ADOBE IS FACING SOME SERIOUS PROBLEMS
Reading time: 3 min.
Recently $ADBE (+0,42%) has posted his earnings and it was a good quarter.... on the surface.
No, I am not going to talk about the outlook that send the stock down 10%.
I am going to talk about the bad business practices that Adobe has been perpetrating in this months (especially in the USA wich represent 60% of their revenue)
In the USA if you want to unsuscribe to Adobe monthly or annual plan of their products you have to pay a fee up to 50% of the value of your annual/monthly membership. Yes, you read it correctly. A fee to unsuscribe... that's crazy.
This was causing a lot of anger among users and the problem became so big that the FTC (USA Federal Trade Commission) took action against Adobe in order to stop this from happening.
Adobe tryed to defend his methods by saying that less than 1% of the revenue came from the "unsuscribe fee".
So, if less than 1% of revenue is causing all of these negative backlashes why they don't just remove it?
Well, because it is more than 1%.
Many users on Reddit (and on other forums) explained that they preferred keep paying for the 1 year membership rather than unsunscribe because the process was extremely difficult and, at the end, they were also gonna pay a big fee to unsubscribe.
In Europe if you want to stop a subscription service you can simply click on the "Unsuscribe" button or stop paying when you are no more interested in the service.
Many times there is also the possibility to flag if you want to stop the automatic monthly billing.
With Adobe (in the USA) this is not possible.
They removed the possibility to stop the automatic monthly charge and if you want to unsubscribe, especially if you have a business account, you have to call them several times begging to remove the membership.
Many Reddit's users said that they had to call 2-3 times, while others affirmed that it was easier closing their bank account and open a new one in order to stop the automatic monthly billing.
Unfortunately the bad news don't stop here...
With the latest "Terms and conditions agreement", that every user was forced to accept in order to use their products, Adobe had the possibility to view, read and use in any possible way every file on your Pc.
Every..single..file.
Then, they'll use all of these materials to train their generative AI "Firefly".
This caused a lot more anger against Adobe and many users started to upload vicious files to damage "Firefly" learning.
When this news reached the Media and many posts on X reached over 30 milions views Adobe quickly changed their "Terms and conditions agreement" by saying that they will not use any file on customers Pc to train their AI and that Adobe can not see or use any file on a customer's PC.
Why Adobe didn't do that from the beginning?
Why did it take a lot of angry people on X and Reddit to change things?
Why management is so greedy?
They don't even realize that a lot of loyal paying customers are leaving Adobe's products for competitors or pirate versions of the Adobe software.
Adobe had a huge monopoly for years and management think that they can do whatever they want because customers don't have another choice.
Now, however, a lot of new softwares are popping up and Adobe monopoly is in danger.
Yet management is doing everything in his power to make their users angry and frustrated.
They prefer to reach a short-term profit instead of building a long healthy collaboration with their paying customers.
As an investor I have to take in consideration Management's actions and ask myself how much this is going to impact Adobe future growth and dominance in the market.
(For disclosure: I have a small position in Adobe and I am not planning to increase it.)
