Massive introductory discounts discussion

daverowland's picture

Following on from this Twitter conversation https://twitter.com/typographica/status/307302297250168832

There's obviously a lot of feeling about the recent trend of launching fonts with 80-90% discounts. Some foundries say it cheapens fonts, and some are forced to emulate the offers in order to be noticed. As a marketing technique, it really works well in the short term as it pushes the new fonts quickly up the sales charts, but after the sale's ended, how long do they stick around?

The sales charts at MyFonts are based solely on dollar value, so a font family at $5 has to sell ten times as many as one at $50 to reach the same chart position. I had an idea for weighting the charts in favour of more realistically priced fonts:

Font Family X - standard price $200, 90% intro offer = $20 each family
Font Family Y - standard price $200, 50% intro offer = $100 each family
Font Family Z - standard price $200, 0% intro offer = $200 each family

As it stands, to reach the same position, X needs to sell five times as many as Y, which needs to sell twice as much as Z.
If the sales charts mechanism was changed such that the dollar value received was also affected by the offer price, say by taking half the offer percentage off the resulting price (only for working out chart position), the prices of each font above (in terms of how the chart sees them) would be:

Font Family X - standard price $200, 90% intro offer = $20 each family . minus 45% = $11
Font Family Y - standard price $200, 50% intro offer = $100 each family . minus 25% = $75
Font Family Z - standard price $200, 0% intro offer = $200 each family . minus 0% = $200

Clearly, the more heavily discounted fonts now need to sell even more in relation to non discounted fonts to reach the same position in the chart. There is still a marketing advantage to putting your fonts on offer, but the more ridiculous offers would not be as effective as they are now.

What do think? Is this fair? I'm undecided, but I think the system as it is now is starting to force foundries making decent fonts to discount heavily in order to keep up with not-so-decent fonts. If it continues, it won't be long before every new release is 99% off for a month then never sells again after that. If a new system could be shown to give more long term sales, that can only be a good thing.

hrant's picture

So your plan is to convince MyFonts to change their ranking policy? To prevent foundries from harming their brand out of desperation for a good ranking? What's in it for MyFonts? Maybe they like it this way?

BTW, I'm not sure that a brand is damaged because of discounting. Jeremy Tankard has a very strong brand, but he discounts up to 95% (if only for one day). After all, the best way to build a brand is to get people to use your stuff.

hhp

ralf h.'s picture

the system as it is now is starting to force foundries making decent fonts to discount heavily

No one is forced to anything. Those are “market penetration” offers. They are supposed to reach an audience which has over 100.000 fonts to choose from and hundreds of new Twitter messages every day. So for a short period of time you make a loud offer people can't resist and by this you spread the word. That's it.
Those fonts don't sell because they are in the bestseller list, but because of the offer itself, which is such a good deal that people start to spread the news and that creates the snowball effect. So I don't think it's caused by the list or it's calculation.

If it continues, it won't be long before every new release is 99% off for a month …

Certainly, that will happen for some fonts.

… then never sells again after that.

MyFonts is just a retailer. It's up to the foundry to keep the sales up and there are many different strategies to achieve this. A bestseller list is just that. It shows what sells. It can't weigh anything to support “quality fonts”.
Maybe they could start an “Editor’s choice” section where quality fonts are suggested, but I don't think we need to blame the calculation of the bestseller list for how foundries set up their pricing.

daverowland's picture

Fair points. As I said, I'm undecided. I wouldn't ask MyFonts to change anything; they've been good to me! It was just an idea. I'm not really concerned about cheapening my brand by putting things on offer. If I was overly concerned with my 'brand' I'd have ditched a load of fonts by now. I guess I just feel for newer foundries whose only way of gaining exposure is to underprice. I have a feeling this pricing model may just be a trend that is unsustainable in the long run. I hope so anyway.
My worry is that customers may stop buying any fonts at full price, knowing that vastly discounted fonts are never far away. Hopefully though, this may cause foundries to make ever more interesting and different fonts, as big discounts cease to be a factor in separating their fonts from others', because virtually all fonts are hugely discounted.
BTW, I don't wish to come across like I'm saying all fonts with big discounts are bad, or that big discounts are inherently a bad thing. I just wanted to carry on the discussion where participants could use more than 140 characters!

