Adobe’s move to the Cloud causes concern at papers

Jun 28, 2013

ARLINGTON, VA—New cost pressure on smaller newspapers showed up from a surprising quarter last month: it came from the software company that has led the industry into the great graphics that are the hallmark of many community newspapers.

Adobe Systems Inc. announced that it is phasing out Creative Suite 6 and pushing its customers into monthly membership fees for Creative Cloud—if they want to continue using Adobe’s key products: InDesign, Illustrator and PhotoShop.

The change is designed to help Adobe solve a historic revenue problem: its income soars just after the release of a new version and then falls rapidly after the early adopters have made their purchases. The long-term, reliable customers who find what they need in older versions of the software present an unpredictable revenue model.

Newspapers currently using CS3 or above would pay $29.95 per month during the first year and teams would pay $39.99 per seat. The pricing is apparently designed to be roughly the equivalent of the single purchase cost for companies accustomed to regular upgrades.

But for smaller newspapers on CS2, 3 or even 5.5 that have not upgraded to CS6, the cost could hit the bottom line hard. Upgrades involve higher software prices and may also mean expensive new computers with faster operating systems. Though the company intends to continue offering CS6 for an undefined period, it will be sold only through online downloads. Public statements indicate it will support CS6 only to correct bugs and maintain compatibility with operating systems.

Nothing stops a newspaper from continuing to use older software until it breaks down. Once the upgrade is required, the Creative Cloud membership will be the next move.

National Newspaper Association President Merle Baranczyk said the news arrived in the industry just in time for NNA’s board of directors meeting in Estes Park, CO.

“We were grappling with likely postal rate increases, public notice challenges and the usual fare. Then Andrew Johnson, one of our newest directors from Mayville, WI, laid the Adobe requirements on the table. It was like unleashing a new wildfire on our board table,” said Baranczyk, who has been covering Colorado’s recent fires from his home in Salida, CO. “We realized NNA needed to educate itself quickly on this change and what it meant.”

NNA also has written to Shantanu Narayen, Adobe chief executive officer, to express NNA’s dismay at the new pricing policy.

“The disruption to community newspapers and the towns they serve from the new Creative Cloud plans will be substantial if Adobe does not provide alternatives that help smaller customers survive,” NNA said in its letter. Narayen was asked to extend the start-up period for Creative Cloud initiation and to consider a more favorable price for newspaper customers using older versions of the Creative Suite software.

“There is a lesson within our industry that has long guided our own sustainability. The newspaper that depends upon its large advertisers and neglects the small ones, and the town that depends on its large industries and abandons the small ones are enterprises designing their own demise. We want Adobe to take this lesson to heart as well,” NNA told Narayen.

Baranczyk said NNA would explore the options for community newspapers.

NNA members are invited to post their comments and experiences for others in the industry.