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Adobe Revenue Forecast Misses, Shares Slip

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Jimmy Holcomb
Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 12:03:22 am

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

Photoshop maker Adobe Systems forecast disappointing revenue for this quarter and reported lower quarterly sales at its digital media business, which includes the Creative Cloud software suite.


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Ricardo Marty
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 12:11:48 am

how long can wall street prop up this company before the investors dump it.
now they are making at least 8 times less than before the cloud.

ricardo marty


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Brian Charles
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 12:24:44 am
Last Edited By Brian Charles on Sep 17, 2014 at 12:30:42 am

While the stock may have missed its target, the sky is not falling for Adobe.

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

Besides they now have Aindreas' subscription to put them over the top.



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Rainer Schubert
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 1:34:37 am

Net Income halved compared to (already low) Q3/2013.
Stock down nearby 5% after sales.
And still 35% (!!!!) of revenue based on a more than 2 Years old perpetual software, which might not be supported by new OS!
Only a Plus of roundabout 252thd Full-Product Subscribers last quarter.
(Q2/2014 67% Full CC Subscribers of 2308thd in Total compared to 64% of 2810thd in Q3/2014)
A CEOs declaration on future growth initiatives:
"First, we are aggressively converting the large installed base of CS customers to Creative Cloud...". (Aindreas... Did they harm you? hihihi)
Why aggressively - if this glorious cloud is such a big deal?
Is an aggressively converted customer a satisfied customer?
Shouldn´t they give us what we want instead of pushing us into renting models we don´t like (OK - not all of us).

I also wonder, how long they are able to sell this as great success.
When is the Subscriber-Base big enough, that they can raise prices up to a level, that will bring their income near to that, they had in times they sold fair, perpetual software.


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Chris Pettit
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 3:10:29 am

[Rainer Schubert] "Why aggressively - if this glorious cloud is such a big deal?
Is an aggressively converted customer a satisfied customer?"


[Rainer Schubert] ""First, we are aggressively converting the large installed base of CS customers to Creative Cloud..."."

Maybe he's referring to how unbelievably hard it is to actually CANCEL a subscription? But don't take my word for it, drop in to any Adobe CC social media or forum anytime for stories of that delight...


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Michael Hoefler
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 7:33:12 pm

Chris, actually it is now very easy. I just canceled one of our three subscriptions and it's just a click within your account settings. Doesn't take more than 10sec.
Finally!

Michael


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Chris Pettit
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 8:13:41 pm

That seems anecdotal. I've read dozens of posts of people being run through the ringer to cancel.


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Tim Wilson
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 8:33:31 pm

[Chris Pettit] "I've read dozens of posts of people being run through the ringer to cancel.
"


Those are anecdotes too. :-)

Maybe I'm misreading, but I think Michael was saying that it used to be hard, and now it's not. Do I understand that correctly?


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Chris Pettit
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 9:05:03 pm

[Tim Wilson] "Those are anecdotes too. :-)

Maybe I'm misreading, but I think Michael was saying that it used to be hard, and now it's not. Do I understand that correctly?"


The complaints are numerous and recent. Relative to the millions of users does it establish that it's more likely to happen than not? Certainly not, but it's far too common a complaint to be a fluke.

And it doesn't stop there. Many people have complained about calling to cancel, and being repeatedly badgered into not canceling, repeated questions as to why they are cancelling and getting the speech about the great CC value etc. When some guy in India is doing that, my guess is it's policy.


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Michael Hoefler
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 20, 2014 at 1:26:31 pm

@ Chris

Well, English is not my native language and maybe that's why my post about canceling was not clear.

But I will say it again: Just three weeks ago I canceled an account within 1 min, without calling or chatting with an Adobe rep. It was difficult before but now it is very easy.

Michael


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Chris Pettit
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 21, 2014 at 12:49:37 am

[Michael Hoefler] "Well, English is not my native language and maybe that's why my post about canceling was not clear.

But I will say it again: Just three weeks ago I canceled an account within 1 min, without calling or chatting with an Adobe rep. It was difficult before but now it is very easy."