Anthony Noel's picture

Hi Dave,

Take a look at MyFonts' best sellers list, instead of the Hot New Fonts list. I might be wrong, but nothing on the best sellers list is currently on an introductory sale, but there's plenty on there that were. That would seem to indicate that the penetration idea works, and that sales are sustained afterwards by a font's higher visibility. There's also fonts on there that were promoted by other methods, such as free weights (which remain free, by the way – no restrictions there).

Anthony

Bert Vanderveen's picture

imo: The intent of introduction offers like these is to get the fonts in the market in a fair volume. My reasoning is that a lot of designers (maybe not to sure about their knowledge in this field) are wont to go for what is used by their ‘well-known’ contemporaries.

Mr Buivenga’s fonts are exemplars: they have become very popular, clearly because they have been used in high profile material.

Jan Middendorp's picture

As Ralf notes, it was the foundries, not MyFonts, that developed the concept of extreme introductory discounts. Probably the first full family sold at a breath-taking introductory price on MyFonts was HVD’s Pluto in mid-2011; it has remained a seller at full price. But I wouldn’t be surprised if Hannes was inspired by the high-profile introduction of Axel (a Spiekermann production) two years earlier by FontShop Germany at less than €/$ 20 for a four-weight family.
While typohiles (including some of us at MyFonts) may have mixed feelings about the trend, it does have its positive aspects. Typically, non-pro and semi-pro customers have always bought single weights, even when volume discounts on larger (text) families were substantial. Thanks to the family-at-the-price-of-one-weight craze, average users have become familiar with the idea of buying an entire type family, which to many always seems to have looked like a rather extravagant and unnecessary kind of purchase. So while some argue that low prices teach people a wrong thing (fonts can be cheap) it might also teach them something good: fonts don’t necessarily come one at a time.

hrant's picture

Jan, good points. One thing though: foundries might have figured out the trick themselves, but MyFonts probably created the environment that made it a good idea.

BTW here's a cool experiment somebody should try: simultaneously release multiple essentially identical versions of the same typeface, giving each a different discounting strategy (and choosing neutral names so that doesn't throw off the results) then watch how they perform for a year.

hhp

russellm's picture

BTW here's a cool experiment
This has been done in cheese stores in France. I identical cheeses were sold under different brands and at different prices. People tended to prefer the more expensive 'brand', apparently assuming high price equals higher quality. I think I read about it in Ogilvy on Ogilvy.

dberlow's picture

BTW!!! Here's a cool experiment someone in the font industry should try! Make frozen lasagna out of beef, horse, rat, road kill and sawdust, labeling and packaging each identically, but making the beef the cheapest, the sawdust the most expensive, etc., and see which one gets caught by the Food Police first!

I'd bet on the rat or the road kill.

hrant's picture

That would only fly in the UK. ;-)

Russell, we might end up proving that fonts aren't cheese and Hemet isn't Paris...

hhp

metalfoot's picture

As an end-user of fonts who is not a graphic designer or typographer by trade, I must admit I am more likely to buy a font at a low introductory price of $20-$50 than $200-300. It just doesn't make sense for my budget, given I have no means by which to charge out the price of fonts, to spend more than that for me. That's just speaking for me and my limited budget. This is why I openly admit to owning WordPerfect and CorelDraw as much for the font libraries which come with the software license as for the software itself.

Nick Cooke's picture

Some users are prepared to pay for quality. For many years Stella Artois used the slogan 'Reassuringly Expensive'.

russellm's picture

fonts aren't cheese
You sure that's always true?
Regardless, people are always people. No matter where we go... There we are.

hrant's picture

One of the best lines from "The Adventures of Buckaroo Banzai Across the 8th Dimension!".

hhp

Chris Dean's picture

I can see two sides:

1. A desperate, last ditch attempt to sell a luxury item during times of economic collapse.

…or…

2. A natural evolution of an existing market which is still trying to figure itself out, post-internet (and all that other fancy computer stuff).

Look at iTunes. Who would have thought selling a song for a dollar would have brought the record industry to it’s knees? I’m not a musician, but thanks to iTunes, I think its significantly easier to get your music out there. Friends of mine can do this today, who would not have been able to do so a decade ago. Regardless of talent or financial means.

hrant's picture

BTW is it true that most massive discounts only happen upon launch, and then almost never again?

the record industry to it’s knees?

