Adobe drops software sales in favor of subscriptions

Earlier today, Adobe announced a major change in strategic direction. Its Creative Suites, which bundle software such as Photoshop, Dreamweaver, Illustrator, Premiere Pro and After Effects into multiple packages for applications such as video post-production and web design, will be discontinued as of June, when the company introduces the next version of its Creative Cloud service. CS6, the current version of Adobe's Creative Suite, will remain on the market in both physical and downloadable versions, but will not be updated. In addition, individual applications will only be available in physical and downloadable versions in their CS6 form. As of June, the only way to get the latest version of Adobe's software will be to subscribe to either the complete Creative Cloud or to individual applications.

As with the current version of Creative Cloud, the new version will be priced at $49.99/month, and individual applications will be priced at $19.99/month. Existing Adobe customers who own either a complete copy of Creative Suite 3 or greater, or one of the applications in Creative Suite 3 or greater, can take advantage of three different pricing models:

• They can license individual applications for $9.99/month.
• If they own CS6, they can license the complete Creative Cloud collection for $19.99/month.
• If they own CS3, CS4, CS5 or CS5.5, they can license the complete Creative Cloud collection for $29.99/month.

After the first year, the price of individual applications will increase to $19.99/month, and the price of Creative Cloud will increase to $49.99/month.

Customers who use most of Adobe's applications, such as those in the former Production and Master Creative Suite collections, will end up saving money with Creative Cloud versus buying annual updates. On the other hand, customers who use fewer applications, such as those in the Design and Web Creative Suite collections, and customers who've typically skipped versions of Creative Suite in the past, will end up paying more on an annual basis for Creative Cloud subscriptions.

As it stands today, Creative Cloud is a good deal for many Adobe customers, but what we don't know are Adobe's future pricing plans. What's $49.99/month this year could be considerably more in a few years. My sense is that there's going to be a lot of resistance to the end of Adobe's Creative Suites and individual purchase options, and a fair number of creative professionals will begin evaluating open source and lower-cost replacements for Adobe's software.

Flash Player 10.2: A big improvement?

Like many users, my experience with Adobe's Flash Player hasn't been a happy one, and it's gotten worse as Adobe has "improved" the player over time. Video playback using the Flash Player in both Firefox and Internet Explorer has gotten so bad for me on Windows that I've switched to Google Chrome for viewing Flash video. Adobe has apparently been paying attention to the criticism, and the beta of Flash Player 10.2 November 30th that the company released on its Adobe Labs website is the first version in a long time with significantly better video performance for virtually all users, not just those with dedicated H.264 acceleration.

Flash Player 10.2 is the first public implementation of Adobe's Stage Video architecture, which makes better use of whatever video acceleration (usually in the GPU) is available in the user's computer. Adobe claims that Stage Video decreases CPU usage by up to 85%. As a practical matter, Flash videos are playing cleanly, without stuttering or dropouts, on Windows using Flash Player 10.2 in both Firefox and IE. Windows 7/IE 9 users will also benefit from graphic acceleration using any available hardware rendering capabilities. If you're using Flash Player 10.1 or earlier and you don't need to continue using it for development purposes, I strongly recommend uninstalling 10.1 and replacing it with 10.2.

Adobe Audition for the Mac: A change of heart

Last June, Adobe announced that it would begin beta testing a Mac version of its Audition digital audio workstation software late this year. I've used Audition on Windows since the late 1990s, when it was called Cool Edit Pro and was published by a company called Syntrillium. Audition became a favored audio editing tool for radio broadcasters and podcasters, but Adobe hasn't updated the software since 2007. I wondered why Adobe was bothering to release a Mac version of an application that had been bypassed by Avid's Pro Tools, Apple's Logic, and many other DAWs.

A few weeks ago, Adobe released the first beta version of Audition for the Mac, and even in beta, it's an excellent piece of software. It follows the user interface design of Audition 3.0 for Windows fairly closely, but takes advantage of OSX's multitouch capabilities. Many of the effects have been improved--for example, the noise reduction processor is both easier to use and much more effective than its Windows predecessor.

