs less per month than a monthly subscription. You can add team members and shift them around with no penalty.
But, tonight, I needed to either significantly reduce my team member count or cancel my subscription. Here I discovered elements in the fine print of which I wasn’t aware.
RISK 1
Cancelling a subscription does not damage any of your data. However, if you don’t have a subscription, you can’t access it because the applications themselves won’t launch.
Full-time professionals won’t really care, because they need these tools for their work. But, now, I better understand the concerns of hobbyists who dabble with their creative side, but don’t earn a living with it.
As I considered canceling my subscription I realized that I would lose access to hundreds of gigabytes of existing data.
COMMENT: In the case of Premiere, we still have access to all our source media. But, with Photoshop, After Effects or Audition the source media isn’t as important as what we do with it in the application.
It would be nice if Adobe offered a “Reader” application that allows us to look at the contents of a Photoshop, Premiere, After Effects, or Audition file without allowing us to make changes to it. At least then, we could review past projects to see what we did.
RISK 2
When you cancel an annual subscription, you pay 50% of the remaining portion of that subscription, with the price calculated at the higher monthly, not annual, level.
In my case, I canceled a seat with 10 months left on the second year of my agreement. This meant that I paid a $349.50 cancellation fee.
I’ve been a member since Adobe shifted to subscription pricing in May, 2013. However, because I am on an annual contract, my penalty was not based on how long I’ve been a member but how much longer my contract has to run.
COMMENT: It would be nice if Adobe provided some sort of reduction of the cancellation fee based on how long we’ve been a member. Financial constraints are not always foreseeable.
RISK 3
As Adobe support wrote: “Renewal for Adobe subscriptions are automatic and also all one year plans are rolling memberships which means if the membership isn’t canceled in the last month of the first year, it will automatically roll over for another year with a new annual commitment.”
The kicker is that it is not possible to flag an annual subscription so that it doesn’t renew. Worse, you can only cancel a subscription in the month just before your account renews. In my case, my subscription renews on February 7. This means I need to contact Adobe on January 7 to cancel; and not before.
COMMENT: I understand that it is generally a good idea for subscriptions to renew automatically, as most people want their software to keep working. However, Adobe should make cancelling an annual policy a LOT easier. At a minimum, it should allow us to flag an account not to renew at any time during the subscription so that we don’t automatically renew when we weren’t watching.
SUMMARY
I think subscriptions are good idea; in many situations, they operate smoothly and benefit both us and developers. However, in Adobe’s case, improvements could be made that would make subscriptions less harsh for subscribers.
As always, I’m interested in your comments.
Larry
28 Responses to The Darker Side of Subscriptions
Newer Comments →-
Peter says:
April 6, 2016 at 5:14 am
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Justine says:
April 7, 2016 at 3:59 am
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RSK says:
April 7, 2016 at 6:13 am
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Larry says:
April 7, 2016 at 7:31 am
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Justine says:
April 7, 2016 at 8:25 pm
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Terry says:
April 11, 2016 at 9:24 am
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Robert says:
April 13, 2016 at 12:30 am
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Robert says:
April 13, 2016 at 12:51 am
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John Fishback says:
April 7, 2016 at 7:02 am
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Gabe Strong says:
April 11, 2016 at 1:43 am
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Allynn says:
April 11, 2016 at 4:26 am
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Jim McQuaid says:
April 11, 2016 at 4:47 am
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Sparkman says:
April 11, 2016 at 5:06 am
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Teijo says:
April 11, 2016 at 5:18 am
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phil sheldon says:
April 11, 2016 at 5:26 am
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Chuck Green says:
April 11, 2016 at 6:02 am
Newer Comments →These are some of the reasons I dropped Adobe several years ago and have not looked back. There many usable alternatives out there.
Also known as Hotel California business model, “you can check in anytime, but you cannot ever ever check out”.
This form of subscription is shockingly rife with abuse and locally here in South Africa, we have a wonderful set of consumer protection laws to prevent the abuse of the consumer with hefty “fines” as you describe.
