Adobe explains why their pricing is different in various countries

Further to my blog posts about Adobe’s pricing for their products in various markets around the world (see https://cybertext.wordpress.com/2012/01/20/adobe-pricing-sucks/ and https://cybertext.wordpress.com/2008/07/12/how-do-they-get-away-with-it/, and some recent Twitter activity on this issue, I was contacted by someone from Adobe for my email address. She sent me this response (below); after you’ve read it, I offer my own opinion on many of her points. Bottom line: It’s all BS!

The following points may help explain why there are price differences across different regions:

We establish our prices for Creative Suite products in U.S. dollars, Euros, Yen, British Pound and Australian dollars on a regional basis using a consistent methodology. Local market conditions significantly influence our pricing – these include the costs of doing business in different regions and customer research that assesses the value of the product in the local market.

We conduct the majority of our business through our retail and licensing channels. We depend on our retail partners in local markets to help us reach as many customers as possible, support those customers, and much more. Resellers are free to decide at which price they sell Adobe products. Adobe decides the price at which it sells its product on the Adobe Store.

The cost of doing business in the rest of the world is higher than in North America. That higher cost is reflected in some of our pricing and would remain no matter how customers chose to purchase. For example, customers will still read about our products through local press to whom we reach out; they will meet local Adobe sales people who conduct seminars, participate in user groups, and visit large customers; and they will rely on support resources that Adobe makes available in these markets. All of these efforts impact the business costs of securing the sale, whether that sale is delivered online or in a box.

I’ve now had three explanations for the price differences from three different Adobe people — one was ‘different taxes’, the other at the WritersUA conference last week was ‘localization costs’ (for which there’s NO justification for such unfair price differences for an English language product being sold into an English language market!), and now it’s this ‘cost of business’ argument.

I’ll address her points as I see them and as a customer who feels they are being ripped off by Adobe:

We establish our prices … on a regional basis using a consistent methodology.

But she doesn’t explain what this ‘consistent methodology’ is, nor why it results in such inequitable pricing. Surely a consistent methodology should result in consistent pricing.

Local market conditions significantly influence our pricing – these include the costs of doing business in different regions and customer research that assesses the value of the product in the local market.

Last I saw, the Australian and US dollars were on about par, unlike just a few years ago when the Aussie dollar was running at less than 50c in the US dollar. What does ‘local market conditions’ actually mean? And if local market conditions ‘influence our pricing’, that’s almost counter to her argument of a ‘consistent methodology’ used in ‘establishing our pricing’. But the best has to be that their ‘customer research assesses the value of the product in the local market’! What the…? They obviously don’t read the Australian computing magazines that slam companies like Adobe for their inequitable pricing, nor do they take notice of politicians asking for parliamentary inquiries into inequitable IT pricing and calling out companies like Adobe for their unfair pricing. As an Adobe customer of many years, I’ve NEVER been asked by Adobe for my opinion on anything, let alone ‘the value of the product in the local market’.

We conduct the majority of our business through our retail and licensing channels.

Really? I would’ve thought they’d have got a lot of business from their own website too. As far as local channels are concerned, if you look up the Australian White Pages, there’s only ONE listing for Adobe in the entire country (22+ million people!), and I bet it’s not a retail outlet. It’s in Sydney, about a 4-hour flight from where I live so it’s pretty useless for me to do business with them. While this center may deal with Australian retailers and licensing issues, I suspect that an ordinary customer who wanted to buy a single copy of one of their products would be sent on their way or referred to the Adobe website or a retailer; I suspect that this single office in Sydney deals only with the large corporate clients.

We depend on our retail partners in local markets to help us reach as many customers as possible, support those customers, and much more.

That’s a joke, right? If they’re referring to retail outlets like OfficeWorks, Harvey Norman, Harris Technology, Dick Smith, etc. and the online software stores in Australia, there’s NO support whatsoever, and it’s almost impossible to buy an upgrade from them to an Adobe product you already own. Sure, you can buy a shiny new one, but when you want an upgrade, you are forced to pay the inflated price, forced to go to the Adobe website (for an equally inflated price), or to a US retailer like Amazon thus sending the Australian dollars overseas. And ‘reach as many customers as possible’? How? Checking these retail outlets for software and upgrade pricing is like pulling teeth — many of them seem to be avoiding selling software altogether, unless it’s the lucrative volume licensing model. You typically can’t buy specialist software in a bricks and mortar retailer like those listed above — you have to buy it online. And don’t ask in store for help (at least in Western Australia) — most of the staff at those retailers haven’t got a CLUE about the products they sell, let alone about specialist software.

Resellers are free to decide at which price they sell Adobe products. Adobe decides the price at which it sells its product on the Adobe Store.

