I was just surfing Internet, when this interesting article caught my eyes. It was on Adobe Flash player. Have you ever wondered how much Adobe gets paid by Google (the owner of YouTube) for using its Flash multimedia software? If you are thinking in billions, you are thinking wrong! Actually, neither Google nor any site that uses Flash to stream a video pays anything to Adobe! Though Flash player is the most widely available software in the world, it generates $0 for Adobe in terms of revenue for playing these videos.
Now it looks like Adobe is in a great mood. They are going to eliminate the fees that phone giants like Nokia, Samsung and Motorola pay for installing Flash in their phone. That means by 2009 billion phones will be using Flash but without paying one single dollar to Adobe!
Well, it must have made you think that those running Adobe are either great philanthropists or poor businessmen. Actually, it is neither of the two. The main money that Adobe makes from Flash is by selling them to programmers and graphic designers who create the program that you view through Flash player! Makes great sense, doesn’t it? People are hooked to online videos and related stuffs and so the companies looking for online consumers will definitely want one to be made for them. Now when they ask the designers and programmers to make them one, they will have to buy Adobe’s multimedia production and editing tools such as Flash, Acrobat, Photoshop and Illustrator, to create those videos!
No wonder this excellent strategy of Adobe saw a 20% annual growth rate since 2002 and turned $3.2 billion dollars in sales last year. The share price of Adobe in that period rose four times higher than Microsoft, its biggest rival.
Now it looks like Adobe is in a great mood. They are going to eliminate the fees that phone giants like Nokia, Samsung and Motorola pay for installing Flash in their phone. That means by 2009 billion phones will be using Flash but without paying one single dollar to Adobe!
Well, it must have made you think that those running Adobe are either great philanthropists or poor businessmen. Actually, it is neither of the two. The main money that Adobe makes from Flash is by selling them to programmers and graphic designers who create the program that you view through Flash player! Makes great sense, doesn’t it? People are hooked to online videos and related stuffs and so the companies looking for online consumers will definitely want one to be made for them. Now when they ask the designers and programmers to make them one, they will have to buy Adobe’s multimedia production and editing tools such as Flash, Acrobat, Photoshop and Illustrator, to create those videos!
No wonder this excellent strategy of Adobe saw a 20% annual growth rate since 2002 and turned $3.2 billion dollars in sales last year. The share price of Adobe in that period rose four times higher than Microsoft, its biggest rival.
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