The User Generated Font Community

from the challenging-business-models dept

It's often amazing to see the larger struggles of one industry reflected in a very similar situation in a much more narrowly focused industry. Obviously, we've had tons of stories about major media operations, from television to radio to newspapers have suddenly struggled to compete in a world where there's also user-generated content to compete with on all levels. Certainly, most of that user-generated content is not very good, but that's missing the point. Some of it is quite good -- and the good work tends to get noticed and float to the top. Basically, the old guard no longer has a monopoly, and that can require a major adjustment in terms of both product and business model. And the same thing is happening in much more narrowly focused markets -- such as fonts.

A few months back, we wrote about how one font company got so upset that one of its fonts was found on a file sharing network that it sent a huge bill to the guy it believed was responsible, and then increased the price on the font, along with a huge rant about people "stealing" their fonts. This is like the RIAA flipping out over file sharing -- and rather than recognizing that the unauthorized file sharing was actually a sign of people wanting a more efficient market -- trying to resist that market.

Then, compare that to this wonderful story in Slate about an online service called FontStruct that lets anyone create and share their own fonts. Suddenly, a large group of folks who didn't even have the means before can now make their own fonts. They're certainly not as good as professional fonts in most cases, but for many people they are good enough (and some of them are quite good). As the article notes: "FontStruct is the Casiotone keyboard of font-making. Maybe you can use it to bang out a credible pop song. Beethoven? No way."

But just as user generated content has changed other businesses, it also impacts these smaller businesses. Now some (and I'm sure the font company we discussed earlier would agree) will bemoan this situation, complain about the "amateurs," insult the crappy fonts and insist that it will hurt the overall market. But that's the wrong way to look at this. What we're seeing is more fonts available, and more people even being aware of font possibilities. The best work bubbles to the top, thanks to a rating system. A good font designer can use a program like this to highlight and promote his or her works -- and then sell the ability to do custom work as well, or additional design work. It becomes a win-win across the board. More fonts are available, it's easier for the best designers to promote themselves, and more people who would never consider paying for a font learn about what's possible and available.

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Font Company Can't Come Up With Good Business Model; Punishes Customers

from the yeah,-that'll-work dept

Tyler Hellard writes in to alert us to the bizarre and self-destructive plan of a company called Letterhead that sells different fonts. The super paranoid company apparently includes the name, email and account ID of each purchaser with the font itself. One font buyer shared the font with a company making a sign for him (which seems reasonable enough) and that company ended up sharing the font on a file sharing network. That's the point at which Letterhead went ballistic. It claimed that every single download was "stolen" (which, of course, it was not) and then sent the original purchaser a bill for $944 for all of those downloads (Update: Apparently the folks at Letterhead aren't happy about this post -- they've blocked anyone coming from this site, so if you want to see the article, you need to copy and paste the URL, rather than just clicking the link. Apparently, they don't deal with criticism well.). How many downloads were there? A whopping 32 copies. But Letterhead falsely assumes that all 32 would have purchased the font (no, they would not have) and then thinks it can change its original deal with the guy so that they can charge him for those downloads. The company also published his name and his contact info (which would appear to be a violation of a customer's privacy).

Then, to make things even more ridiculous, Letterhead decided to punish all its own customers for its own inability to put in place a business model that recognizes basic supply and demand. So, along with publishing the story and this guy's name, it's significantly raised the price of the font from $30 to $40 -- saying that it will keep the price up until the full $944 is paid off. This is doubly stupid. Not only are they making it even less likely that anyone will buy the font, they're now competing with the fact that this font is already out there available for free. That's not the time at which you raise prices. Obviously, they're trying to shame the guy into paying $944 -- but the real problem is the company doesn't understand its own market or the products its selling.

In fact, it goes out of its way to admit that it doesn't understand digital goods by claiming:

"Fonts are tangible goods around here and will forever be treated as such. Theft always affects the price of fonts and there are some costs that must be recouped. (1) The time that Duncan Wilkie spent in creating the fonts (2) The time Letterhead Fonts spent in helping Duncan to refine his fonts (3) The time and advertising dollars Letterhead Fonts spent to promote LHF Garner (4) The time Letterhead Fonts spends removing LHF Garner from the file-sharing websites."

This shows a fatal lack of understanding of basic economics. First, fonts are not tangible goods. They never have been, and to say that the company will always consider them to be suggests that it will probably go out of business well before businesses that understand what they're actually selling. Then, claiming that there are specific costs that need to be recouped, again is a misunderstanding of economics. Yes, costs need to be recouped, but that's the responsibility of those setting up the business model -- not the customers. Furthermore, the company falsely includes fixed costs with the marginal costs in figuring out how to "price" the fonts, again insuring that other companies will be able to create much more reasonable business models.

Basically, the company is advertising its ignorance of basic economics and its own products and market, while punishing customers for its own incompetence. It may think it's going to shame one of its customers into paying, but all it's really doing is convincing a lot of folks never to buy anything from Letterhead fonts in the future.

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