But aren’t there laws about that? I was under the impression that a ‘recommended retail price’ in Australia couldn’t be exceeded, but could be discounted. According to this statement, retailers can set whatever price they like, despite what Adobe says the price is or sells the product for. That means that a retailer in Australia is under no obligation to sell the product at the price Adobe has on their own store. Which means that there should be competition in the marketplace where we see retailers undercutting Adobe’s own highly inflated prices — I’d like to see that! Assuming I could buy an upgrade from a retail outlet, my guess is that it would cost at least as much as Adobe sell it for from their Australian online store, or be comparable. I suspect Adobe pressures retailers into selling at a price that’s comparable to their own highly inflated price.

The cost of doing business in the rest of the world is higher than in North America.

Really??? This is like saying that North American wages are cheaper than anywhere else in the world, that the North American cost of living is cheaper than anywhere else, etc. I’ve just come back from the US, and while they’ve collectively suffered with the global financial crisis more than most Australians have, I doubt that the cost of living or the cost of doing business is much different — at least not substantially different. Not 80+% different, which is the price differential for the products I analyzed back in 2008 and in January 2012. The ‘cost of doing business’ would include things like rents, wages, taxes etc. But Adobe only has one location in Australia, so I suspect it doesn’t employ many people here, and the retail outlets sell all sorts of products, not just Adobe ones, so I can’t see how the ‘cost of business is higher elsewhere’ holds up to scrutiny.

That higher cost is reflected in some of our pricing and would remain no matter how customers chose to purchase.

So if an Australian chooses to buy from Adobe or Amazon direct and not via an Australian retail outlet, we are somehow penalized for the ‘higher cost’ or doing business in Australia even though we’ve purchased from a US location (for example)? I just don’t understand her argument here.

For example, customers will still read about our products through local press to whom we reach out; they will meet local Adobe sales people who conduct seminars, participate in user groups, and visit large customers; and they will rely on support resources that Adobe makes available in these markets. All of these efforts impact the business costs of securing the sale, whether that sale is delivered online or in a box.

Now that’s just plain BS!!!

• Meet local Adobe sales people? Ha! Not in Australia you won’t, unless perhaps you live in Sydney and pop into the office address they have listed in the White Pages.
• Conduct seminars? Where? Not in Western Australia they don’t, or if they do, I haven’t been notified of them.
• Participate in user groups? Nope. I’ve been on the Adobe forums and user groups, and they are populated in the main with people who are in terrible trouble with their software pleading for help and those very kind souls who give freely of their time to help them out. Rarely is an official Adobe employee to be seen on these forums. Besides, even if they did participate, it wouldn’t be the ‘local’ (Australian) Adobe employees — it would be those based in North America or India, most likely.
• Visit large customers? Possibly, if you’re large enough. Is ‘large’ taken on number of employees, dollar value of potential or actual sales from that customer, annual turnover of the business?
• Support resources that Adobe makes available in these market? That’s the biggest BS of all! I’ve had to deal with Adobe phone support a few times and I can tell you that I didn’t deal with a local (Australian) person or even someone based in North America. While the support person was able to answer my questions and help me out in each case, they weren’t based in my country at all. And yes, I asked them where they lived.

Finally:

All of these efforts impact the business costs of securing the sale, whether that sale is delivered online or in a box.

Securing the sale? I don’t need my sale secured! I know what I want and I’m prepared to buy it, but I’m not going to pay overly inflated prices for something I can get for much less if I lived in the US or had a US credit card. I don’t want a box and fancy packaging. It’s software for goodness sake — I just want to be able to download it and start using it… but at a FAIR price.

Sorry Adobe. Your European representative who sent me this email is trying to use a heap of jargon and wishy washy statements, put together with marketing spin, to justify why there’s such a price differential. And I don’t believe a word of it.

Update 13 February 2013: ‘Adobe cuts Australian prices after inquiry summons’ (http://www.afr.com/p/technology/adobe_cuts_australian_prices_after_BgBXyFaCrXRGNIrS1M2fNN). Ah, the headline that promised so much but delivered so little. Adobe is cutting its subscription pricing for ONE product suite for Australians. Not its boxed products, nor its download products, nor ALL its inflated prices for its other products. And it took a summons from the Australian federal government to do that, though I’m sure it will deny that was the impetus for the change of heart.

And another news report chimes in stating that it’s cheaper to fly to the US to buy some Adobe products than buy them in Australia! http://www.news.com.au/technology/biztech/it-is-cheaper-to-fly-to-us-than-buy-adobe-software-in-australia/story-fn5lic6c-1226576920561

Update 22 March 2013: Adobe, Apple and Microsoft to explain to parliamentary committee why they charge Australians more (good infographic of geoblocking too!): http://www.news.com.au/technology/biztech/watchdog-choice-has-tough-questions-for-apple-microsoft-and-adobe/story-fn5lic6c-1226602766888

Does Adobe think we’re stupid with this response to the parliamentary committee, quoted from that page: ‘Adobe defended charging Australians more than $1000 extra for its publishing software by claiming that Australians were receiving a “personalised” service on its local website.’

