EBay scam forces Adobe to pull plug on low-cost video-edit deals
Adobe's Premiere Pro video editing software will soon no longer be available bundled with low-cost hardware. The move looks intended to stop copies of Premiere, Encore DVD and Audition – the programs in Adobe's Video Suite - being sold cheaply in eBay auctions.
Seemingly, dealers, principally a small number in the USA, have been making a killing by knocking out the individual programs on eBay having unbunded the Suite from low-cost packages that pair Adobe's software with video-editing cards.
Trade insiders say that Adobe's hardware partners were asked to try to stop this happening but failed to do so in any meaningful way.
The change took place at the end of March and, though there does seem to be quite a lot of product in the distribution channel, this will start to dry up in the coming weeks.
So, it will soon no longer be possible to buy ADS's astonishingly cheap API-750 Pyro Professional – a £380 package pairing an OHCI FireWire card with Premiere, Encore DVD and Audition.
And Matrox's RT.X10 Suite - street price £480 inc VAT for a real-time analogue/DV card and the Adobe bundle - will soon be history as well.
So, too, will Matrox's RT.X100 Xtreme Pro Suite (£830) which pairs Matrox's more powerful real-time card with the same three-program Adobe Video Suite.
However, the RT.X100 gets a temporary reprieve. For now, Adobe is allowing Matrox to continue selling the RT.X100 Pro Collection. This bundles Matrox's card with a four-program package that adds the Standard version of the After Effects special effects software.
And, to keep RT.X100 sales flowing, Matrox has reduced its own margins. The suggested price of the RT.X100 Pro Collection has come right down from £1,115 to £899. That's only about £80 more than the three-program RT.X100 Suite - not bad when After Effects is nominally worth £500 or so on its own.
Matrox will also be selling the two RT.X cards as hardware-only package called the X100 (£468) and X10 (£300), aiming them at people who already have Premiere Pro or the Adobe Video Collection.
However, the reprieve will be short-lived. In an expected second-phase change, Adobe is going to refuse to sell for bundling its next-generation software – packaged as Video Collection 3 - unless the total price of hardware and software exceeds a certain figure – perhaps as much as the equivalent of US$3,000.
That would mean the death of RT.X100 card unless end users are prepared to pay a lot extra – though Matrox's new and much more expensive Axio hardware, which does have Realtime HDV in its roadmap, should be safe.
The RT.X100 does work very well now with Premiere Pro but won't ever be able to support HD or HDV – which is where Adobe and a lot of other software makers are concentrating much of their development.
So, seemingly, Adobe judged that Matrox's card had no real future, especially not paired with its next generation of software, and that may be unveiled later this week at the NAB show in Las Vegas (April 16-21).
Despite these forced changes, Matrox's Nabil Tarazi says that the company has no plans for developing its own video editing or DVD-authoring software. Instead, "Having invested many man-years in the development of Codec/plug-in technology", Matrox intends to continue exploiting this investment, "On current and future products to add value to the basic Adobe offering".
Matrox, he says, believes that there will be just three main survivors in the software editing world - Adobe, Avid and Apple. And Matrox will "continue to evaluate the areas where its hardware and software tools can add value, and will develop on those platforms."
But is Adobe expecting to have its cake and eat it?
The OEM Video suite that was being sold by its hardware partners helped establish Encore DVD as the de facto DVD authoring program for editors using Premiere Pro – hitting sales of Sonic ReelDVD and DVDit and Ulead DVD Workshop which used to be bundled by card makers along with Premiere.
And, of course, the low-cost Suite bundles, especially ADS's, helped buoy up Premiere Pro's sales volumes. That lift was much needed because two of Adobe's other big OEM partners, Pinnacle and Canopus, had started to pair their own competing editing software with their mid-market hardware.
Pinnacle abandoned Premiere totally in favour of its own editing software, Edition. Canopus introduced and rapidly refined its Edius software and appeared unwilling to devote sufficient resources to get its DVStorm card working well with Premiere, instead preferring to push on with development of Edius and Canopus's own HD/HDV hardware.
But, though bundles helped maintain respectable sales volumes, Adobe began seeing them as lost-revenue. Hardware companies who buy the OEM bundles pay very keen prices, so Adobe makes far less profit than with retail sales of its Video Collection, especially those through its own web store.
However, there's considerable doubt whether Adobe will be able to grow profits once low-cost bundling deals are gone. New purchasers may choose not to buy Premiere or retail bundles that contain the program, opting instead for cheaper competing programs.
And the company can expect little support from specialists video editing system builders. All of those we've spoken to complain of being undercut by net-based box-shifters and, worse still, by Adobe's own web store – at times both sell to the public for less than the system builders are able to buy at trade prices.
The specialists are calling on Adobe to ensure they can buy the Video Collection at better prices, especially for use with laptops. If that doesn't happen – and with volume OEM sales a thing of the past - sales of Premiere Pro and related retail bundles could fall off a cliff once the second round of changes takes place.
Adobe may then have little choice but to greatly reduce retail prices and its own profit margins – undermining the whole purpose of the changes, and having alienating specialist dealers in the process.
