[shuttertalk]

Adobe has launched a new subscription model for their Creative Suite 5.5 products, allowing for month to month subscriptions or annual subscriptions (at a discount) of their software products. From reading their FAQs, the subscription products and the retail/perpetual off the shelf products are the same functionality-wise - just that instead of putting in a serial number to register the product, you enter a subscription activation key. Once your subscription expires however, the software will deactivate itself after a 5 day grace period. You can re-activate the subscription anytime within six months, otherwise you will need to get a new account and activate the subscription again. While under subscription, you can download and upgrade to new versions as they get released without any extra charges.



Does it make financial sense to use the subscription model?

At today's RRP pricing, Photoshop is $699 for the full version and $199 for the upgrade. Photoshop Extended is $999 for the full version and $349 for the upgrade.
According to Wikipedia - new versions come outroughly every 18 months to 2 years. The gap is becoming less more recently.

So if you bought the full version of Photoshop and upgraded every 18 months, it would set you back $1097 in 3 years time (base + 2 upgrades), and $1296 in 5 years time (base + 3 upgrades). For Photoshop Extended it would be $1697 in 3 years and $2046 in 5 years.

For the subscription model, Photoshop would set you back $420 in 1 year, $1260 in 3 years and $2100 in 5 years using the annual subscription pricing model. For the month to month subscription model you would be paying $588 in 1 year, $1764 in 3 years and $2940 in 5 years. For Photoshop Extended, it works out to be $588 in 1 year, $1764 in 3 years and $2940 in 5 years for the annual model, and $900 in 1 year, $2700 in 3 years and $4500 in 5 years.

For a personal user, I can't see how the cost of the subscription model can be justified - it doesn't make much sense. The month to month pricing is just too much unless you are the type of user that only uses it a few months in a year. The annual pricing is a bit more reasonable, and 1 year of subscription costs less than the full version of the product, but anything after 1 year you start losing money compared to buying the products outright.

The only reason I can see for using this model is that if you are a business and want to amortise your costs on a month by month basis as opposed to a large initial outlay but I think that kind of thinking would be better suited for something like a car or house rather than a software product.


What do you think of this new subscription model, and do you see yourself using it?

[Toad]

Good analysis Jules.

I would never sign up for a subscription model. I only upgrade my PhotoShop every 3 or 4 versions because there just isn't enough delta change from one version to another to rationalize it. My previous version was CS and I upgraded recently to CS5 Extended. With educational discount, I paid about $300 for a new version that will realistically last me for 5 years. What would ever be my incentive to pay over $1800 over 3 years for upgrades that I don't want or need? Most users that are not professional graphic designers probably use less than 20% of PhotoShop. With all the compositing and other sophisticated processing functions that I do, I still probably use only about 40% of the functions.

I can understand why Adobe wants this model, but I suspect that very few non-commercial buyers will go for this. Commercial buyers are usually purchasing at deep discounts with tax breaks for their business expenses. Jules is 100% correct in that it really only makes sense if you are amortizing your business costs over time.

On the flip side, PhotoShop is the tool of choice for professionals, and you have to give Adobe credit for offering business pricing options that were undoubtedly requested by their commercial clients. It may not make sense to dabblers like us, but to a CFO of a company employing dozens of artists (say a video game company), this business model will be applauded.

[shuttertalk]

It may not make sense to dabblers like us, but to a CFO of a company employing dozens of artists (say a video game company), this business model will be applauded.

Good point with regards to a business requiring multiple licenses for a team... I do suppose shelling out a fixed amount each month as opposed to a lump sum amounting to tens of thousands every 18 months is a bit more palatable...

[shuttertalk]

Also I'm sure they would stop this but perhaps you could buy a subscription for a month, then buy a permanent upgrade license and score yourself a copy of photoshop on the cheap.

I did a quick scan through the FAQs and they said that you could convert from a subscription to a permanent license, although I suspect they would probably only let you convert if you bought a full license as opposed to an upgrade license.