Adobe suffers no loss if you sign up for a year and then decide to cancel, they did not at any point incur expenses to the level of the fine, they already incurred the loss prior to you signing up, and your subscription payment reduces that loss, and when enough users sign up, the loss is thus profit, for a short time until upgrades occur.
What I suspect is occurring is Adobe is suffering long term sustained loss due to 1-piracy, 2-movement away from subscription based software, namely FCPX.
As a result, they need to mitigate the loss with an unfair tax or fee for withdrawing, there is no loss due to the software, as you do not own it, it is a binary code of 0’s and 1’s stored on a server, you download a copy, the loss to Adobe is already in place.
Adobe has a flawed unsustainable business model that will lead to failure, it has to, subscription only is really a failed legal ponzy scheme, in that the new subscribers sustain the already subscribed, and with no new subscribers, Adobe has to find ways to sustain income through tax.
Along with this is the blatant and sustained piracy, which reduces the number of subscribers, maybe the technology does not prevent the pirates from accessing the cloud and using the technology paid for by subscribers, in essence more users than paid users, more resources required but not paid for, again a loss, and the legal paid users pay for this loss, a gym giving away too many comp tickets, failed!!
Adobe refuse to sell hard copies, Apple can sustain loss from piracy through the selling of hardware, Adobe has nothing of the sort to sustain the slide into chapter 11.
It will happen, and really it has to happen soon, Adobe is a legal ponzy scheme, and I really would be so surprised if in the next 24-36 months this is in fact what is discovered, I am calling Adobe a ponzy scheme, it smells, it sounds, it walks, it talks, it looks, and is a legal for now ponzy scheme, nothing will convince me otherwise!!
Wow! A really big +1 for that! You nailed it 100% and echo pretty much exactly the same thing I’ve been saying from day one. THIS passage alone:
“Cancelling a subscription does not damage any of your data. However, if you don’t have a subscription, you can’t access it because the applications themselves won’t launch. […] As I considered canceling my subscription I realized that I would lose access to hundreds of gigabytes of existing data.”
… says it all. I’m sorry for not getting why *anyone* would actually voluntarily sign up for such a ludicrous model, literally paying RANSOM money to a big company for your own work?!
Some call is “Adobe subscription”, I call it “LOCKY VIRUS”.
I’m so glad that FCP X, Motion, Affinity Photo and many more are making it easy and pleasant to ignore Adobe after almost 20 years of actually really loving a lot of what they were doing (first and foremost AE). All of which are blazingly fast and built on new and modern code (neither of which Adobe apps claim in comparison) on top of being an absolute *steal* price-wise.
If I ever actually should need an Adobe app for age old files, the hacks and cracks are plentiful. But then I still OWN CS6, so I wouldn’t even need them.
Justine:
While I appreciate your comments, I don’t agree that subscriptions are a “Ponzi scheme.” Subscriptions, for many developers including me, solve the long-term problem of inconsistent cash flow. So I do not condemn subscriptions outright.
I do, however, have concerns on the process and penalties of canceling.
Larry
Hi Larry,
No not all subscription based services are ponzy, Adobe is a giant ponzy scheme, everything about it says PONZY, no box set sails, only relying on subscription, heavy penalties for quitting, hallmark classic signs of a ponzy scheme!!
Subscription based services do play a very important role in many industries, but when it reaches a saturation point, no new “investors” as really that is what you are, income and expenses do not tally up, and in the case of Adobe, more users of the system than those paying, it will only lead in 1 direction=chapter 11 bankruptcy.
People are either leaving, or pirating, but having access, which fewer and fewer users pay for, so costs have be borne by those remaining, or those leaving get punished with high “taxes/fines” on exiting!!
Adobe is a classic ponzy scheme, yes it has a classic established brand, everyone knows it, so how can it be a ponzy scheme, the way it conducts business with a single mode income, 100% subscription only=ponzy!!!