?
http://www.bbc.co.uk/news/technology-21601602

hhp

ralf h.'s picture

1. A desperate, last ditch attempt to sell a luxury item during times of economic collapse.
2. A natural evolution of an existing market which is still trying to figure itself out, post-internet (and all that other fancy computer stuff).

3. The growth of a market into a new field.
As Jan already mentioned: MyFonts opened up a new market. If you look at MyFonts’ homepage you clearly see, that those offers are not meant for the same kind of people font licenses were sold 15 years ago. The design studios buying the 500–1000 Dollar packages are still very important, but there is now a huge market of individuals who are willing to spent 20 to 50 bucks for a font. And with deep family discounts they might even purchase licenses for those.
I don't see anything bad about it. Especially as long as those are only introductory offers. After the first 45 days, a quality typeface will still be a quality typeface available for regular prices.

hrant's picture

Ralf, don't you think there might be an image problem? Do you think foundries that don't do heavy discounting are making a mistake?

hhp

JamesM's picture

And many designers feel pressure to keep costs down. If you're a big agency with big clients, the cost of fonts might be a drop in the bucket, but for freelancers and small agencies working on lower budget projects, adding $500 (or whatever) to your invoice for new fonts can be a bigger deal.

aluminum's picture

hrant, iTunes brought the industry "to it's knees" in the sense that iTunes was a major interrupter of the traditional distribution and retail model...and in that sense, was somewhat of a 'great equalizer' in that everyone had an equal opportunity for 'shelf space'.

I don't think MyFonts is quite as extreme, but for a large part of this industry, it appears to be mimic that.

ralf h.'s picture

Ralf, don't you think there might be an image problem?

So far I don’t see any negative effects for the foundries who do it.

Do you think foundries that don't do heavy discounting are making a mistake?

No. Every foundry needs to find its market and the appropriate strategies. We can't go all for the same people who only go for these sale prices. If we do that, it would stop working. In the same way as we shouln’t do it all like Exljbris or TEFF is doing it.

John Hudson's picture

If I were licensing retail fonts through a major distributor like MyFonts, I would be inclined to try a kind of Reverse Dutch Auction release pricing. A Dutch auction involves a gradually reducing price for a limited commodity (classically, flowers). A reverse Dutch auction seems to me a good model for an unlimited, digital product, for which the price gradually increases over time. So begin with a massively deep discount for, say, a week, and then start incrementally increasing it up to the full retail price. The latter could either be a fixed amount comparable to other fonts, or simply at whatever level the particular font continues to sell an average of X licenses per week. Just an idea. I've no idea how well it would work in practice, so don't blame me if you try it and end up unhappy with the results. If you do try it, please let us know how it goes.

hrant's picture

OK Ralf (and of course anybody else) let me ask it this way: What's a good reason a foundry would not offer steep discounts?

John: Do you think that would work better as an official/predictable/explicit pattern, or would it better to keep people guessing?

hhp

1996type's picture

Here's why people, including me, fear these huge discounts: they might create a market where nothing but extremely cheap or discounted fonts sell well. This market obviously isn't there yet, but the fear for it is.

Here's a thought I had recently. Let's say this movement continues, and 'normally' priced fonts don't sell well anymore, somewhere in the future. Could we not simply conclude that due to the large amount of quality fonts, foundries have to compete more, and the market equilibrium has shifted? End of the golden days for font designers? Perhaps it's been a bubble that's about to burst.

John Hudson's picture

Oh I think it should be a well-advertised pricing structure. Although the calculations differ, the idea is the same as for a regular Dutch auction, to enable the buyer to make reasoned decisions within a predictable structure. Because Dutch auctions apply to limited commodities, there is an element of gamble involved in waiting for a lower price (someone else might be willing to pay more, and you'll be left with nothing). In my reverse model, with rising price, there is no gamble but there is pressure to buy early, increasing upfront revenue, but without the simple jump from deeply discounted to full price. I see it also as a useful tool for designers dealing with clients: "This is the font we want to use for your job, but the longer you delay decisions/budget/PO the more it is going to cost."

