Like it or not, Adobe dragged consumers into the era of subscription-based software. And from the looks of it, it’s paying off.
Last Thursday, Adobe revealed, for the ninth quarter in a row, that the San Jose, California-based company beat out analysts’ expectations, more than doubling its net profit year over year, from $88 million to $222 million.
Fueling this increase in profits were 833,000 new Creative Cloud subscribers gained in the fourth quarter of this fiscal year alone – almost 155,000 more subscribers than expected, and roughly 65,000 each week.
Of all Creative Cloud subscribers, Adobe says 52% are paying for their complete plan, which comes in at $50 without an educational discount. The rest are buying up smaller plans or individual licenses, with Lightroom CC being the fastest growing.
Naturally, investors were impressed with the numbers, causing Adobe’s stock to jump to the highest price ever – just shy of $94 as of publishing this.
One way of looking at this news is to say the Adobe is pulling more money than ever from the pockets of the creative community, a fear many had when Adobe shied away from their traditional full-installation purchases.
But, when you look at the numbers, that doesn’t appear to be the case. According to ProDesignTools, Adobe has surpassed 6.1 million paid subscribers for its Creative Cloud lineup, almost half of the 12.8 million customers it had using older Creative Suite programs (which took ten years to amass, as opposed to the three and a half years its taken Creative Cloud).
The reasons for this are multi-faceted, but the biggest one that comes to mind is that the barrier to entry is lower now than ever before. No longer does a photographer, musician or cinematographer have to shell out $700 for a program upfront.
As succinctly summarized by Adobe Chief Financial Officer Mark Garrett in speaking to Reuters, ‘[Creative Cloud] is growing the most because it’s attracting new users […] hobbyists and consumers and people that would never buy the Creative products before, so it’s expanded our market opportunity.’
What are your thoughts on the numbers? Is Adobe taking more money out of your pockets? Or is the subscription-based solution attracting more users than before?