Hi Justine,
“Ponzi Scheme” was named after Charles Ponzi, a swindler/hustler from the 1920s, not “Ponzy”. Makes it easier for people to reference if we’re all on the same page. Your point is well taken, but Larry’s point about the value of subscriptions to level the cash flow in businesses that support the worth of the subscriptions to their clients is something that is becoming more important in some business models.
“… solve the long-term problem of inconsistent cash flow”
[ Larry’s note: See Robert’s second comment, below.]
Huh?? That makes no logical sense. If I’m forced to *continually* pay more and more, be it monthly or even annually, then how can THAT in anyway solve a LONG-TERM problem of inconsistent cash flow?? I’d say it’s what it in fact affects exactly that very NEGATIVELY. If I can’t afford a month…. BOOM, I’m locked out of my own work the next day! How in the world does that strike anyone as acceptable??
What solves it is what Apple has thankfully done! ONE TIME payment… period. But even if they moved back to asking lower prices for bigger updates I’d be *exponentially* more accepting of that than the nonsense Adobe is doing.
I agree with Justine and RSK 100%!
(and jumping on small, irrelevant typos is just plain jejune)
Ah, wait… took me a second. Now I get it. You were arguing from the RECEIVING end! Erm, yeah. For ADOBE (and yourself, even though I see very little comparison between the two entire different business models and subsequent ROI for THE USER) it’s a brilliant scheme! But that’s not what Justine etc. were arguing. So I think you missing (or ignoring) the actual point.
Let’s put it this way: had I paid the CC model for as long as I’ve had FCP X (since day one), I’d almost be at 3 THOUSAND dollars that I would have spent, as opposed to 3 HUNDRED. Or even less than 600 if you want to include Motion, Compressor and Logic! With Adobe it continues to cost more and more, with the latter it costs LESS over time. Nuff said.
I agree with Peter. We’ll drop our subscription when it’s time to renew. We’ve already transitioned to using new software.
I called this back during CS6, I just KNEW Adobe was going to go to subscription only. I had just switched over to CS6 from FCP 7. FCP X was just too different for me to learn, so I jumped over to Adobe…..and I actually liked their software. Then I started hearing th ‘talk on the street’ and knew where they were going. Soon enough, I was proven right. And right then and there, I decided I was not going to stay with Adobe. While you may be a fan of subscriptions, Larry, I most definitely am NOT. They make it very easy to ‘opt in’ and very, very hard to ‘opt out’. And I’m just not the kind of person who likes having money ‘automatically and painlessly’ sucked out of my account every month. I know there are many people out there who need to have the ‘latest and greatest’ but I like driving my 12 year old car that is long since paid off, and using my 2009 Mac Pro that I have upgraded myself. And so I looked for alternatives, and found them in FCP X, Motion, Compressor and Affinity Photo. Yup, there was a learning period. But now, I’m glad I did it. Every month that goes by and I don’t pay a subscription. And yet, when new versions of my programs come out, I get updates to them as well….just like the Adobe users. I will not pay Adobe another cent, as long as they stick with subscriptions. I don’t make any more money using their tools as opposed to the ones I have……so it’s only smart business on my part. By switching to non subscription software before CC started, over the years, I have saved enough money to buy a new camera, or a couple lenses, or a new computer.
Larry, thanks so much for commenting on this! You know I’ve had my fair share of problems with the “clod” (and thanks for your help on that too!).
We are currently dealing with juggling an expired team license (that I manage), an enterprise license (that isn’t fully in place yet and is two upgrades behind) and a personal license tied to the enterprise which hasn’t been officially rolled out yet (but we have to use it for a couple of people who need to be current). All of this at the end of the semester when everything is due! I’m so glad I have my own, personal, license that actually *works* (most of the time).
I like Adobe, I really do. I don’t even mind the subscription system because it gives me access to programs like After Effects that I never would have learned otherwise. But the management of the Cloud (in its many iterations) is a royal pain in the ethernet! It is especially awful for teams and groups… oh yeah… and device tied licenses… it’s bad for them too.
