Adobe Creative Cloud Cost Analysis / Review

Adobe announced that they will no longer be selling individual licenses of programs like Photoshop CS6 and Premiere Pro, instead you can either license them individually at a cost of $19.99 per month or you can license the entire Creative Cloud Suite for $49.99 per month.  Adobe Lightroom, which is very popular with photographers, will still be sold as an individual package for a $79 upgrade fee.  If you go with entire Creative Cloud Suite, Lightroom is included, but if you go for the $19.99 per month Photoshop single application option you still have to buy Lightroom upgrades.  

I did a five year cost analysis for those photographers that use Adobe Photoshop CS6 and Lightroom only (which I believe covers most photographers).  Adobe has historically released a new version of Photoshop about every 18 months at a cost of around $179.  So you are paying approximately $10 per month for Photoshop assuming you upgrade when a new version comes out.  

The old method of purchasing Photoshop would cost $600 over five years, and the new Creative Cloud pricing cost doubles that at $1,200 over five years.  This assumes that most Photographers already have a sunk cost of purchasing the software (Adobe is giving you a $10/month reduction for the first year .... bid deal?).

If you go with the entire Creative Cloud suite your cost will be $3,000 over five years.  That does include Lightroom so that would save you around $300 over that five year period.  So you will be shelling out an additional $2,100 over five years for the Photoshop/Lightroom combination.  If you need and want access to the other products in the suite this might be a good deal, but if you don't, well it is just good news for Adobe. 

The other thing that concerns me is that Adobe has no incentive to improve their software.  Before they had to give you features and functionality to justify the price of the upgrade, but that is no longer an issue because you are stuck paying the same monthly fee regardless of any new features.  

You could just stick with Photoshop CS6, but they are going to get you because the Adobe Camera Raw engine, that is the heart of Lightroom, will not be upgraded unless you go with the Creative Cloud.  So you camera raw engine in Lightroom and Photoshop will be different and you loose a lot of the synergies that you get from keeping them in sync.  

Overall, this is a big money grab by Adobe.  It first started last year when they no longer allowed you to skip an upgrade for Photoshop.  I skipped CS5 and went from CS4 to CS6 because I didn't see anything in CS5 that I really needed and save myself $179.  Can't do that anymore.  Of course it doesn't matter anymore because you have to go with the Creative Cloud.  

The old pricing model didn't provide Adobe with enough steady and growing revenue.  Wall Street likes companies with steady (annuity) and growing revenue streams, they will give them a higher PE ratio than companies that need to sell new innovation via one time license fees every few quarters to keep the revenue coming.  This was a business decision pure and simple ... there is nothing here for the customers, but a lot for the stockholders.  I would feel better about it if they would just say it and not try to make it like they are doing something for the customers, we aren't a bunch of idiots.

Judging from the VERY NEGATIVE reaction that Adobe is getting on the forums, I wonder if this will backfire and hit their revenue hard and therefore their stock price.  Time will tell if photographers will just bitch about it for a few months and then capitulate in six to twelve months and pay Adobe their monthly fee.