Quick Question on Pricing

neil summerour's picture

Hi Everybody:

I got some great advice to post this question on the forum...so here goes:

I apologize for being vague, but I have to. I have a client that has approached me to expand a font I had done some work on awhile back. Currently, the basic glyphs are being used but this font needs to be expanded to include a full character set including diacritics, loads of clean up, lots of hinting and so on so that it can be used in a video game. It's a well-known video game with multiple iterations.

To say the least I am excited to take on the project but I need to provide a price...this is where I am concerned. I want to price it fairly but I do not want to 'give it away' given that this is a well known brand and very well known video game.

I am not looking to retain rights to the font.

Does anyone have any ideas as what my mindset needs to be, hoe I should be thinking about pricing this?

Thoughts?

.00's picture

A few questions...

Is the font in question yours? If not, who's is it?

Did you license the font to this company for the intended use, or is this a license extension?

neil summerour's picture

this is going to be hard to answer.

and it's because of how the font came about. there is not a formal license established. the designer who created the initial characters, created the glyphs for the sole purpose of using it for a singular set of print projects. The original designer of the glyphs would not be involved in this other than me showing/reviewing the additional work I do as a courtesy. I would want their sign off on the final work since they referred this aspect of the project then.

i would do this for exclusive use by/for them and do not see this ever being used by anyone else.

this is a strange set of circumstances, i realize which is why i have questions/concerns

aluminum's picture

At the risk of stating the obvious it seems like, at the very least, this needs to be figured out in a basic time/materials cost basis.

.00's picture

Besides the costs of basic time and materials (what would be those materials anyway?) the major consideration here is the licensing issue. A well know video game brand. Multiple iterations. You say a formal license was never established. Well it seems like the perfect time to establish that license. It could be quite a lucrative deal if it is negotiated correctly.

Before you decide on a price you should shop the hinting around. Requirements for applications like this are usually very specific, and even if you like hinting (!), you are better off jobbing it out to someone who does it all the time

paragraph's picture

In my view, if you negotiate a formal licence and not just an hourly rate, then you should split some proportion with the original designer. If not, you should at least include the original designer's time on review/advice in the billing quote.

neil summerour's picture

on splitting with designer....whole heartedly agree. same with their time.

bowerbird's picture

i assume you are dealing with a specific person
at the video-game company, or as go-between.

be frank with this person, but also understand
that this is a negotiation, not an interchange
among "friends", and that both sides desire
to have a fair and equitable deal done here...

state your desire to "do a great job for you",
especially as "it will be seen by lots of people";
express reservations that the amount of time
you would ideally like to spend can't be offset
by leveraging the product to other customers,
as the video-game company gets it exclusively.

here's where the frankness comes into play.
ask your contact, directly and forthrightly,
how much they've budgeted for your work.

you can add that this will give you an idea of
how much time you can devote to the project.

your contact will probably give you a range...
this should make your decision much easier.

if your contact wants you to go first, do this:
"you have 2 million customers; at a dime each
for my work, that would work out to $200,000.
or -- at a penny a piece -- it would be $20,000."

you can even bring up the idea of payment based
on royalties, such as a penny for every game sold.

your contact will never go for this type of deal --
because they want to avoid the messy accounting,
and they want blockbuster profits to stay internal.

but taking this tack will motivate your contact to
produce the range they have budgeted for you...

don't be afraid to take the top end of the range.

but it's perfectly ok to take the middle part of it,
if it seems like it will be a generous enough offer...
(it's much better to underpromise and overdeliver.)

you can also give the client some choice-points;
they can get the mid-range of their budget for
the basics, or pay extra for more of your time...
(a company rolling in cash will want your best.)

in the event the range you are given is too low,
don't be afraid to say it, and stand your ground.

even if the price is great, don't let them get the
impression that they have offered you too much.

"that's a little bit lower than i had in mind, but
i guess we can make it work..." is a good line...

remember, it _is_ a negotiation, and they don't
want to feel that they have paid you too much.
(companies rolling in cash are sensitive to that.)

in this vein, if you hear your contact saying,
"that's a little bit higher than we had in mind,
but i guess we can make it work", you'll know
that you've done this little dance successfully.

(and if your contact is experienced at doing this,
that is the line they will use to signal you that.)

whatever you settle on, once you've agreed to it,
you must put on a good face and do a good job.

you'll probably end up spending more time than
you anticipated -- pretty much a fact of life --
but a deal is a deal and you'll need to stick to it.

(at the same time, don't let 'em extend the work
unless they're also willing to extend the budget!)

enjoy the work, and then enjoy seeing your work
all over the world, and do congratulate yourself!

let us know how it goes...