So, I take back the snarky remarks I made about Adobe porting obsolete software to the Mac. However, it doesn't change the fact that the Windows version is still three years old, hasn't had even a minor point update since early 2008, and desperately needs an upgrade.

Working on "The Feldman File" video podcast

After writing about video and new media for five years, I think that it's time to launch a video podcast. One of my objectives is to keep costs down as much as possible. Last weekend, I shot a test episode, where I learned a few things:

• I suck as a host. Okay, let me rephrase that: I need to work on my on-camera presentation skills.
• Audio recorded on a consumer camcorder quickly goes out-of-sync with audio recorded with an external recorder. I'm now experimenting with a variety of ways of bringing the audio back into sync with picture (using the audio recorded from the camcorder as a scratch track for identifying sync points.) Update, October 26th: Singular Software's DualEyes looks like the synchronization solution I'm looking for. It's a standalone application that can synchronize the audio track from a camcorder or DSLR with externally-recorded audio. It can correct for drift (the problem I'm dealing with) as well as align tracks in time. DualEyes currently only works on Windows, but a Mac version is in the works. At $149 (on special for $119 until October 30th) it's the most cost-effective solution I can find, and it requires minimum effort.
• I'm trying to do everything with Apple's iLife '11, which may or may not work, and avoid having to buy Final Cut Studio or Adobe's CS5 Master Collection. Either one will cost me at least $1,000, even with upgrade pricing from Adobe.
• You can get a ton of light out of inexpensive fluorescent fixtures. I considered LED lights, but their light falls off quickly, and even the least expensive "no-name" light panels are around $300 each. Instead, I bought a pair of Flashpoint Cool Light 4s from Adorama with four 45 watt compact fluorescent bulbs and stands for under $200.00. Each fixture throws the equivalent of 900 watts of light at 5500K. They remain cool, require no special power or separate circuit, and replacement bulbs cost all of $6.99 each.
• I'm using a Sanyo Xacti GC-102 camcorder and an Olympus LS-10 audio recorder that I've owned for some time. The Sanyo is priced comparably to Flip and Kodak models, but it has a flip-out LCD that lets me see myself while I'm shooting to insure that I'm framed and in focus. There's a fair amount of low-light noise with the Xacti, so I need to wear lighter colors without patterns to cut down on noise.

My video and audio editing skills are a bit rusty, and I'm on a learning curve with the iLife applications. There are no third-party books yet available, and Apple's online help leaves a lot to be desired. So, I'm taking my time. My hope is to shoot a usable episode this weekend and release it next Monday. I'll post new episodes here, on YouTube and iTunes. In the interim, if there's anything that you'd like to see in the podcasts, please email me at len (at) feldmanfile.com.

RIM tosses its hat into the tablet market with the PlayBook

At the BlackBerry Developer Conference in San Francisco, RIM announced and demonstrated its new tablet, the PlayBook. Based on the QNX operating system that RIM recently acquired and a new Software Development Kit called WebWorks, the PlayBook will compete directly with the iPad, but no prices or availability date (other than early 2011) were announced.

The PlayBook will have a 7" 1024 x 600 display with capacitive touch-sensing, a dual-core 1GHz ARM Cortex A9-based processor, 1GB of RAM and dual cameras (3 megapixels front-facing with videoconferencing support, and 5 megapixels on the back of the tablet.) The company didn't state the amount of flash memory that will be available, but prototypes shown at the conference were marked "16GB" and "32GB".

RIM claims that the PlayBook will support OpenGL graphics, POSIX and HTML5, as well as Flash Player 10.1 and Adobe AIR applications. Engadget says that the user interface looks a bit like "a mashup of HP/Palm's WebOS and BlackBerry OS." They also got a chance to see the tablet in action (albeit in a static demonstration behind thick panes of plexiglas.)

The question for RIM is what the tablet market is going to look like in early 2011, and how well the PlayBook will slot into the market at that time. Android 3.0 (Gingerbread) should be released in early 2011 and will unleash the flood of cheap Android tablets that we've been waiting for all year. January is a big month for Apple announcements, and we're likely to see the next-generation iPad, almost certainly with cameras, at that time. From what was said today, the PlayBook is not so much forward-looking as it is a response to things that the current iPad can't do. It would be nice to see RIM advance the state of the art, but unless there's a lot to the PlayBook or WebWorks that hasn't been seen yet, today's announcement wasn't encouraging.