GIVE. ME. A. BREAK.

Adobe pricing sucks

Back in 2008 I had a little rant about Adobe’s pricing model for countries outside the US, specifically Australia. Since then I’ve spoken to several Adobe employees at conferences in the US about this, but have received no satisfactory answer as to why there is such a discrepancy between the prices I see on the US website and the prices Adobe insists I pay because I live in Australia. Those employees were as baffled as me, and I got feedback that the pricing in other countries, such as the UK, was just as confusing when compared to the US pricing.

So why bring this up again? Because someone from Adobe called me the other day and offered to look into the pricing situation. She called me back yesterday and said that the reason she was given for the price discrepancies was ‘taxes’. Well, to put not too fine a point on it, that’s just bullsh*t.

Here’s why: Australia has the GST, which is a flat 10% tax on ALL goods and services. If you buy something from a store here, there are no state taxes, county taxes, city taxes, other sales taxes and levies like in the US. In Australia you pay the ticketed price on the item, which invariably includes the GST (e.g. a $99 item is actually $90 retail price + $9 GST). That’s it. Very simple.

The GST applies to most goods and services purchased within Australia, including software. It applies to goods purchased from outside Australia if the cost of the item exceeds $1000, otherwise the item is GST-free.

So with that information, let’s look at how Adobe prices its software in Australia and the US. I’ve used Adobe Captivate 5.5 and the eLearning Suite in my examples, both the upgrade prices and the full price (for Captivate 5.5 only), and have used www.xe.com for converting the prices from Australian dollars (AU$) to US dollars (US$) and vice versa. All price conversions were done on the same day within about an hour, so currency fluctuations aren’t an issue.

Summary

For ease of comparison, I’ve converted all Australian dollar prices to US dollars — see below for screen shots of conversion values.

Product	Adobe US store	Adobe AU store	Price difference
Captivate 5.5 Upgrade	$149	$265	$116 (~80%) more in Aust
Captivate 5.5 New	$799	$1389	$590 (~75%) more in Aust
eLearning Suite Upgrade	$399	$695	$296 (~75%) more in Aust

Bottom line: Adobe charges its Australian customers nearly double the price it charges for its US customers. A 10% tax is neither here nor there with that sort of price gouging, which is why I said that the explanation of ‘taxes’ was bullsh*t. Besides, the Australian prices I found on the Adobe store already INCLUDE the 10% GST, so those 75–80% increases are on top of the tax.

Buying from the US Adobe store is NOT an option — while I can provide a US address as I have family there, I need a US credit card too. So I either don’t buy upgrades regularly (thus doing Adobe out of a revenue stream), or I find other ways to buy the product without going through Adobe at all (still doing Adobe out of a revenue stream!).

Would anyone from Adobe like to explain why we get screwed on the prices we pay for a DOWNLOADABLE product, which most likely comes from US servers no matter where we live and pay for it?

And I’d be happy for those from other countries outside the US to comment on the prices they pay (converted to US dollars for a fair comparison).

Screen shots

US prices: $149 to upgrade to Captivate 5.5 from Captivate 5 (which I have) and $399 to upgrade to the eLearning Suite.

Those US upgrade prices in Australian currency:

Australian prices: $255 for the Captivate upgrade, $669 for the eLearning Suite upgrade

Those upgrade prices in US currency:

To buy Captivate 5.5 without an upgrade (i.e. new), the prices are US$799 in the US and AU$1337 in Australia:

Update 13 February 2013: According to one news report, it’s cheaper to fly to the US to buy some Adobe products than buy them in Australia! http://www.news.com.au/technology/biztech/it-is-cheaper-to-fly-to-us-than-buy-adobe-software-in-australia/story-fn5lic6c-1226576920561

Wow! An Adobe upgrade that worked

With much trepidation (my experiences with Adobe upgrades have not typically been without enormous amounts of time and a lot of pain!), I decided to upgrade from Adobe Captivate 3 to Captivate 5 last week.

It was simple as installing the CD/DVD, running the setup program, entering my serial number, entering my Adobe.com details, and it was done!

The next step was to see if my Captivate 3 projects would open and save without error — and they all have so far (I believe there are issues for those using ActionScript, but as I don’t use it, that wasn’t an issue for me).

I even downloaded and installed — without error — the updates released since Captivate 5 was released.

Well done, Adobe. That was a lot less painful than any other Adobe installation/upgrade experience I’ve had in the past few years.

