Adobe Strengthens its Position . . .

By Ron Rovtar
Managing Editor

Rarely do corporate actions so perfectly reflect marketing strategies. But, two of Adobe Systems' recent moves do nothing if they don't advance the company's new "Everything but the Idea" ad campaign.

Unfortunately, these moves also leave a lot of important questions unanswered.

The first move, the creation of the Adobe Stock Photos service, made Adobe an instant player in the stock photography industry.

Then, in a blockbuster move, Adobe announced the purchase of rival Macromedia, potentially solidifing Adobe's position as the world's top graphics industry software provider by adding powerful new graphics tools to the company's already strong software arsenal. The $3.4 billion Macromedia deal, expected to close this fall, is contingent on approval by federal regulators and the shareholders of each company.

These two moves in addition to the company's existing software should literally provide creative professionals all the software and one of the most important services needed for almost any graphics project. Thus, Adobe will provide nearly everything but creative concepts, as promised in the new ads.

The new Adobe Stock Photos was recently announced in conjunction with the release of Adobe Creative Suite 2 (CS2), a collection of several popular graphics programs, including Photoshop, Illustrator, InDesign and GoLive.

The stock service lets CS2 users search for, purchase and download royalty-free stock photography over the internet without leaving the graphics program in which they are working.

Adobe said creative professionals will also be able to "access partner rights-managed libraries and connect with individual assignment photographers via the Adobe Photographers' Directory . . . ." The company offered little information about how rights-managed libraries would be accessed or if buyers could purchase image licenses directly through the Adobe graphics programs.

However, Adobe Stock Photos is steering clear of selling rights-managed because such transactions are more complicated and, thus, harder to automate. It is hard to imagine that other distributors will be able to solve this problem if Adobe Stock Photos has not.

Adobe Stock Photos does not offer its own unique library of images, but is repackaging content from a number of existing suppliers, including Comstock, Photodisc (Getty Images), Jupitermedia, Digital Vision, Amana, Royalty Free by Zefaimages and others. Adobe expects to add additional suppliers in the near future.

Direct access to photos through graphics programs will certainly improve workflow for creative professionals, very much in keeping with the new ad campaign. Now creative pros can even gather content while working in Adobe programs.

But, it also raises important questions.

Will Adobe Stock Photos use its unique position in graphics programs to strong-arm stock sellers into participating on Adobe's terms ( something akin to Microsoft's failed attempt to win the internet browser war by integrating Explorer into the Windows operating system )?

Will Adobe favor the biggest stock suppliers, damaging more marginal firms that could provide fresh approaches? How much revenue will Adobe skim off of each stock license and how will this affect stock pricing -- not to mention revenues for photographers and participating stock sellers?

And, of interest to many photographers, will Adobe Stock Photos directly offer rights-managed stock or will the omission of rights-managed be another damaging blow to an important product by another shortsighted corporation?

Adobe could put to rest many of these concerns by offering software to let other companies and photographers provide images in exactly the same way as the new Adobe stock service. Adobe has indicated no such intention.

However, this would make a lot of sense if Adobe really wants to provide "everything" in its new software packages. In truth, the current option provides only one thing: the ability to buy and download royalty-free images from a single source.

"Everything" would let software users buy and download images from multiple sources, including individual stock suppliers and assignment photographers. And, this would seem to make more sense for Adobe, which knows a lot about software and very little about stock photography.

The acquisition of San Francisco-based Macromedia gets Adobe new tools for mobile devices, the popular Flash animation technology, the Dreamweaver web design program and a number of other software packages that compete directly with Adobe programs. Dreamweaver, for example, competes strongly against Adobe's GoLive.

In addition, Macromedia's Freehand competes with Adobe Illustrator, and Fireworks is a modest competitor for Photoshop, one of Adobe's flagship programs.

Like Adobe Stock Photos, the Macromedia acquisition will help Adobe fulfill the promise of the new ad campaign. But, this move also raises questions about the company's place in the future of the creative industries. It helps fulfill the"everything" promise by letting the company add well-established technologies to future versions of Creative Suite, making CS even more powerful.

But, should the acquisition close, it will put Adobe so far ahead of any competition that the company will have a near stranglehold on this market. In fact, antitrust worries were among the reasons Adobe's stock price dropped nearly 10 percent the day this deal was announced. Investors also were concerned about Adobe's ability to integrate the two companies' cultures and software.

Will the competing Macromedia programs disappear? This would be a real shame, especially in the case of Dreamweaver. Will reduced competition mean higher software prices from Adobe? You can almost bet on it. Few corporations could resist cashing in on a market advantage like this.

So, where does this all leave creative professionals? In the short run, many will be better off, though those favoring Macromedia products may soon need to learn Adobe programs. Still, both the creation of Adobe Stock Photos and the purchase of Macromedia will help Adobe fulfill its promise that creative pros need only supply the concept while Adobe helps them with much of the execution through closely integrated programs and services.

But, in the long run, much will depend on how Adobe answers all these questions. The company's silence is not encouraging

 

Adobe Systems, Inc., can be found at: http://www.adobe.com

Macromedia, Inc, can be found at: http://www.macromedia.com