Adobe: Who's in charge here?

Sorry for making this "dump on Adobe" day, but the news that the company is porting its "zombie" audio editing application Audition, which was long ago given up for dead by most users, to Mac OSX has got me scratching my head. On Wednesday, Adobe announced much stronger revenues--up 34% from the year before, primarily from the launch of Creative Suite 5--but earnings were flat, leading investors to be concerned about future prospects for the company.

Microsoft probably has twice as many products as Adobe, but it has almost 20 times the revenues. Microsoft's profit margin is more than twice as high as Adobe's, 29.03% vs. 11.84%. (Statistics courtesy of finance.yahoo.com.) And yet, Microsoft and Steve Ballmer are coming under almost constant attack for poor management. It's true that Microsoft is milking Windows and Office, and that accounts for a good deal of its superior profit margins, but one has to look at Adobe's management as part of the problem.

There are over 90 products listed on Adobe's Product web page, and only six of them are suites (five of which are variations of Creative Suite 5.) The rest are individual software products, components, development tools, servers, and "toy apps" like Adobe Kuler. Adobe's Labs website lists 30 technologies under development, some of which are new versions or features for existing products, and some of which are entirely new products or experiments. That's a lot of products for a company with $3 billion in revenues.

Adobe could probably prune and consolidate its products, lowering the number of products offered by at least a third, while having little or no impact on revenues. The company would likely increase its profitability and dramatically improve management's ability to focus. It could start by creating two piles--one for the products in Creative Suite 5 and one for everything else, and do a bottom-up review of every product in the "everything else" pile. Then, it could look at the CS5 components themselves and determine which products can be consolidated and which add little or no value to CS5 and can be sold off or discontinued.

Right now, Adobe is like the cowboy who gets on his horse and rides off in all directions. Its inability to release a viable mobile version of Flash after years of trying, its bungling of Acrobat tools that cost the company some of its biggest eBook customers including Amazon, and now, the decision to port Audition, an all-but-dead audio editing product, to OSX, all demonstrate that there are serious problems with Adobe's management that one good quarter of CS5 sales aren't going to fix.

Google I/O Day 1: Perhaps more excitement in tomorrow's keynote

Anyone who was looking for earth-shaking news from today's keynote presentation at Google's I/O Conference didn't find it. The biggest news had already leaked weeks ago--Google's decision to open-source the VP8 video codec from On2 Technologies. Under the name "The WebM Project", Google will make VP8 available royalty-free and open-source, and will pair it with the Ogg Vorbis audio codec, which has been added to the project by Xiph.org, to create WebM. YouTube has begun to make WebM versions of some of its videos available for testing, and WebM will become a standard format supported by YouTube.

Google, Mozilla and Opera will add support for WebM to their browsers (currently in nightly developer Chromium and Firefox builds, and in a Lab build of Opera). Adobe also announced its intention to add WebM support to Flash within the next year. More than 20 other software, hardware and services companies also announced their plans to support WebM. Not surprisingly, neither Apple nor Microsoft announced support for WebM.

There were a lot of demonstrations of applications built on HTML5, and Adobe demonstrated some ways to use the current Dreamweaver CS5 and CSS to build platform-aware HTML5 content. The company also demonstrated an early prototype of software that can create interactive graphic HTML5 content. Google announced that Google Wave is now open for general use as a Google Labs project (no invitation needed). The company also announced a web app store for Chrome; support for the store will be first available in developer builds of Chrome to be released later this year. Applications available in the store will run in other HTML5-compliant browsers.

Finally, Google spent the last 40 minutes of the keynote discussing and demonstrating application development tools and platforms. The announcements including the Google App Engine for Business, which is not yet available, and significant extensions to Google App Engine itself to make it more competitive with Amazon Web Services.

It's now expected that tomorrow's keynote will focus on Android, Flash and Google's TV initiative with Intel, Sony and Logitech.

