Royalties and Myfonts.com

[Member ben…]

For those selling fonts currently, I wanted to engage a discussion around royalties, particularly in reference to Myfonts.com. They currently control so much of the market that it seems they have unilateral power to set royalty rates, and contract terms, for type designers. So, some questions around that:

• Does this hurt the business by creating enormous financial uncertainty for designers? For example, their rate used to be 85% I believe, then lowered to 65%, and now to 50%. How can a designer justify creating new typefaces when the rates can be changed at any time? Font design is not a super profitable business, so those margins make a difference in whether I would choose to design new typefaces.

• Does MyFonts actually invest most of this money, or do they simply pocket the difference? My sales have certainly not increased over time.

• Can we, as type designers, organize for better, or at least more consistent rates? Or are there other alternative places or models out there we should be moving to?

[Member Ric…]

Certainly Myfonts' near-monopoly in the font-reselling market makes several people uncomfortable.

As for alternatives, I find Fontstand as the most interesting, but it's not yet for everybody.

Also interesting, the fact that Adobe's latest release is sold through Fontspring.

[Ralf Herrmann]

On 15. Oktober 2015 at 9:48 PM, benmahern said:

• Does this hurt the business by creating enormous financial uncertainty for designers?

In general, it’s just normal business and the rules of supply and demand. Discussing what is going on here would mean discussing business economics in general. (As an example: A book seller might also take 50 percent and the author of a book gets only like 9% …)
Regarding the specific question: focussing on the royalty shares alone is not the best approach, in my opinion. What matters most is the bottom line — the actual income. If you sell at two reseller shops, one giving you 50% and one giving you 90%, but the first still brings in double the money, which is the better choice? 
And that’s the situation for many foundries with MyFonts. The latter has such a huge user base and such a user-friendly shopping site, that it’s likely they can create a lot of sales for you, which wouldn’t have happened otherwise. And I know this from my own perspective: as a font user, I am much more likely to both find and buy your font if it is listed on MyFonts. And that is what is justifying the cut for MyFonts. 

That being said, I am feeling a little bit uneasy about the relationship between MyFonts and the individual foundries myself. Not necessarily regarding the royalty share, but regarding what is put into the relationship. Every aspect of MyFonts regarding sales is constantly optimized. Yet, nothing is happening for years regarding the foundry-owner sections. We even have to go to old.myfonts.com for certain features. So while foundries are forced to lower shares, I don’t see much investment in this relationship as long as it doesn’t directly lead to sales.