Adobe Systems Inc. (NASDAQ:ADBE) Wants to Provide Opportunities for the Creative

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By Stefan Larson on December 13, 2014 Company

Adobe Systems Inc. (NASDAQ:ADBE) posted their earnings, which turned out to be stronger than expectations of the analysts. The company acquired Fotolia at $800 million, a European photo service. The bigger news is that Adobe Systems Inc. (NASDAQ:ADBE) now has 3.5 million subscribers, who are paying for the Creative Cloud service. The general Manager and Vice President of the company, David Wadhwani, expects Creative Cloud to grow up to 5.9 million by the next year. The company generates 2/3rds of its revenues from recurring fees and subscriptions.

An even bigger news is that Adobe Systems Inc. (NASDAQ:ADBE) holds a unique position in the market; it has a huge customer base with consumers and creators of digital services and goods. The company is able to meet both the supply and demand sides of the customers. The company may be able to build a sharing economy. However, there are hard facts that need to be considered. New markets have been created for the digital distribution of content. This has lead to a decline in the unit price of products, a trend that will surely continue.

Technology has advanced to enhance productivity and provide digital automation. This has reduced the value of labor for most of the companies. It is interesting to see how the companies will pan out in the future. While, on one hand, automation helps to lower costs, on the other hand, it devalues the labor of human labor. Under such a condition, economy is all about increasing the demand for those goods which are becoming more and more inexpensive.

Wadhwani was questioned about the reaction of his photographers at the acquisition of Fotolia. Fotolia is a stock-photo service that offers photos at much cheaper prices. Wadhwani pointed out that leveled pricing helps to close the rift between video editors and designers, and professional photographers who provide world-class services.

Wadhwani also said that the company is interested to help grow the opportunities for the creative people. The concept is to be more lenient towards pricing, which, Adobe Systems Inc. (NASDAQ:ADBE) can easily handle. Among all other things, the photo segment of the company was the most difficult to change to the Creative Cloud service. Most of the photographers generally use Lightroom or Photoshop. But Creative Cloud provides the whole software package, which is more than what most subscribers need. However, subscribers grew this year. The reason is that Adobe Systems Inc. (NASDAQ:ADBE) normalized the prices. The company also added improvements to Photoshop and Lightroom around the same time as Apple Inc. (NASDAQ:AAPL) began working on Aperture, a competitor of Lightroom.

Adobe Systems Inc. (NASDAQ:ADBE) wishes to strike a balance between pricing and opportunities for the creative minds out there. The company has the ability to work on both sides of the equation so that it can achieve more. This concept is worth consideration for the economy connected by the internet. Adobe Systems Inc. (NASDAQ:ADBE) can potentially transform sectors of the economy.