HTML5: The "Not Quite There" Valley

The battle between Apple and Adobe over Flash, which has been joined to a lesser extent by Microsoft and Opera, is almost certainly going to end with HTML5 as the dominant way of delivering video and interactive content on the web, with Flash becoming the RealMedia of a new generation. It'll be used by a few people, especially in legacy applications, but will fall out of mainstream use. However, that's not where we are now.

Today, Flash is still very much a mainstream technology, HTML5-compliant browsers implement different portions of the standard, and HTML5 itself continues to evolve. There are no graphic authoring tools capable of creating anything coming close to Flash-based interactive content in HTML5. Yesterday, Scribd announced that it's starting to shift from Flash to HTML5 for its online document sharing platform, after a six-month development effort. Moving from Flash to HTML5 for video is now fairly easy, but for interactive content, a major development effort is usually required.

So we're still far away from the time that HTML5 will be ready to take over for all of Flash's applications, and the decision tree is now very clear: If you need to access Flash content or applications, forget about using any device that runs on the iPhone operating system. Once Adobe releases Flash 10.1 for Android, that won't be such a big obstacle. If you're developing applications that need to live for more than a year or two, however, you should seriously consider wading into the HTML5 pond now to avoid having to rebuild all your code for HTML5 later on.

Is Microsoft working on HTML5 design tools?

A few weeks ago, I wrote a post asking where the tools are that will allow mere mortals to write HTML5 that works like Adobe's Flash. Adobe has Dreamweaver, but it has a strong incentive to keep developers and users from migrating from Flash to HTML5. Microsoft has the Expression suite, but it also has Silverlight, so I thought that it wouldn't take up the challenge, either.

Yesterday, however, a Microsoft executive went on the record stating, and I quote, "The future of the Web is HTML5." That quote came from Dean Hachamovitch, Microsoft's General Manager for Internet Explorer, and although he was writing about web video, his comments can easily be seen as extending beyond just video.

It would make a lot of sense for Microsoft to go "all out" for HTML5 support, not just in IE but in its Expression Studio authoring tools as well. Silverlight has miniscule market share compared to Flash, so Microsoft could cannibalize Silverlight without hurting its revenues. Further, by making Expression Web a better HTML5 graphical development tool than Dreamweaver, it could steal market share from both Dreamweaver and Flash.

Adobe is vulnerable, and no one smells blood in the water better than Microsoft. Expression Studio 4 could be Microsoft's opportunity to leapfrog at least some components in Adobe's Creative Suite 5. Microsoft can offer Silverlight for those developers who want it, and to provide capabilities that won't be implemented in HTML5 for some time, but it doesn't need to protect Silverlight the same way that Adobe needs to protect Flash.

Steve Jobs goes on the record about Flash

Apple's position on Adobe's Flash is well-known, from the company's new iPhone Developer Agreement, Steve Jobs' remarks at an Apple "Town Hall" meeting, and a series of emails between an iPhone developer and Jobs. However, Jobs has now gone "on the record" with an open letter explaining Apple's decisions.

I've linked to the open letter so you can read it yourself, but here are the key arguments:

1. Despite Adobe's claims of openness, Flash is a proprietary platform and format controlled by Adobe. Apple's approach is to use HTML5, CSS and JavaScript, all of which are open industry standards controlled by standards committees.
   
2. Adobe claims that 75% of the video on the Web is in Flash format, but an increasing number of sites (including YouTube) also supply video in H.264 format that iPhone OS-compatible devices can use, so the problem is getting smaller every day. Jobs admits that Flash games won't run on iPhone OS, but there are over 50,000 games and entertainment titles already available for the iPhone, so the lack of Flash hasn't caused a problem.
   
3. Flash is the number one reason that Macs crash, and Symantec has reported that Flash had one of the worst security records in 2009. Flash doesn't perform well on mobile devices, and Adobe has been promising to deliver a full version of Flash for mobile devices for almost two years and still hasn't shipped. Apple doesn't want to subject iPhone OS users to these problems.
   