Hi Michael, I didn't mean to be dismissive of your particular experience, I'm sure it went well for you, as well as others. My only point was that there have been so many complaints about this issue that it's hard to believe that it doesn't in any way relate to the comments from Adobe management regarding "aggressively converting the large installed base of CS customers to Creative Cloud."


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Chris Pettit
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 1:45:37 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."

Good luck with that Adobe. With the "take it or leave it" attitude and treatment of small business and free lance customer so far in this "discussion" about subscriptions, that's all I can say, good luck.


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Ricardo Marty
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 2:52:32 am

they can have all the content creators on planet earth but doesnt make mone the cloud will disapate and if they increase the price the will loose many subscribers plus add the churn. the cloud. doesnt look like a winner.

ricardo marty

just when things where getting bad aindreas hops on, could this be a omen?


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 17, 2014 at 6:10:38 pm
Last Edited By David Mathis on Sep 17, 2014 at 6:12:15 pm

Resistance is not futile, I will not be assimilated!


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Dave LaRonde
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 5:20:03 pm

Like you, I'm holding out for a viable replacement to Adobe software.

The workarounds that have been previously discussed in this forum are mere Band-Aids -- no, strike that, they're from Delusional Dreamland -- when considering the entire Adobe Software Package.

Dave LaRonde
Promotion Producer
KGAN (CBS) & KFXA (Fox) Cedar Rapids, IA


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 6:06:47 pm

[Dave LaRonde] "Like you, I'm holding out for a viable replacement to Adobe software."

In the even that BMD Resolve becomes a full-featured NLE with its color grading pedigree and Fusion becomes tightly integrated this could be a solution that I am looking for. Less round tripping and less time having to switch between applications. The only real thing holding me back for going straight Resolve is the choppy playback, in particular when it comes to audio.

[Dave LaRonde] "The workarounds that have been previously discussed in this forum are mere Band-Aids -- no, strike that, they're from Delusional Dreamland -- when considering the entire Adobe Software Package."

I am going to respectfully disagree, somewhat, with you here. True, there is no "Send To Motion" in Final Cut Pro X and there is no way of importing a Motion project into FCP X which is a bummer. Here is where I disagree. Motion does allow for the ability to save custom titles, generators, transitions and effects for use in FCP X. This is a huge bonus for me.

The second area of disagreement is that not everyone needs an entire suite of products. For some Motion and FCP X is a very viable replacement. I have found Pixelmator as a nice "alternative" and considering adding Acorn in the mix.

Finally, the workflow between Resolve and FCP X is almost painless as long as you are aware of a few things. The latest update to Resolve (still in beta at the time of this post) has added in a few nice features.

I like very much my "suite" of products. The entire package that Adobe does offer is a benefit but not everyone needs the entire suite.

I do not consider, for a moment, that the workflow between Resolve, FCP X and Motion as a band aid approach, just my opinion. Yes, stuff from Adobe is more powerful and flexible but I don't want or need the entire suite, at least not for now. My two cents.


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Dave LaRonde
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 6:14:06 pm
Last Edited By Dave LaRonde on Sep 18, 2014 at 6:17:05 pm

All True.

However, many folks also like to use Photoshop / Illustrator / Audition as they edit. None of them are shabby pieces of software. Perhaps they even use C4D, which integrates with After Effects.

If someone comes up with as-good-as-or-better replacements, with the same degree of integration, I for one declare that someone the winner.

Dave LaRonde
Promotion Producer
KGAN (CBS) & KFXA (Fox) Cedar Rapids, IA


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 18, 2014 at 6:39:42 pm

[Dave LaRonde] "All True.

However, many folks also like to use Photoshop / Illustrator / Audition as they edit. None of them are shabby pieces of software. Perhaps they even use C4D, which integrates with After Effects.

If someone comes up with as-good-as-or-better replacements, with the same degree of integration, I for one declare that someone the winner."


Agreed. Hope that I was not defensive in my previous post as that was never my intention. My main reason for avoiding the Adobe subscription model is primarily cost for the moment as I do this for a hobby and some freelance work on the side.

I really do appreciate Adobe for adding to the subscription model many useful new features and services. If they were to have a subscription model compared to what Avid offers, I would be more inclined to join then. The lack of a clear exit strategy is another "concern" , if you will, that I have with any subscription only model, not just from Adobe.

