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.

Filed Under: downloads, economics, fonts, punishing customers, tangible goods

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  1. identicon
    Malbright, 16 Apr 2008 @ 6:10pm

    Letterhead Fonts

    It's true. Chuck has gone ballistic and handled this in a way that has created a lot of problems.

    But as I see it, it takes a great deal of time and energy to design and market a good font. It's a tough business to make money in, even for the big houses. Chuck has made it very clear that when you buy a font, you can do whatever you want with it, just don't put it in a pdf or send it with your files—you've got to make an outline of it first so it cannot be pirated or illegally copied. Since most of his fonts are for display purposes, this extra step really isn't all that big of a deal. Granted, I don't love the extra hassle. But imagine how you would feel if you saw hundreds of your fonts being pirated for free. Wouldn't you try and do something to stop it?

    Now, I'm not justifying Chuck's reaction. But I do understand how frustrated he must be. Even here on this thread there are people posting links to pirate copies of his fonts. I wonder how these people would feel if someone did the same thing to them?

    Someone made the comment that fonts are worthless and don't work, etc. That shows a profound ignorance of typography and the current state of the art.

    I may not agree with Chuck's handling of Randy's situation with his customer, nor of his citing God, though that's his god-given right. but what he is asking for in his EULA isn't really all that intrusive. He's just doing the best he can to apply some kind of DRM to protect his business.

    A font is worth money, and just because it's in a digital format doesn't change that. Fontographers need to do something to protect themselves, otherwise, all of us designers who rely on their art, their expertise and their assistance will suffer.

    It sounds like Randy made an honest mistake, and Chuck went ballistic. It's really a shame, because in my dealings with Chuck he's been a really nice guy and very reasonable. Moreover, he has always kept the price of his fonts quite reasonable, trying his best to keep prices low when many others are not doing the same.

    Remember, you never really BUY a font. You buy a license to use the font on x number of computers. The lesson is that when you buy any software, including typography, you need to read and abide by the EULA.

    Maybe some of you have better ideas on how Chuck can protect his fonts. If you think there's a better business model, please let us know, because everyone in the industry struggles with this every day.

    No, it is not right to publicly berate a customer and then make everybody else pay (although all of us pay the price for piracy in one way or another—Chuck is just being up front about it.) But it is also wrong to pirate software and fonts, obviously.

    I feel badly for Randy; the guy made a simple mistake and Chuck went nuts on him. But I also feel badly for Chuck, a person who runs an honest, quality business and is just trying to stop people from using his fonts for free.

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