4. Most Flash video uses a Sorenson or On2 codec that requires software decompression, while H.264 can use hardware decompression. In Apple's tests, videos that can use H.264 hardware decompression play for 10 hours on an iPhone before the battery runs out, while viewing videos that require software decompression cuts battery life in half.
   
5. Flash was designed for keyboard and mouse interfaces, not touch, and the iPhone, iPod touch and iPad rely on touch.
   
6. Cross-platform development tools like Flash can't take advantage of new features as quickly as Apple rolls them out, so Flash developers can only use these features after Adobe supports them. Also, cross-platform tools encourage development of  "lowest common denominator" applications.

You may disagree with some of Jobs' arguments, but his open letter is the most comprehensive and clearest presentation I've seen of why Apple has decided not to support Flash.

A summary of beliefs (weekend edition)

John Battelle and Tim O'Reilly published an open letter to Apple this morning, chastising the company for its policies of limiting press contact to a few carefully-chosen editors, writers and analysts, dropping out of industry conferences, and discouraging company employees from blogging. Their letter got me thinking about some of the things that I believe:

• Battelle's and O'Reilly's open letter is both self-serving and hypocritical. As I noted on Battelle's blog, Microsoft did even worse things than Apple for years, and neither writer complained about it. Microsoft had a "scorched earth" policy with writers, editors and industry analysts who wrote negatively about the company or gave its products bad reviews. They and their publications weren't invited to Microsoft's press events, weren't allowed to interview Microsoft's employees, and didn't get access to beta software in order to write reviews or books. Losing access to Microsoft was equivalent to a death sentence for people covering the PC business. Microsoft's behavior was legendary within press circles, but became widely known only after the US and EU pursued antitrust charges against the company.
  
  I would give Battelle's and O'Reilly letter more respect if it had stuck to trying to get Apple to open up, but it led into a pitch for a forthcoming conference. Are they interested in getting Apple to open up in the public's interest, or in selling more tickets for their conference?
  
  Update: Fake Steve Jobs replies with an open letter of his own.
  
  
• I disagree with Apple's decision to ban cross-compilers and intermediate development platforms for the iPhone OS, but Apple has the right to do so unless it does something illegal. At least on the surface, I see no evidence of illegal behavior and no grounds for antitrust action.
  
  
• I believe that Apple's application review process is broken, as the Mark Fiore situation once again demonstrated. Apple should be reviewing apps to insure that they work and don't introduce security problems into the iPhone OS environment. It should be enforcing its UI guidelines in order to provide a consistent user experience. It shouldn't be involving itself in the content of apps, unless that content has been stolen from someone else or is pornographic in nature (it fails the "no socially redeeming value" test.)  In general, Apple should support free speech, and its policy should be to approve apps unless there's something technically wrong with them.
  
  
• Adobe should focus on making Flash run as well as possible on non-iPhone OS platforms to help make those platforms viable competitors to Apple. HP and Adobe keep waving their hands and talking about how great the new HP tablet will be; Dell keeps leaking out photos of its 5" tablet, and now 7" and 10" pictures have surfaced. Adobe keeps talking about how it will have Flash 10 running on a flock of smartphones. How about a lot less talk and a lot more shipping?

Adobe's CS5 Launch: They didn't remove the iPhone reference

Adobe launched Creative Suite 5 this morning, and they left in the reference to their Flash-to-iPhone cross-compiler in their presentation on Flash, even stating that applications built with it would be accepted in the iTunes App Store. As you probably know, as of last week, Apple won't accept cross-compiled applications into the App Store. Adobe should have pulled the reference from their announcement, but they prerecorded the presentations some time ago and would have had to reshoot or re-edit the Flash segment over the weekend, and chose not to do so. In any event, there was no "miracle" agreement between Apple and Adobe over the weekend, and applications built using the Flash cross-compiler won't be accepted by Apple.

As for the announcement itself, it went much faster and was much smoother than the CS4 launch presentation. The downside is that the presenters were required to talk at high speed in order to present the new features of their products in the limited time available. It also seems to me (although I could be wrong) that the CS5 bundles are significantly more expensive than the CS4 or previous versions, both in full and upgrade pricing. CS4 wasn't a wildly successful upgrade to CS3, and we're still feeling the effects of the recession. CS5 adoption may be a lot slower than Adobe would like.

