Citing new and widely varying price-point options for its Creative Cloud service, including a recently launched program targeting the K-12 educational market, Adobe said today it will no longer provide quarterly updates on Creative Cloud subscriber growth. Executives said that, because the amount of revenue generated by different categories of subscribers will vary widely, the overall numbers make less sense as a measure of the product's overall success.
"It has been our stated goal to attract tens of millions of customers at widely varying price points," Adobe CFO Mark Garrett said during a conference call with analysts today. "New SKUs such as the recently announced K-through-12 education offering will make Creative Cloud available to millions of students. And, as we said at the analyst meeting, we are also considering a mobile-only offering. All of this further dilutes the relevance of the number of subscribers as a measure of the health of the business."
Instead, Adobe is pointing analysts to its annual recurring revenue (ARR) figures, reported quarterly, as a better metric. (Essentially, ARR expresses how much revenue Adobe expects to generate over the course of a full year based on subscription data from the current quarter. With the number of subscriptions still climbing quickly, ARR is meant to draw a picture of the company's health by looking forward, rather than backward.) That number grew almost 10 percent on a sequential basis, reaching $2.7 million in the first quarter of fiscal 2016, compared to $2.5 million in the previous quarter, for the Creative Cloud portion of Adobe's digital media business.
Still, many observers had been closely watching the subscriber numbers as an indicator of how readily the industry as a whole was adjusting to the new subscription model. The last time Adobe announced hard subscription numbers, last December, it said it had reached 6.17 million as of November 27, 2015.
Revenues from Creative Cloud's subscriber base are expected to be increased by the use of Adobe Stock offerings, and the company noted that more than 100,000 4K video assets have been added to the 1 million HD video assets and 45 million still images already available.
Responding to a question, CEO Shantanu Narayen cited "surveys and anecdotal evidence" that suggested the subscription model is acting to reduce piracy by giving casual pirates a more affordable way to go legit with the software. He noted also that the subscription product has not yet been rolled out in some international markets that experience high levels of piracy, such as China.