The other benefit I see in the model is that it provides a trackable progress of sales relative to price -- adjusting for other factors --, which is something sellers generally lack. The process by which the 'market' determines price is generally pretty much guesswork: a seller looks at similar products, and guesses how much he might be able to charge. He typically has no data to tell him whether he might, in fact, make more money selling at a slightly lower price or if he might sell the same volume at a slightly higher price. By gradually increasing the price over time, one can collect information on buying behaviour relative to price.

ralf h.'s picture

End of the golden days for font designers? Perhaps it's been a bubble that's about to burst.

Quite the contrary! The prices fall because of the higher demand! There is no definition of »normal« font prices. It's just what we are used to. A photolettering disc did cost 20 times what a font costs today and it only had around 200 characters and could not be used indefinitely, let alone be copied to 5 machines.
There is nothing wrong with falling prices when the number of sales rises, especially with digital goods.

Nick Shinn's picture

…fear these huge discounts: they might create a market where nothing but extremely cheap or discounted fonts sell well.

That’s not the way the Long Tail works, and MyFonts is very much a Long Tail marketer in a Long Tail product category.

For instance, Shinntype rarely has fonts in the MyFonts top 50 and doesn’t offer huge introductory discounts or free anything, but this distributor provides us with a steady income from incremental sales of many typefaces, some of which (Beaufort and Handsome) have been there since MyFonts started over 12 years ago.

Fonts differ from most (consumer) products in that they are not fundamentally subject to rapid obsolesence or the immediate hard sell of a special offer. When someone is looking for a font for a particular project, especially when doing a keyword search, they will consider a variety of typefaces, not just what’s hot at the moment. They might remember something that caught their fancy several years ago, but which they haven’t yet had the opportunity to use.

Typefaces can become fashion items, but they are also extremely durable, both stylistically and technologically.

Ultimately, if one applies the Long Tail or Zipf distribution to itself, it becomes apparent that while one end of the curve is subject to fashion, price, and popularity, a large part of the market does not follow these principles.

For instance, the Scotch Modern is not presently considered a good text type, and the Shinntype version is very expensive, has never been discounted, and has never made a best-seller list. Yet once in a while someone somewhere decides they gotta have it. Niche.

hrant's picture

Ralf, what's a good reason a foundry would not offer steep discounts?

John:
1) What about introducing a gamble element by limiting the discounted pricing not by time, but by number sold? I think Tankard does this, or at least a hybrid mixing time and number.
2) Do you think some potential buyers would be turned off by a pricing model they might feel is contrived?

hhp

metalfoot's picture

If I may jump in one more time, I think the reality is that because certain fonts are ubiquitous, and it is only a subset of users who are even interested enough to care, the niche for fonts is just that, a niche; if it works better for designer "A" to build extremely high-quality fonts with full character sets and s/he is able to sell that work at a price which is fair to their efforts, great. On the other end, if designer "B" is just messing around and wants to sell some of their hobbyist labours for $5-20 a shot, and they sell a few, great. I know my co-worker at the small office where I work is pretty oblivious to fonts, whereas to me, they mean and signify a great deal.

So maybe it's like the book market; mass-market low quality Harlequins sell because they fill a niche, and high end literary books sell because they fill a niche. The Harlequin will generally make a greater profit, but there is no question which is the better quality book.

tmac's picture

When I started noticing these 90% discounts I thought, "This is an industry on its knees." As a consumer it made me feel very uncertain about my vendors (ie: people I buy fonts from). 90% discounts indicates an uncertainty about product value, as well as a great deal of semantic ambiguity when we try to define price and value to our end clients using product terminology that applies to physical objects, even as an analogy (any discussion about piracy, EULA, licensing fees tends to wander into this word-territory).

When I go and spend 600 euro on a font I will email the designer and ask if they respect their product enough to not go and have a fire sale next week. And if there is a fire sale, I want a refund on the difference. Granted, this discussion mostly pertains to new releases.

I like John Hudson's idea. It's rational and it provides motivation for buying. And that's the key: it's rational. The massive discount model (a discount ending when? and why?) has no explicit rational foundation -- by which I mean the buyer or end-user can't determine the reason. Sure, I'm seeing the reason in this thread, but not at the point of purchase.