-bowerbird

.00's picture

Hire a lawyer to advise you on the negotiations. Do not do this on your own. Your client will have access to legal counsel. You should make sure you are similarly assisted. Find someone who has worked in the type licensing world so they can advise you on what are the customary price ranges for these sorts of licenses. Do not do this on your own. This is all about managing and protecting intellectual property. Make sure you manage and protect it.

Ray Larabie's picture

I find that type of job is the most difficult to price. If I'm working on a font I get to keep/sell after the job is done, I charge less, about a fifth of the exclusive price. If it ends up being more work that I expected, I don't feel ripped off because I can make if back in the following decades of font sales.

But these jobs where I don't get to keep the font afterward, I'm just clocking in hours. Of course, no client is ever satisfied compensating for hours; they want a number up front. The time on a font can vary so much so it's really tough to do a proper estimate from the initial description. The solution that's worked well for me for non-exclusive or fonts the client owns is to offer free test work. I give a really vague price range just to see if they're expectations are reasonable. I explain that there's no obligation to pay for the test font. If it's non exclusive, it's still mine and if it's not then it's not my problem. Be clear about that in your negotiations.

The test font: It depends on the job but in general, I create a few letters, let the client test it on their equipment, do some test hinting, kerning on those letters, weight tests etc. If they bail out at that point, you've lost hour of two of work and there should be no hard feelings. I've done about 80 custom font jobs over the last decade and nobody's ever bailed out on me. Okay, one guy. I could have spent those hours negotiating the price, working on contracts, sending emails back and forth and it would have been time wasted anyway. I prefer to spend my time in FontLab instead of on the phone or Gmail.

By the time I've gone back and forth and have a working test font, I have a very clear idea of how much work is involved in the project and I can give them a proper price quote. I don't need to crank it up to allow for overruns. I can make a fair price. How much they've budgeted for their work or how deep their pockets appear to be shouldn't matter. Work is work: if you crank up the price based on what the client seems to be willing to pay . . . then I don't like you. I get paid what I'm worth. If it's too steep, they can try someone else. A lawyer? How annoying for the client. How annoying for me. How nice for the lawyers. I just set my price, set my terms and do the work and get paid. Maybe some of you think that's a naive way to do business but it works. Apart from the rights to the font (a separate matter) there's never been a need for me to use a lawyer. My client is a customer. Unless they've actually violated an agreement, there's no need to go down that road.

Maybe some people have had bad experiences with clients but I've never had a problem . . . except that one guy. I get the final quote to the client within days, not weeks, I get the job done and money in my account. The test font allows the client to do some early testing and in some cases it can vastly change the scope of the project. Clients often think they know what they need and find out later that they need something different. It happens a lot, actually.

Once in a while, a job goes a bit longer than I had anticipated. Sometimes, shorter. Time spent on fonts is time spent building my skills/speed, not time wasted. A few times I've asked a client for more because the scope of a job changed and they've always agreed.

That's my angle anyway and my experience with it has been very good. 10 years, and about 80 jobs.

Don McCahill's picture

I think everyone gets "that one guy". Eventually you get the ability to sniff them out and suggest they might prefer a different supplier.

.00's picture

Not such a quick question after all!

bowerbird's picture

typodermic, that's great advice!

i'm not sure it applies to the original poster
-- it seems that they have the job locked up,
(and, moreover, it was dropped in their lap),
so now it's just a matter of how to price it --
but for other situations your advice is great.

i might disagree slightly with your take on
differential pricing based on ability to pay.

if you consider yourself a "mere" craftsman,
sure, charge your hourly rate and be done...

but if you're an artist, well, what is art "worth"?

further, if the product as a whole is bringing in
millions of dollars -- or even, literally, billions --
it doesn't seem to me to be unfair or inequitable
to put that fact into your overall pricing equation.

and i absolutely agree with your distaste for lawyers.
some people's solution for everything is "hire a lawyer".

-bowerbird

.00's picture

I'm laughing at your distaste for lawyer comment. Sooner or later you are going to have to use them, and you are going to have to establish a very good relationship with at least one. Big money corporate licensing is not negotiated on the phone with you asking your client what the budget is.

I didn't think you all were a bunch of pikers, but my mind is being changed with comments like the above.

bowerbird's picture

terminaldesign said:
> I’m laughing at your distaste for lawyer comment.

that's so ironic. because i feel sad that your life
seems to have been filled with a need for lawyers.

> Sooner or later you are going to have to use them

just about every experience i've ever had that has
involved lawyers has ended up being unpleasant...
(except for that cute one i ended up in the sack with.)

most of the time, it's just a mildly unpleasant thing,
true, kinda like an icky case of indigestion, but still...

(indeed, the reason i probably chose to use "distaste"
is precisely because i associate lawyers with indigestion.)

