Adobe Changes Price Model
by Calvin Reid -- Publishers Weekly, 1/14/2002
Looking to encourage the distribution and sale of e-books, Adobe Systems has restructured the pricing of its Adobe Content Server, its e-wholesaling and DRM software package, eliminating transaction and renewal fees for its software and allowing e-book consumers up to four downloads for each purchased title.
James Alexander, director of cross-media publishing, told PW that the company will no longer collect a fee on each individual sales transaction for an Adobe e-book. Alexander told PW, "One of the biggest complaints we get is about transaction fees. Our customers don't like them and they're expensive for us to manage."
Alexander said the new pricing schedule would also eliminate yearly renewal fees for the use of the Adobe Content Server. Adobe originally charged $5,000 a year plus transaction fees. "Usually, when you buy software, you can use it forever. You don't pay a fee everytime you use it," said Alexander.
The new plan will have two tiers of pricing. The first is for a publisher or retailer selling from a single site. There is a one-time fee of $5,000 for a site capable of hosting 250 titles; expansion upgrades are available for $1,000 per 500 titles. The second tier is aimed at application software providers, e-publishing vendors looking to support mutiple retailing sites. ASPs would pay a one-time fee of $10,000 for a single site supporting an unlimited number of titles, plus $1,500 for each additional site.
Alexander said he hopes the new pricing model will appeal to small publishers. Adobe Content Server will also give consumers four downloads of any title they buy. "It addresses the fair-use issues," said Alexander. "If your machine crashes or you need copies for another machine. And if you want to get into the educational sector, you have to provide multiple copies."
According to Alexander, sales of Content Server rose 57% between the third and fourth quarter of 2001. "We're seeing tremendous activity. All the hype about e-books was good it gave us a public platform," he told PW. "The reality is that the e-book industry is moving forward nicely. We just need realistic expectations and more titles at reduced prices."