Adobe Captivate: Reduce bloated file sizes

I’m close to upgrading from Adobe Captivate 3 to Captivate 5 (and all going well, I should have done so by the time this blog post is published), but prior to doing so I wanted to complete several movies for my client, just in case anything went pear-shaped…

I was horrified to find that my template was some 38 MB in size. There are only three slides in it, and only one of those has an image (which is about 1 MB). The other two slides are a title slide (text box) and a ‘finish’ slide (text box plus two buttons — one for replaying the movie and the other to return to the menu). Why on earth it was 38 MB was beyond me.

As a result, each time I created a new movie based on this bloated template, it started at 38 MB and increased in size from there. And if I imported any slides and objects from another Captivate project file, the file bloat just got worse and worse.

It was time to do something about it — I wanted the upgrade to Captivate 5 to be as smooth as possible, and that meant lean Captivate 3 project files!

Off to the internet where I found some excellent advice from Captivate guru, Kevin Siegel (he’s documented several methods for reducing Captivate file sizes here: http://iconlogic.blogs.com/weblog/2008/10/adobe-captivate-3-tactics-for-reducing-the-size-of-your-project.html).

I tried all his suggestions that were applicable to me (I’m not doing any e-learning/quiz stuff), but the file size reduction was minimal at best. Then I read one of the comments from a Tim Lucas — and found my solution!

1. Create a new project.
2. Copy the slides from the existing project. DO NOT import them into the new project.
3. Paste the slides from the existing project into the new project.
4. Save the new project.
5. Check the file size — you should notice a dramatic reduction.

Here’s an example of the file sizes — those file names starting with z_ are the old, bloated project files:

So I now have file sizes from 664 KB to 3290 KB, whereas before doing that copying process my Captivate project file sizes ranged from 14300 KB to 97908 KB — that’s what I call a dramatic reduction. Thanks Kevin and Tim.

Of course, WHY the files bloat like this is something I hope Adobe has addressed in the couple of years since they released Captivate 3. I’ll keep an eye on the file sizes to see what happens after I start using Captivate 5. I hope they’ve fixed it.

Adobe Technical Communications Suite group

Art Campbell, on the STC Lone Writers SIG, has created a Google Group for users of Adobe’s Technical Communications Suite. Here’s what he had to say:

Over the past few months, I’ve noticed an increasing number of emails on the FrameMaker lists that have to do with inter-program problems between members of Adobe’s Technical Communications Suite, such as Frame and RoboHelp, Frame and Acrobat, how to integrate Captivate movies and so on.

And Adobe decided not to set up user-to-user forums for TCS but route queries into its program-specific forums, so there isn’t a place on the Internet for users of the TCS.

So, http://groups.google.com/group/TCS-Users is now online. The idea is to concentrate on integration problems and Suite integration tools, but I’m sure that individual problems will also crop up. In any case, drop on by and sign up — you can be a charter member! And there’s still time to earn the honor of being the first person to make an actual posting.

For the geekily inclined, chartering as a Google Group means that a Google account is required to use the web interface. It also means that the archive problem experienced by many email lists is non-existent. And there’s also a file area available for member use, which can be useful to explain *exactly* what you mean.

Adobe is seriously testing my patience

So, I finally relent and purchase Captivate 3. I wait a couple of weeks to simmer down after my previous recent stressful experiences with Adobe software before installing it on my new laptop (do a search on this blog for “adobe” if you want to read about my previous experiences). Today’s the day!

I read the ‘readme’ file to make sure I follow everything exactly. I close all applications. I insert the DVD. I install Captivate 3 with no errors. I activate the product successfully. I register the product successfully. It opens. All is right with my world so far, and I’m thinking the first kind thoughts about Adobe that I’ve had in a couple of months.

So being the masochist that I am, I figure that maybe there’s been an update to the version I’m on. I go to Help > Updates and see that there is. I download the update and install it using the big Download and Install Updates button. The progress bar indicates that something is happening. And then I get this error message telling me that I must have Captivate 3 installed! Well, d’uh—I just installed it!

Tell me which version I'm on??

I select the Cancel this update and quit option, then click OK. Guess what the next message is? This one…

Well, no it hasn't - I'm still on 3.0.0.850

So I go to the Adobe Forums and Knowledgebase looking for anyone else who may have encountered this issue. The only information I find is a suggestion to uninstall and reinstall. And I also find the link to the Downloads page. My next step before uninstalling and reinstalling (grrrr!) is to download the update and install it manually, not using the automatic updater from within Captivate.

Downloading and installing the update myself worked. Thank goodness. The update takes me from 3.0.0.850 to 3.0.1.589, and is available for download from here:
http://www.adobe.com/support/captivate/downloads.html

But despite it working, it was another hour out of my life testing, hunting down solutions on forums, then downloading and installing stuff that I shouldn’t have had to do if the darned thing worked right the first time! I’m still not happy with Adobe. Products should not be released when such fundamental functionality doesn’t work.