> Big money corporate licensing is not negotiated on
> the phone with you asking your client what the budget is.

did you actually read what the original poster wrote?

this is a relatively straightforward job, one that was
essentially dropped into their lap (by someone else),
to "expand a font", where the "initial characters" were
designed by someone else, "who referred this aspect
of the project".

it seems to me that everyone involved in this thing is
acting honorably -- even the video-game company,
who could have just done the expansion in-house --
so i don't see the need to sic lawyers on anyone here.

if that's the first thing you always do, it's no wonder
that you find that your need for lawyers is constant.
(the whole legal system is designed to perpetuate
and extend the need for itself; it's quite insidious.)

-bowerbird

.00's picture

Oh I read the original post. And I read, It’s a well-known video game with multiple iterations.

Clearly you have nothing to do with the type business, yet you can go on and on offering your opinion about an industry you seem to know very little about. I just want neil to get everything he is due. No need to give away the original designer and his hard work. If a lawyer is needed why not? I'm always struck at the naïveté of most of the posters on this forum in regards to doing business. I may not wholly like the corporate world, but I've learned to how to live in it and make it work for me.

That's the last bit of pricing advice I give on this forum. Neil can sell his bit of work for a couple of hours of his time and feel fine, good for him. I still think you are all a bunch of pikers.

Give it away Give it away!! Good for you. Acting honorably? Hah!

paragraph's picture

James, just ignore the creature.

.00's picture

Thank you Jan, I will.

bowerbird's picture

terminaldesign said:
> If a lawyer is needed why not?

and if a lawyer is _not_ needed, why let one suck you dry?,
as well as pollute what could be a very happy relationship,
one that may well continue to produce some good healthy
recurring paychecks for a very long time down the line?

why?

hey, if you find yourself in a situation where you _need_
a lawyer, then by all means, make sure you _get_ one...

but don't invent a need for one if you don't have a need.
because they're not fun, and they're not cheap, not at all.

heck, even if you had a lawyer on retainer, in this case,
an ethical lawyer would opt out with a "you don't need
any legal assistance from me in this particular situation".

that's because both sides agree who will own the font,
so the only question is compensation, and you're not
going to get more pay just because you have a lawyer
on your side of the table. (in fact, after your lawyer takes
a cut, you're going to end up with significantly less pay.)

> Give it away Give it away!!

who advised the original poster to "give away" the work?

certainly not me!

search the text on this very page for "$200,000" and
it should become very clear to you that i wasn't telling
the original poster to "give away" any work. far from it.

i counseled to remind the video-game company of the
extreme reach that the font would receive in their game.

i advised specifically against thinking "hourly rate" terms.
(even though both sides agreed it's a "work for hire" job.)

but just because this is "a well-known video-game with
multiple iterations" (rock band?) does _not_ mean you've
won the freaking lottery, and you're entitled to millions...

one of the most irritating aspects of any big project is
the guy who did some small part of it, but comes in and
says their contribution was the sole reason for success,
and so demands a payoff that is wildly disproportionate.

and in this case, not only would you make yourself look
foolish, but it would also reflect on the original designer,
who had recommended that you be contacted for the job.

i'd guess the original poster can bill whatever they choose,
and the client will say yes, and everything will go smoothly.
and -- because of that -- the next time that client wants
something like this, they will call the original poster again.

no need for lawyers, or for any other kind of unhappiness...

***

some people turn every thing in their life into a sour event.
these are the people whose first thought is to hire a lawyer.
these are also the people who try to poison online forums...

-bowerbird

farquart's picture

...hey bowerbird...

(...Im editing this because you are not worth it....)

Ray Larabie's picture

"if you consider yourself a “mere” craftsman, sure, charge your hourly rate and be done... but if you’re an artist, well, what is art “worth”?"

does not compute

bowerbird's picture

farquart said:
> (...Im editing this because you are not worth it....)

that's amusing, in a wide variety of ways...

-bowerbird

bowerbird's picture

typodermic said:
> does not compute

in your reply above, you said this:
> How much they’ve budgeted for their work
> or how deep their pockets appear to be shouldn’t matter.
> Work is work: if you crank up the price based on
> what the client seems to be willing to pay . . . then I don’t like you.

well, that indicates to me that you would charge the exact same
to a cash-poor client as you charged a client with deep pockets.

it's ok with me if you do that.

but i also think it's fine to charge a deep-pockets client more...
especially when you know that the product of your labor will be
"used" in a much more far-reaching way, because of that client.

it also has something to do with the way you think of your work.

if it's a straightforward job, you charge a straightforward price.
this is what i call being a "craftsman", and that's very honorable.

if you consider what you do to be "art", which is _also_ honorable,
then you're certainly operating reasonably if you price it differently,
in my humble opinion. you can charge whatever the market will bear,
and that might have nothing to do with the number of hours spent...

in this case, both neil and the video-game company know that
his work will go in front of a very large number of people, and
they agree that his work will be owned -- exclusively -- by the
video-game company, so i think he is entirely justified charging
a rate that might be several multiples of his typical "hourly rate"...

