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
    RANDY HOWE, 15 Apr 2008 @ 6:13pm

    LETTERHEAD FONTS

    Hey y'all - ME again ( just got back from Hilton Head and picked up a bit of a southern drawl )...
    anywhooo - so I know you're wanting to know - why has Chuck decided to freak out on ME, why would HE do what HE do if it wasn't true?
    Here's what went down...Chuck emails ME and asks ME to phone him about an urgent matter, so I do so. He tells ME that the Garner font I purchased is being offered up for free online and wanted to know how it got there. I told him I had no idea, and if indeed it was MY font, wanted to find out how it got there as much as he did. He asked ME about MY new website and the people I worked with to develop it.
    I told him there was no way that they distributed the font.
    ( I know this to be true and quite frankly don't care who believes it - how do I know? - I just know - end of story ) In fact - once they seen my collection of Letterhead Fonts, they were so impressed that they purchased several Letterhead Fonts of their own ( YOU'RE WELCOME CHUCK! )
    Next thing you know, I get an email from Chuck telling ME how sad and disappointed he was with ME, to get the font removed from the site, or he would go public and blah blah blah blah blah.
    That's when I said hang on a minute there Chucky Boy, if you want any help from ME, you had better give your attitude an adjustment, and if you don't, then you can kiss my ass, and feel free to go ahead with your threats...and so folks, here we are.
    Initially I received several nasty emails telling me what a dick I am. I responded to them all, provided them with my phone number so they could call ME and tell ME in person, or talk to ME and find out what really happened - no one took ME up on it - pithetic chickenshits. However, as time and Chuck went on, the tone of the emails began to change, and I was reassured that most people do have a sense of fairness at least.

    I will end this here, and welcome anyone to contact me or visit my website to see what all the fuss is about...

    THANKS ALL, RANDY HOWE
    519-426-0740
    www.gougerville.com

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