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Adobe eliminating retailers from supply chain

If ever there was a textbook example of a monopolist perverting the free market, it’s the recent behaviour of Adobe.

CEO Shantanu ('It's the Creative Cloud, stupid') Narayen is leading Adobe away from retailers and hopefully towards oblivion. Companies like this give capitalism a bad name.
CEO Shantanu (‘It’s the Creative Cloud, stupid’) Narayen is leading Adobe away from retailers and hopefully towards oblivion. Companies like this give capitalism a bad name.

Latest tactic to further increase shareholder value at the expense of other stakeholders – customers, (former) retail partners – is the plan to phase out the sale of the Adobe Creative Suite (and Acrobat) supplied on discs in boxes accompanied by printed manuals. The product will only be available as a digital download, either purchased outright or via monthly subscription.

As reported in US consumer technology website The Verge, an Adobe spokesperson said: ‘As Adobe continues to focus on delivering world-class innovation through Creative Cloud and digital fulfillment, we will be phasing out shrink-wrapped, boxed versions of Creative Suite and Acrobat products.

‘Electronic downloads for Creative Suite and Acrobat products will continue to be available – as they are today – from both, as well as reseller and retail partners. We are in the process of notifying our channel partners and customers as plans solidify in each region.’

– Adobe resisted the temptation to justify the move as being in response to consumer demand. Clearly there are limits to its mendacity.

As bricks and mortar retailers rarely if ever sell digital downloads, this appears to be the beginning of the end of Adobe’s relationship with the traditional retail channel in delivering its software to customers.

In bad company

This could be a blessing in disguise, as Adobe’s shameless price gouging of its Australian customers – which has attracted attention from a Federal Senate enquiry – tars retailers with the same brush. Adobe charges Australians just under double the already high-margin US price for many of its image editing products.

The fact that Adobe, along with Microsoft and Apple, refused an invitation to front the Australian Government Senate enquiry and had to be summonsed (only the third time this has been required in Australian history, according to parliamentarian, Ed Husic) underscores their imperious arrogance and absence of any notion of corporate citizenship. Adobe also distinguishes itself by a lack of engagement in Australian society, and a mean-spirited approach to corporate giving.

Here’s the now-infamous clip of the Adobe’s top man avoiding answering questions as to why the company he leads treats its Australian customers with such contempt, compounding the offence as he does so.

The next step from Adobe will be to force customers onto a subscription-based monthly payment model – not because that’s what customers want, but to increase revenue and smooth cashflow.

Just as a rat can’t be blamed for behaving like a rat, a monopolist like Adobe can’t be blamed for behaving like an arrogant bully.

But there must surely now be an opportunity for competitors like Corel and Nik to work with retailers in providing consumers with some choice.
– Keith Shipton


  1. Chris H Chris H March 21, 2013

    The thing that most monopolists haven’t figured out is that if you make a product too expensive customers will find they don’t need really need it & a competitor will move in with a much cheaper product.

    When is Gillard going to show some balls & start protecting Australian industry…..

  2. Evan Kourambas Evan Kourambas March 21, 2013

    Interesting yet inevitable outcome. You did not address the obvious question, that being “what value did the retailers add”. This is a product sold to professionals who know better than any shop assistant what it can do. Hopefully Adobe implement a unified global pricing policy next…………we can only hope.

    • Keith Shipton Keith Shipton Post author | March 21, 2013

      Good point, Evan. I guess at the very least retailers provided a destination to go to where you could find shrink-wrapped product for sale. So the value of convenience. I can’t believe that customers don’t actually prefer the physical product with a published manual. But if you are Adobe you don’t need to respond to customer preferences. You don’t even have to respond to the government of the country in which you do business.

      • Geoff Hopkinson Geoff Hopkinson March 21, 2013

        Retail boxed versions of Adobe Creative Suite products and individual programs such as Photoshop and Lightroom do not ship with printed manuals. I cannot recall anything more than quick start sheets from any version from CS forward. Currently CS6 of course. That is usual policy for Microsoft and other distributors as well and has been for years. Point version free updates for programs such as Lightroom for example actually comprise a full (download only) new copy of the entire program. Over a product lifecycle of perhaps two years it is completely replaced perhaps 5 or 6 times. What is actually sold of course is a licence to use the software and the delivery media is in theory incidental. A software licence can be purchased to activate a downloaded free trial version and the disc set could be then optionally shipped for an additional small fee at least in USA as I recall.
        What is really unsupportable is how different price points in different markets can be justified for identical downloads.

  3. labguylarry labguylarry March 21, 2013

    Years ago, I was so impressed by the Adobe product that I bought some shares for my self-directed retirement account. With Adobe’s new policies and after watching the “now-infamous clip” I was was so bothered by Adobe’s business practices, really offended, that I sold my shares. From a self-interest stand point, I suppose it is good for shareholders if Adobe can squeeze every last penny out of their customers. But, as others mention, they can go too far and drive customers to consider alternatives. It is very much like hated monopolies here in the USA – phone providers, cable TV, etc.- as soon as viable alternatives appears customers will desert in droves.In our little shop we run two full Creatives Suite seats and three free-standing Photoshop seats. I am sure Adobe was not happy with folks like us who staggered the upgrades so that a couple of seats were on the current product and the others were one version behind. They can force us to update all of them each year or force us into a subscription – a subscription that they could raise the price on at any time- or they just might force us into freezing our situation as is and not buy ANY upgrades going forward. And don’t even get me started on how they have treat you folks Downunder – very, very wrong.

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