Earlier this year, Adobe upset the photography community with changes in their terms of use. “The language suggests that by signing up, users could unwittingly allow their work, including Non-Disclosure Agreements, to be used in training Adobe’s AI without consent or compensation,” is what we wrote in a previous article. As a result, many photographers have left Adobe’s services. Adobe later clarified that they’re not using assets to replace photographers — but instead they want to help them through generative AI. Besides Adobe Stock being used to feed their FireFly AI, one of the biggest issues to come out of this addresses cancellation fees and an FTC lawsuit.
The Phoblographer was contacted by Adobe for our previous coverage; and so we asked for statements and clarifications on what’s been going on.
According to an Adobe rep close to the lawsuit who did not want to be quoted directly, the early termination fees were always there for customers who paid the annual monthly plan. This plan is an agreement for a year where photographers pay monthly fees. If the customer breaks the contract, they’re charged 50% of the remaining cost. These charges aren’t made to people who had normal monthly plans. In fact, the Adobe rep claims that they’ve been in place for years following the transition to the subscription model.
“Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget. Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process. We will refute the FTC’s claims in court.”
Adobe
To provide even more clarification, this affected customers globally. People who canceled their plans could be entitled to $500 or more, according to Lantern. In fact, the company has purchased ads on social media to help get the word out even more.
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What’s even more fascinating, though, is another quote that our Adobe rep cited:
The early termination fee noted is not a material part of our business, only accounting for less than half a percent of our revenue. Despite it not being a material part of our business, we believe this plan and approach is the best way to offer a significant discount to our customers at the point of purchase in exchange for their one-year commitment to our product.
To put this into perspective, Adobe’s subscription model hit an all-time revenue high of $5.31 billion last year, a sharp 10% increase from 2022. If we calculate 0.5 percent of that amount, we get $26,550,000. However, Adobe said that they got less than that — which hasn’t been totally confirmed yet by our research. To put this into perspective, we’re citing a 2023 article from Photo Rumors listing the worth of the 16 largest photography companies. Hasselblad’s 2021 revenue listing was for $38.6 million. To that end, Adobe’s assumed revenue from the cancelation fees could be almost the entire worth of what Hasselblad was a few years ago. Beyond that, Adobe brought in more money than Canon Inc. did.
Indeed, Adobe’s monopoly concerns have been very real. For most consumers, they’re the only option to get their work done. Granted, large photo studios tend to go for Capture One instead of Lightroom — then finish the photos up in Photoshop. We’ve been told by schools, large photo studios, and Capture One that they’re actively trying to teach the software to new students so that they’re better prepared when they get into the workforce.
We doubt that this will change things very much, but it’s also very hard to see how things might change at all. Adobe is to creative tools what Google is to search.