I have considered perhaps subscribing just to Photoshop as the other tools I have serve my needs at the current time. I hope this help explain things and my current situation. You do raise some very valid points and always appreciate to hear what others have to say. I do appreciate your posts.


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Dave LaRonde
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 12:12:22 am

No offense perceived and none taken.

Dave LaRonde
Promotion Producer
KGAN (CBS) & KFXA (Fox) Cedar Rapids, IA


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Andrew Kimery
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 12:22:12 am

Am I reading it right that the forecast was for $1.02 billion in revenue and Adobe only had $1.01 billion in revenue?

I'm just taking a shot in the dark but, assuming no drastic drop in stock price, I think Adobe is going to stay the course until 2016. If subscription numbers and revenue doesn't go up enough by then then I think Adobe will start to slowly sweeten the pot. Loyalty buyout option maybe?


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 2:54:19 am

I think they will probably offer some type of discount to gain a large subscriber base. Not sure if they will offer a buyout option similar to what Avid offers. I just don't see it happening anytime soon. Have yet to see any indication in a change in course.


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Rainer Schubert
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 10:20:49 am

Not quite sure if they have success with their business model over the long term...
Revenue is only a part of the math.
What about Net income? And amount of subscribers (only 64% of them use the full cloud subscription - 1,8 mill.)?
Very interesting analysis of Adobes financial/stock situation:
seekingalpha: this-clouds-silver-lining-isnt-worth-the-risk
They did a lot to get the enterprises on that pink cloud. Never ending discounts and so on. But it seems the individual users base is more resistant.
Let´s wait, what Mr Shantanu Narayen means with "First, we are aggressively converting the large installed base of CS customers to Creative Cloud."
Incompatible files? Higher discounts? Unsupported future OS?
I also don´t believe, they will offer something like a serious buy out. That would be counterproductive to the "customer binding strategy".
I think, it´s their target, that you can´t change software easily (without loosing full access to your work if you don´t pay any longer).
They know, that their software is very mature and real new features are hard to bring in.
(Where are the new big features beside the Video-Tools?)
So they have to find ways like this "cloud" because customers won´t pay lots of money for small advantages.
But: The newer Adobe-surveys don´t longer interrupt immediately if you tell them you are not interested in this so called "cloud". Seems they have to listen a bit now.
I also think, they will not succeed, if they don´t find a serious modification to this CC.
May be, (not sleeping) competition will take over too much of former customer base, if they don´t... The good and the evil


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Ricardo Marty
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 12:42:25 pm

the revenue might be big but its the income that counts and of this moment its 46% lower than last year. why? the expense of servicing the client will continue to grow, marketing and promotion to add and keep clients, ever increasing technical infrastrucure, loss of sellable products, and the rising competition if you add a downturn in the economy it all adds up to heavy headwinds. adobe has has painted itself against the wall.

ricardo marty


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 19, 2014 at 2:40:22 pm

On the flip side of the coin there are those that will go with the old school license and stick with it for years to come. I think that would cut into both income and revenue over the long term. I think that Avid has a much better approach. Will be interesting to see what market share Blackmagic Design will have when Fusion is added to the product line.

In one sense, Adobe had to make a business decision that they did, though I disagree with the approach they took. Not saying is right or wrong, just how the ball bounces.


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Ricardo Marty
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 20, 2014 at 3:42:12 am
Last Edited By Ricardo Marty on Sep 20, 2014 at 3:43:19 am

this 4th quarter should be interesting. adobe cc cannot afford another fall. i am sure that they will offer something to increase the sales of its products. i doubt they will keep offering specials. maybe break down cc into groups like it was with cs at a better price or offer a new version of cs6.

ricardo marty


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David Mathis
Re: Adobe Revenue Forecast Misses, Shares Slip
on Sep 20, 2014 at 4:17:37 pm

I would most very likely join if the two following things were to happen:

1. Offer something similar to what Avid has.
2. Have different packages available. Example: One would be for photographers and another for post-production, that would be one possible solution. All of this with what was mentioned in the first point.

This way people can have the old school license if they choose to go that way, pay a much smaller amount for any update or new version each and have access to their files and projects .

Look forward to thoughts that anyone else has.


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