-bowerbird

Bloodtype's picture

What's with all the underscoring?

bowerbird's picture

bloodtype said:
> What’s with all the underscoring?

it indicates emphasis in most light-markup systems.
(it's a convention that dates back to the usenet days.)

since most modern-day browsers are incapable of
retaining styling when text is copied out of them
-- please, actually try it before arguing with me --
i use the underscores so that my intent stays clear.

-bowerbird

p.s. if you're curious, safari and internet explorer
are the two browsers that i know that retain styling.

Ray Larabie's picture

I guess I gtt what you're saying but it still doesn't make much sense to me to quote a price that way. Fonts are (in my experience) commissioned to be used as tools. Tools to make headlines or hey, even art. Maybe some of them could be vanity pieces but I've never seen it. You brought up art but I'm specifically talking about font design: I don't know anything about art pricing.

I think clients deserve something better than a quote based on gut instinct about how I "feel" about the use of a font. I think it's unprofessional and similar to market vendors who size up their customers wallets and making up a price. That's what you can be if you like. If you're asking "what's your budget for this project?" you're no better than a weasley used car dealer, in my mind anyway. Yeah,k I'm judgmental about that kind of thing. If a store has no price tags, I'm out of there.

I price separate aspects of the job: work and licensing. When I sell fonts through a vendor, I don't charge more based on "far reaching" or artistic. A customer might be using it for a dog food label, album cover or a lost dog poster. I charge based on the number of users, just like MyFonts.com and other vendors. It's consistent and to me, consistent pricing is fair. If the fonts are going to be included with software or whatever, there's a custom contract involved and a system to deal with that. Often the licensing cost is higher than the work cost.

Licensing and work: two different things. Licensing doesn't affect the work cost.

Work is worth $X.
Licensing the font is worth $Y
If lawyers have to get involved in licensing details then of course, that has to be taken into consideration.

I charge the client $X+$Y

There is a "giant mega-company" extra charge but I'll get to that later. It has nothing to do with how deep their pockets are.

If the work is non-exclusive and it's only going to be used by 1-5 users, the extra charge for licensing is around the standard retail price. So for a single font for a single user, the licensing aspect might only crank up the cost by $20. Most clients want a site license for a custom font, so I adjust the licensing cost. If they're going to include it with software, they want to sell it, I factor that into the licensing cost.

I don't think this model would work for exclusive fonts, but I wouldn't know as I don't do exclusives.

"well, that indicates to me that you would charge the exact same to a cash-poor client as you charged a client with deep pockets. it’s ok with me if you do that."

Well, I would hope so. When a rich guy walks shops at Wal-Mart, they don't charge more. If Bill Gates wants to commission a font for a lost dog poster, I'm not going to charge him more. If you don't keep those costs separate, work and licencing, at least in your own mind when you're quoting, then you're not being professional, or ethical. It's a simplistic model; I'm sure other people have much more elaborate pricing systems. But, at the very least, the very least keep those two aspects separate.

But there is something to charging more for larger companies. The bigger they are, the longer they take to pay. Small-medium company: you get your check the next week. Big company: add 6 months at least. They also require reams of paperwork. You invoice, they want a work order. Then they want an invoice again. Then they want tax forms and it goes on and on. So, you can work for days just on the paperwork. With small companies it's usually just an invoice and check sent within a week of job completion. But this type of charge should be reasonable. It's not thousands of dollars of inconvenience to have to sign a ton of forms and wait for a check. Hundreds, sure but not thousands.

bowerbird's picture

typodermic said:
> I don’t think this model would work for exclusive fonts

i think that says it all.

because this is an exclusive font, to be owned by a company
that will put this font in front of millions of customers.

it's also interesting that i'm getting it from both sides...

terminaldesign said this:
> It could be quite a lucrative deal
> if it is negotiated correctly.

perhaps i'm not reading it entirely correctly, but
that sure seems like "soak the rich guy" to me...

the offsetting reality, of course, is that this is "work for hire",
and the video-game company will just go find someone else
to do the job if they decide that neil is getting overly greedy,
a decision that would reflect poorly on the kind person who
referred this plum to neil...

-bowerbird

neil summerour's picture

thanks for all of this feedback!

yes, it turned out to not be a quick question, but I love this type of back and forth.

let me process everything that has been said so far and I will weigh in

many thanks to all for the honest opinions and practical insight!

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