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. icon
    Peter Blaise (profile), 16 Apr 2008 @ 9:49am

    In summary, returning to the point of the matter ...

    Wow. A confluence of problems and miscommunication, compounded by a steep personality at the font company. Where to start, where to start ... ?

    "World's First $1,000 Font?" I don't think so! I remember the first commercial digital version of Rudi Ruzicka's Fairfield was $1,500, so this company's claim for the "first $1,000 font" is remarkably inaccurate, revealing that they don't even know their own industry history. I have also sold private, custom fonts for $2,000 and didn't think much of it (except that I didn't get paid adequately for my time, more like minimum wage!).

    Here's what I see. There are two worlds that will apparently never meet in friendship:

    - original creative artists

    versus

    - copyists.

    As a (self proclaimed) world-class font wizard and designer, I quickly saw the price of fonts fall from hundreds of dollars for off-the-shelf fonts, to $1 a font on licensed CDs from the big names, to 1/2 cent a font for clone knock-offs on CD, to ZERO over the Internet. And, what's worse is that expensive Adobe and Monotype versions still sucked and needed smoozing to work without error, only Bitstream (the first wholly digital foundry) fonts worked first time, every time. So, I had to re-digitize fonts from any source anyway to get them to work, often also needing to replace or add enhanced characters malformed or missing from the suite. So, why pay $40 or more for a single font face that I have to rebuild, when ZERO is the price of the competition (that also might need rebuilding anyway)?

    On the one hand, I applaud the mentioned font foundry for saluting and singing the praises of their typeface designers, and trying to provide a revenue stream for their effort.

    On the other hand, this publicity is not positive, and actually is fostering publicity for their competition. Doh!

    Personally, may I suggest a LEGITIMATE free alternative? I cannot think of a kinder, nicer, fairer, more considerate, person in the FREE font world than Glenn Folkvord, the Font Man at

    http://www.fontcollectors.com/

    http://groups.yahoo.com/group/fontpacks

    ... who says at http://fontcollectors.com/linkpiracy02.htm

    "... bandwidth theft and link piracy ... against people who can't be bothered to ask before they ... benefit from my work ... Obviously the fonts themselves are not mine but I spend a great deal of time ... the least I should expect is that people download as members from MY list/group ... the only real satisfaction I get ... is to see that the member count always grow, and ... know that ... people enjoy the fonts ... I welcome all new members and hope you will enjoy the fonts ... I don't want to come across as an self-important guy or blow the link theft out of proportions ... enough is enough and let's get back to collecting them there fonts, OK? ... P.S.: If you ever use a font for something, I urge you to buy a license from the font's creator. If your newsletter or website or company benefits from a designer's font, he or she should benefit too, it's the right thing ..."

    Very different attitude there, eh? Some people KNOW how to behave and run their organization with respect for everyone - you set a great example, Glenn. Thank you!

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