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Adobe Revenue Forecast Misses, Shares Slip

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Marcus Moore
Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 2:01:45 am

Just to make sure we're an equal opportunity (theoretically) bad news service

http://recode.net/2014/09/16/adobe-revenue-forecast-misses-shares-slip/

Most interesting point is not the stock price or anything, but the new number for subscribers-


"The number of paid subscribers for Creative Cloud — including Photoshop, Illustrator and InDesign software — rose by 502,000 to 2.81 million."


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Ricardo Marty
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 3:05:54 am

they can have a gazillion subscribers but if it doesnt make money the cloud withers.

ricardo marty

i hope its the beggining of the end for the cc only product.


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Craig Alan
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 3:26:47 am

Yes. If it does succeed watch for other app makers to join in. Bad enough with cable.

Mac Pro, macbook pro, Imacs (i7); Canon 5D Mark III/70D, Panasonic AG-HPX170/AG-HPX250P, Canon HV40, Sony Z7U/VX2000/PD170; FCP 6 certified; FCP X write professionally for a variety of media; teach video production in L.A.


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Scott Witthaus
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 10:36:51 am

"He added that Adobe had harvested a lot of the “low-hanging fruit” in shifting its existing customer base to the cloud, but the challenge now was to convince the more “resistant” customers, such as small businesses and individuals."

Here is the challenge. I watched Avid's quarterly report (where they finally reported results over the last two years) and the challenges are the same. The subscription model evens out the revenue flow, but how does it make it grow?

Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter


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Walter Soyka
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 1:08:05 pm

[Scott Witthaus] "Here is the challenge. I watched Avid's quarterly report (where they finally reported results over the last two years) and the challenges are the same. The subscription model evens out the revenue flow, but how does it make it grow?"

How does the perpetually-licensed model make sales grow?

You raise a valid point that the developers will want the growth that can only come from new sales, but this is true under either model.

I think that subscription actually creates opportunity for new offerings and new revenue on the service side -- a way to make and sell more to your existing customers -- though we are not seeing this as of yet.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive [twitter]   |   RenderBreak [blog]   |   Profile [LinkedIn]


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Jeremy Garchow
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 4:21:01 pm

[Walter Soyka] "I think that subscription actually creates opportunity for new offerings and new revenue on the service side -- a way to make and sell more to your existing customers -- though we are not seeing this as of yet."

I agree.

Adobe is making a big move, it's a new model and that takes time. The dust has to settle, Adobe has to see who is staying and who is going, and then service the new Adobe customer with new Adobe services. This would be my plan, too. For a while, you have to give a little away and take a few losses, in order to gain loyal customers, and build a successful product.

Blame Napster?

Jeremy


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Andy Field
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 5:51:21 pm

They Need to come up with a "Cloud Phone"

Andy Field
FieldVision Productions
N. Bethesda, Maryland 20852


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Craig Seeman
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 2:24:10 am

or Adobe Watch.

With their new Health Cloud (Health Anywhere?) it'll monitor the stress level of both the editor and the client. Editors will be privy to the client's stress state to guide her/him in handling the edit session.



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Scott Witthaus
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 9:53:37 am

Avid and Adobe are in an interesting place. There is a balance on how much they can increase the subscription prices. And, without a doubt in my mind, the prices for Avid and Adobe will go up.

If revenue flattens out after all the hard-core users switch over to subscription, how to you start it growing again? Raise prices, or cut expenses. In Avid's case, they are cut to the bone already. So the question for them is, will everyone be willing to pay $350/year for Avid? $400? What is the tipping point of price where people say 'the hell with this' and move to X or R11 or Edius...

Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter


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Walter Soyka
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 10:05:41 am

[Scott Witthaus] "Avid and Adobe are in an interesting place. There is a balance on how much they can increase the subscription prices. And, without a doubt in my mind, the prices for Avid and Adobe will go up. If revenue flattens out after all the hard-core users switch over to subscription, how to you start it growing again? Raise prices, or cut expenses."

Scott, you seem to be setting up a false dichotomy. The imperative to grow beyond your current install base is not unique to subscription offerings; you have exactly the same challenge selling perpetual licenses.

Put another way, if revenue flattens out after you make all the easy perpetual license sales, how do you start it growing again?

I don't think the answer is to assume a zero-sum game and initiate a death spiral by raising prices on your current users -- charging more and more money to fewer and fewer users until you lose critical volume. I think the answer is to attract new users, and to develop and market new offerings to your existing customers, no matter what sales model you use.

Walter Soyka
Designer & Mad Scientist at Keen Live [link]
Motion Graphics, Widescreen Events, Presentation Design, and Consulting
@keenlive [twitter]   |   RenderBreak [blog]   |   Profile [LinkedIn]


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Scott Witthaus
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 1:39:38 pm

[Walter Soyka] "Put another way, if revenue flattens out after you make all the easy perpetual license sales, how do you start it growing again?

I don't think the answer is to assume a zero-sum game and initiate a death spiral by raising prices on your current users -- charging more and more money to fewer and fewer users until you lose critical volume. I think the answer is to attract new users, and to develop and market new offerings to your existing customers, no matter what sales model you use."


I think we are saying the same thing. I think right now, with the FCP7 death well behind us, Avid and Adobe are scrambling for the same users. You are correct, growing the customer base is the main focus, but that will probably come at the expense of the competition. I have no doubt in my mind, however, that subscription users will see a rate increase in 12-24 months. And I think it would be very foolish in a business sense for Adobe or Avid to say that won't happen. MHO, of course!

Scott Witthaus
Senior Editor/Post Production Supervisor
1708 Inc./Editorial
Professor, VCU Brandcenter


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