And the real end user, the final client, what do I say to them? "Well, this font's not as good but it costs 99 cents at a 95% discount." Most people have never heard of discounts like that except on flawed or blemished goods; goods that don't work properly; children's toys made of lead at a night market.

Ultimately, I want beautiful work-horse typefaces that I have to pay a fair bit of money for and not everyone can afford. Snobbery? Yes: an arbitrary taste-making distinction. Fortunately, I'm well served by dealing directly with the foundry.

All of this leads me to think the 90% discounts harm the myfonts brand more than anything else. Mostly because their top-seller charts are unreliable indicators.

Chris Dean's picture

Side question: Out of curiosity, how many people here follow the stock value of Monotype Imaging Holdings Inc?

(go to http://ca.finance.yahoo.com — their symbol is TYPE)

5star's picture

Side question: Out of curiosity, how many people here follow the stock value of Monotype Imaging Holdings Inc?

I do.

n.

Chris Dean's picture

And they’re giving it away for free, post merger announcement.

May you live in interesting times.”
~Ancient Chinese curse

hrant's picture

What are they giving away for free?

BTW, what big thing went right for Monotype towards the end of last year?

hhp

ralf h.'s picture

When I go and spend 600 euro on a … And if there is a fire sale, I want a refund on the difference.

Try that idea on the stock market. ;-)
When you buy something, you and the seller have agreed on the “worth” of that product at that time. That's it. The deal is closed. If the font is cheaper tomorrow, how does it affect you? It's the same font. Nothing has changed. You have willingly agreed that the font was 600 Euros worth to you and you got it for that price. There is nothing that you can or should do.

Mostly because their top-seller charts are unreliable indicators.

Indicators for what? Certainly not for quality, because that doesn’t work in any branch.

hrant's picture

There is nothing that you can or should do.

If you think a seller has acted inappropriately, you most certainly should do something. Also, this black-and-white view clearly does not correspond to reality, especially not in the US: people get sellers to give them money back without "having to" all the time. When Apple dropped the price of the iPod (or maybe it was the iPhone) by a big amount a few years ago, people complained and Apple gave recent buyers a $100 voucher. So go ahead and complain away! No human needs to be forgiving towards a corporation, only other humans.

hhp

tmac's picture

Ralf -- see, again I will have to fall back to physical objects. Many retailers guarantee your paid price, and will refund the difference if the price drops or if you find it cheaper elsewhere. That's after the purchase and for a limited period of time. I recently had this conversation with a foundry. It's a strange conversation to have. Fortunately, they did not share your opinion. Because we are two human beings.

The stock market is something else entirely where the assumption of risk is understood.

Maybe I'm a dreamer but I still believe trust is an essential aspect of a commercial transaction. Trust is the underwriter. If we didn't have trust (and humanity) as part of the transaction, then I would just steal fonts.

*unreliable indicators
I was thinking of it as an indicator of the quality of a font. Not the quality of the typeface. Of the font itself, which is measurable. I'm probably delusional on this one.

daverowland's picture

John,
I like the reverse Dutch auction idea, especially if governed by units sold rather than time. At present, this style of discounting is not possible at MyFonts, where you can put your fonts on sale for a set period of time, and must wait another set period of time between sales. I think (I considered it!) it might be possible to do by issuing voucher codes, but then you have the situation where you have to find a way of publicising those codes. I guess foundries with enough following could do this pre-release on Twitter, but then these foundries probably don't need the discounts to shift fonts.

ralf h.'s picture

Many retailers guarantee your paid price, and will refund the difference if the price drops or if you find it cheaper elsewhere.

That's something very different. If you would want to make that comparison, it would mean that a web shop like MyFonts would offer you a refund if you find the same font on FontShop.com. MyFonts would be willing to give up a little bit of their(!) profit in order to have you buy it on their website. The maker of that product (in this case the foundry) isn't even involved in this deal.
So those retailers fighting over the cheapest offer is something very different from makers of products setting up their prices (including sale offers).

And if you want to compare it with physical goods: Every season there are new clothes, and when the next season starts, there will be heavy discounts for the same products. Do you expect refunds when you paid the full price? It's the very same good offered for very different prices. The only thing that has changed is the time of the purchase.