I wish Adobe would fix this but it doesn’t really seem to be a priority since businesses (and schools) who rely on Adobe products have to buy them regardless of the hassle. Otherwise – No software for you!
The word subscription is the problem. If I subscribe to a newsletter and quit, I still can read the previous issues. With Adobe, there has to be a different word and it’s close to “indentured.” I am exploring alternatives to photoshop for just this reason and will never use any of the so-called Creative Cloud software
I do not purchase Adobe products anymore, I had no need to be a part of their subscription service, and I agree with Larry that there should be more considerations for the customer in subscription cancellation, but it is not a Ponzi Scheme. The definition of Ponzi is below.
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors.
There is no promised financial yield from Adobe, and they would not need new investors to pay for the outlay to old investors.
Furthermore, the comments about people leaving Adobe may be true, but you offer no evidence of it. More and more people that I know tell me they are using the subscription service, and are happy with it. This is not enough people to make these statements true or false, but statements themselves, without evidence, cannot be determined as true or false.
I agree with Larry that subscriptions are not always bad. A case in point is this very site, which is in effect an educational resource/content provider. However, the difference between a school/content provider and e.g. Adobe is that while whatever you learn stays with you, tools you have to pay to use are ephemeral. This is dangerous.
Some years ago I was part of a project that sought to acquire a license for a high-end data compression system the client wanted to use for a medical application. What scuttled the deal—and quite rightly so—was that the developer insisted on a business model similar to what Adobe currently uses. We were told that if the client did not keep paying the data would became inaccessible.
Inaccessible medical data equates to dead patients. This scenario is easy to understand. I don’t think anyone would deny it is an untenable proposition.
Although Adobe has tried to portray its subscription license in a positive light, the consequences, while less extreme, are similar. While terminating the subscription may not cause your clients to die, it will inevitably result in loss of assets.
As long as you have a license—a true, traditional, permanent and irrevocable license—you have control over and can modify and export the data you have created and for which your clients most probably have paid. If you wish to change to another production environment the data is still available, although some acrobatics may be required to export/convert it.
If you are only renting a subscription, you in reality have no control over anything you’ve created. If Adobe decides to raise its annual fees ten-fold you either forsake your creations or pay the ransom. If Adobe goes bankrupt you’re at the mercy of its creditors. While you will still own what you made, you’ll have lost control over it.
Would you open a hospital with the knowledge that all of your equipment would stop operating the moment you’d stop paying rent to its manufacturer? A factory?
To me it appears that the situation is the same. Yes, all may seem good for now. The cost does seem reasonable to a professional. However, by agreeing to the subscription model you make a permanent and irrevocable commitment to pay Adobe forever for anything you create that you may even remotely want to use again some time in the future..
Hi there, in my studio of photographers and graphic designers, we were version jumpers, and quite happy with it. If cs2 did what we needed it to, we didn’t automatically upgrade to cs3 etc. Consequently we are all still using cs4 and 6. On my last upgrade, i budgeted for and upgrade to cs6 but then could justify £1500 for 6 year old software with no support. We are a small department on a tight budget and can’t afford regular payments to rent software.
Lastly, we started our video dept on premiere cs4, then moved to fcp 6, then resolve, and now fcp x. i can access any of those project files as i still have all the software on various machines.
having the choice to change is removed by adobes subscription system as i’d have to keep paying to access old projects.
I get it from a small developers angle, but from a small unit like ours, adobe’s CC is never going to be viable.
cheers
Phil
I had real hassles in altering an Adobe subscription plan. At the end of the first year, I chose to change from a full subscription to the Photographers bundle (Photoshop and Lightroom). I could only make the change – supposedly – with an online “chat”, which became chats. In my 2 online sessions (which ultimately did not bring about the change of subscriptions) most of my time was spent waiting to get responses back; the person was clearly handling many others simultaneously. The result was that my old plan was canceled but the new one was not started (the assistant assured me it had been activated). It was an Adobe we-don’t-give-a-damn-about-customers experience.