The Darker Side of Subscriptions

Posted on April 5, 2016 by Larry

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

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Teijo says:

April 11, 2016 at 5:18 am

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..
phil sheldon says:

April 11, 2016 at 5:26 am

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
Chuck Green says:

April 11, 2016 at 6:02 am

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.
Chris says:

April 11, 2016 at 7:44 am

I can see training and business software as a subscription, but creative software should not be something that has to be paid month to month. I don’t see many hobbyists using CRM software in their spare time…

I have been a CS user since 2.0 and had just upgraded to the Master Suite CS6 when Adobe yanked it all away and told me that I would need to pay them for the rest of my life if I wanted access to my original content.

Luckily I get a steep discount on my personal subscription (very, very steep discount), or I would be FCPX, Motion, Resolve, and Protools (I like dialog editing and cleanup in Audition- Multitrack music and sound design in Protools).

And as an added bonus, the last few updates have been very slim in the bug squashes and new features… When you are selling upgrades, you need to make sure that it is worth it for the end user, when you are getting the money every month anyways, it seems that you are not pushed enough for a better product.
Terry says:

April 11, 2016 at 9:24 am

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.
Allynn says:

April 11, 2016 at 11:33 am

Okay… enough with the subscription bashing. Assuming you pay the full $50 a month (which I admit I don’t because I work for a university).. but assuming you do… if you *only* use Premiere, Photoshop, Audition and Media Encoder you are paying $150 a year for each application. If you use After Effects too it drops to $120 a year per app. If, on the other hand, you’re a hobbyist, you can buy Premiere and Media Encoder for $240 a year. I don’t get it. I know people who spend more than that on crap coffee each month. Is it just the “subscription” issue that bothers you? ‘Cuz I used to spend a *lot* more than that each year keeping my software up to date.
Chris says:

April 11, 2016 at 12:43 pm

I think it’s more because of the fact that if you don’t pay next month, you can’t open your files.
With the licensed versions, you could sit out a cycle or two and be fine. All of your files would still open. Now you HAVE to pay every month or you can’t open anything.
Gabe Strong says:

April 11, 2016 at 4:21 pm

I’m not sure that telling people to ‘stop subscription bashing’ is really going to stop it. There are obviously people who feel strongly about it and have made the decision to stop using the products because of it. Obviously there are also people like you, who think it’s fine. Ok, that’s fair enough. People are different. Just because ‘some people spend more money on crap coffee’ doesn’t mean anything to me. There are plenty of people, who spend their money on all sorts of (what I would consider)…..to be frivolous things. Just because they do it, doesn’t mean much to me. As I’ve said before, I could ‘afford’ to hire an African witch doctor $100 a month to shake a bone rattle over my head to drive away the bad spirits that are preventing my business from growing at the rate it could grow too. That doesn’t mean it’s a good business decision for me. And for me, I make no more money using Adobe tools, than I do using other tools. And yet Adobe tools cost more in a year,, than having a perpetual license to the other tools I use. Plus, I don’t have to worry about future ‘subscription price raises’ or losing access to projects if I don’t keep paying. I understand, there are plenty of people who get educational/cheaper rates. There are others who need Adobe products to work together with ad agencies and production houses. They make money from the client to pay for the cost of the subscription, and they need to have Adobe tools to interface with others who have them. But just for me, it doesn’t make business sense.
Bob Cole says:

April 11, 2016 at 5:35 pm

Re losing material: You can roll back an After Effects project a generation at a time, all the way back to a non-subscription edition. All sorts of caveats apply: new operating systems may not be compatible with older software; plug-ins may not work, etc.

Re Adobe’s draconian annual renewal policy: I was bit by this too. I got auto-renewed, & was too busy at the time to research the terms. Had Adobe been pro-active in making sure I was aware of the financial commitment I was making, and the penalty for withdrawal, I would have opted for a month-to-month membership. It left a bad taste in my mouth. It feels “sneaky.”
Robert says:

April 13, 2016 at 12:30 am

“… 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)