The stock market is something else entirely where the assumption of risk is understood.

My point was: the two sides agree about worth and price. Why should a buying option for other (future) customers make a difference? If I decide to double the price of my font tomorrow, because it sells like hot cake, can I then come to you as someone who bought it yesterday, and ask for 100% more? I guess not!
You will say: a deal is a deal. If you don't want pay that additional price, then you also shouln’t ask for a refund, should the prices drop for a temporary sale offer.

Maybe I'm a dreamer but I still believe trust is an essential aspect of a commercial transaction.

Certainly! Now that there are over 100.000 fonts available and the font makers can’t control the prices thru proprietary typesetting machines anymore, the human connection between buyer and sellers becomes very important. Maybe not if you buy at fonts.com, but certainly for all the independent foundries.
But this trust doesn’t mean that I will keep my prices unchanged forever, so existing customers can still “feel good” about their purchases. You got the product you wanted and you got it for a price you considered acceptable at the time of the purchase. There is nothing to feel bad about, should the prices change (in one direction or the other).

hrant's picture

Todd, very well expressed.

Ralf, the reality is that many customers simply don't think the way you describe. If the price drops a great deal on something bought the day before, many people don't just feel unlucky, they feel betrayed. And quite often that feeling is entirely rational because companies don't decide to lower a price 5 minutes before, they've already decided at the time you bought it for the higher price. And when people feel betrayed by a company, the company pays for it - either by having to give back money or credit, or by losing a future customer (often due to word-of-mouth).

In many US department stores when you're about to buy something at full price, they will actually tell you to wait until the next day when the item will be discounted! Are they stupid to do that? I think they're very clever. And try using an expired coupon at almost any fast-food place: does it work? Yes. Think about why that's the case.

Retail businesses don't get rich by being fascist about rules.

hhp

daverowland's picture

The difference between clothes and fonts is that clothes aren't launched at massive discounts to boost sales, they're reduced in price *after* new, more fashionable clothes are released. Do any font retailers put the prices of their old fonts down when they release a new one? I once tried an offer whereby a purchaser of a new font could choose another from my library for free, thinking this would add to the desirability of the new font without hindering any possible performance in the sales ranking. I think it kind of worked - something to consider as another possible marketing strategy...

JamesM's picture

It's fairly common for larger stores to refund the difference (if requested) if an item you bought goes on sale within 30 days.

When I was in college I worked part-time in a department store and I can assure you that some customers get very bent out of shape if an expensive item goes on sale a few days after they purchased it. Typically they assume the salesman knew about the upcoming sale, which isn't always true.

ralf h.'s picture

If the price drops a great deal on something bought the day before, many people don't just feel unlucky, they feel betrayed.

Funny, that this only works one way, isn't it? No one who gets a sale price ever complains about having paid too little.

Anthony Noel's picture

Has anyone actually seen one of these massive discounts applied to a family at any time other than during its introduction?

This discussion about someone having paid full price for a font family, only to see it become available for a fraction of the price they paid a day or so later seems pretty hypothetical.

ralf h.'s picture

Linotype has started doing it. Last month you could get several full families (like Syntax Next) with over $700,- discount.

quadibloc's picture

I do think that people will be reluctant to buy X at ten times the price X was available at last week.

On the other hand, with fonts, the only reason someone has to have X, instead of Y or Z, is because it's what everyone else is using, it's what is fashionable. Popular, recognized typefaces get specified by name.

So low prices work, in that they remain profitable if the ultimate sales volume is high enough. And high prices don't make sense for the thousands of me-too fonts.

It seems to me that it's very hard to be a financial success from designing new typefaces.

hrant's picture

No one who gets a sale price ever complains about having paid too little.

Yup. That's the difference between a human and a company.

hhp

Anthony Noel's picture

Linotype has started doing it. Last month you could get several full families (like Syntax Next) with over $700,- discount.

The Linotype sales are rather interesting examples – limited to just a few hundred units sold and for only a day or so (whichever comes first).

In terms of techniques to cut through the avalanche of very similar products and promotions, it could be very effective.

It might not make the most of the extra exposure new fonts are automatically granted on MyFonts, but doing some moderate discounting later on in the life cycle of a font might be an alternative option.

A.

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