Question Re: Pricing Structure for Exclusive Licensing on a Custom Typeface Design?

Hello folks!

This is my first post here, so hopefully I'm in the correct sub. If not, mods, please let me know and I'll move it along. After doing a few searches I wasn't able to find quite what it is I'm trying to figure out, so here goes:

I'm trying to price out my first custom display face for a potential client. I've figured out what I believe to be a fair baseline price for time/labor, and now I would like to include a pricing structure for varying levels of exclusivity of use. Would it be wise to do so by percentages of the final fee? For example:

Non-exclusive license: 100%
1 Year Exclusive license: 125%
3 Year Exclusive license: 150%
5 Year Exclusive license: 175%
License in Perpetuity: 200%
Full Rights Buyout: 300%

Does something like this make sense? I'm rather new to the concept of licensing—especially with type—and would love to keep it fair for both parties. Any advice would be massively appreciated!

—AE

Comments

  • James PuckettJames Puckett Posts: 1,421
    It’s important to consider the retail value of a typeface when pricing the rights. If someone wants to you crank out one more knockoff of Gotham or Frutiger, or to revive a set of quirky historical letters, it’s best to just get paid up front and not plan on making much money from retail sales.
  • It’s important to consider the retail value of a typeface when pricing the rights. If someone wants to you crank out one more knockoff of Gotham or Frutiger, or to revive a set of quirky historical letters, it’s best to just get paid up front and not plan on making much money from retail sales.
    Fair point, James; thanks for the insight. I'm pricing out 3 separate projects, all based on the original painted wayfinding throughout an historic stadium, so you're spot-on.  I'll let you know how it goes. Hope you're well!

  • SiDaniels said:
    As a customer for custom type I might prefer to see the "full rights" price (your 300%) up front, with the other options positioned as discounts for less rights.
    This makes more sense . . . good call, and thank you for the reply!
  • You could always suggest a yearly fee for continued exclusivity.

  • Thierry BlancpainThierry Blancpain Posts: 152
    edited March 2016
    Thanks @JoyceKetterer, interesting ideas to think about! And welcome to TypeDrawers!

    Our custom pricing also consists of type design + licensing + exclusivity, with exclusivity cost as a multiple of the design work. We’re not the youngest foundry but definitely not the most established. We started out with slightly lower hourlies, which lead to lower type design + exclusivity cost, but licensing was always the same (as our retail licensing).

    I think we benefited from the fact that we’re in Switzerland, so our labor cost will never be lower than someone from Berlin, Portugal, or Argentina, anyway. The only thing we can do is offer good quality for the price we ask for :)
  • Ray LarabieRay Larabie Posts: 624
    edited March 2016
    I tell clients I don't do exclusive and the conversation comes around to "I guess we don't need exclusivity anyway". I've turned down some clients who's only interest was having an exclusive font. When the intended purpose of the font is to be exclusive, I'm out.
  • What's your objection to doing exclusive typefaces, Ray?
  • Anthony ElderAnthony Elder Posts: 4
    edited March 2016
    Thanks so much for the insightful replies @JoyceKetterer and @Thierry Blancpain
  • Ray LarabieRay Larabie Posts: 624
    @Max Phillips 
    You never really know what the next hit will be and the majority of my best sellers were non exclusive commission jobs. I can look at the long term sales on some of those fonts and some of them are 20 times the commission price. It's a gamble; some of them flop but I never know which ones. It's usually the opposite of the ones I think will succeed.

    For branding, I've explained to clients how exclusivity has in the past, encouraged freeware knockoffs. I don't know if that's still a thing these days. Let's say a custom typeface is commissioned for a video game franchise. The availability of a font on pay sites, discourages the creation of a free knockoff. It won't stop knockoffs of Batman or Harry Potter but something like Mass Effect would probably have a bunch of knockoff free fonts if I hadn't insisted on keeping it non-exclusive. I don't know if that "scene" exists anymore so I stopped bringing that aspect up with clients.
  • SiDanielsSiDaniels Posts: 217
    Also if you produce a design in the future similar to the "exclusive" design the client may come back and give you a hard time, or worse.
  • Nick ShinnNick Shinn Posts: 1,139
    The last two custom jobs I’ve done were single weight “similar to” designs. The thought of developing them into retail products fills me with horror so, those were only ever going to be perpetually exclusive for the clients, and that’s how I quoted.
  • @Nick Shinn We've had jobs like that too.  Politically, we just stick to the same rules even so because it's easier to tell everyone that we simply have standard we always stick to and that's that.

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