Where are the HTML5 design tools?

It should be really, really clear by now that Apple wants to, in the words of Raid, "Kill Flash Dead!". Yesterday, Apple introduced new terms to its developers program agreement for iPhone OS that prohibit use of any programming languages other than Objective-C, C, C++ or JavaScript, and any intermediate or multi-platform development tools. That includes the new Flash-to-iPhone OS cross-compiler that Adobe plans to include in Creative Suite 5, which will be launched worldwide this coming Monday.

Obviously, this puts Flash developers in a (slightly) deeper fix than they were before the iPhone 4.0 announcement, but to me, it raises a more interesting issue: Where are the graphical HTML5 development tools? You can use any text editor to code HTML5, and Adobe's Dreamweaver will do a fine job, but how do you create the sophisticated interactive applications that we've come to expect from Flash? It's extremely unlikely that Adobe is going to extend Dreamweaver to compete with Flash, and Microsoft's web development tools are focused on Silverlight for video and interactivity, not HTML5.

Where are the HTML5 graphical application tools going to come from? At this point, I don't know. There's a real market opportunity there. The first company with a HTML5 interactive design tool that feels familiar to Flash developers will hit a gold mine.

Flash: It ain't dead yet

Tonight, TiVo announced its new Series 4 DVRs, called Premiere and Premiere XL, which will ship next month. Engadget covered the announcement in New York, so I'll skip the product details. However, one of the most intriguing aspects of the announcement is that the Premiere's user interface is built on Flash, and its performance looked quite smooth. While Apple and Adobe are throwing spitballs at each other over Flash on the iPad, TiVo has just moved Flash front-and-center into the living room. It remains to be seen whether the Premiere will halt TiVo's slide in the DVR business, but at least it indicates that the company isn't giving up on the hardware business.

Something's coming from Adobe and Google

I'll be following two big announcements tomorrow. First, Adobe will launch Creative Suite 4 at events around the world. In this column, I normally write about Flash Video, but the applications in Creative Suite, including Photoshop, Dreamweaver and Acrobat, are Adobe's true bread and butter. I've been using betas of Dreamweaver and Fireworks CS4 for some time; both products, which came from Macromedia in the Adobe-Macromedia merger, now look and feel more like Adobe applications. Whether that's better or worse depends on whether you prefer the old or new user interfaces. To my eye, the functionality of the CS4 applications has been modestly upgraded, at best. We'll know more tomorrow.

(Update 10:14 p.m. Pacific Time, September 22, 2008) Adobe has posted details of the new CS4 bundles on its website, prior to the announcement events tomorrow. As with CS3, there are seven bundles: Standard and Premium versions of the Web, Design and (Video) Production bundles, plus a Master Collection that includes everything. There are no bargains, either: Unless you were one of the few people who purchased 3.3 versions of the bundles, upgrades start at $499 for the Standard bundle versions, $599 for the Premium versions, and $899 for the Master Collection. If you're starting from scratch, the Standard bundles are $1,399, the Premium bundles are $1,699, and the Master Collection is $2,499. (All prices are in US dollars).

Image via CrunchBase
The bigger announcement, at least in terms of press interest, will be the T-Mobile/Google annoumcement of the first Android phone, the HTC Dream, and of the imminent completion of T-Mobile's 3G mobile service rollout throughout the U.S. Android phones will compete with iPhones and Windows Mobile-based smartphones at the top of the mobile phone food chain, and the Dream is rumored to sell for the same $199 price (on a two-year plan) as the base 3G iPhone. The Dream will have a slide-out QWERTY keyboard, which promises to make it easier to use for power emailers than the iPhone (yet most likely still at a disadvantage vis-a-vis the BlackBerry.) All of the applications in Google's Android store will be free, at least initially, and anyone can post applications (the countdown to the first Android malware has already begun.)

I've been playing with the Android development system on my PC for some time, but I'm reserving judgment on how the Dream performs until I get a chance to try it. I used to be a T-Mobile customer, and if the Dream lives up to the hype, I may well switch back. Again, more tomorrow.