Why does a font’s price depend on usage?

Alex Visi

I’m curious about why are font licenses so complicated?
I mean, a smart phone’s price doesn’t depend on the amount of calls; a car’s price doesn’t depend on how far you’re going to go. So why does a font’s price depend on usage? Does it mean that foundries don’t earn enough by selling it for a constant price? I don’t believe it’s done for customers… Or am I being too sceptical?

Bhikkhu Pesala

Fonts are software, not hardware. A lot of freeware has a license condition such as "Free for non-commercial use," but requires a license for commercial use. 

Ray Larabie

Usage pricing makes fonts more affordable. Let's say I only provide a single tier application license. That same price serves a AAA game company using the font as main element in a $50 million game as well as a small team indie title. Similarly with web fonts: major news site vs. local flower shop. The price of one of my lowest tier app license is around $50 and unlimited for about $500. If I were to choose a middle ground and have one type of license, it would still end up around $250 which would be too expensive for most indie game budgets. That's the reason I have multiple tiers but other font companies might have their own reasons for doing it.

Dave Crossland

Alex, I suggest you read a good book on capitalism.

John Hudson

a smart phone’s price doesn’t depend on the amount of calls

No, but the price of the usage package does, typically expressed in terms of minutes, texts, and data limits per month.

Desktop font licenses are not typically linked to usage, but webfont and app embedding may be. The pricing hopes to reflect the potential value derived by the customer.

Nick Shinn

If you want to compare digital fonts with good old real products, consider that those are often “cheaper by the dozen”—pretty much the same principle, which Dave alluded to, i.e. that scaling up reduces per unit price.

So, if you buy cars or phones for 100 users, you can get a much better per unit price than buying them individually.

And if you really want to get value for money, consider that with a single, minimum font licence, billions of words can be set and read (by people who are also users) in perpetuity, and the font never wears out!
  

Scott-Martin Kosofsky

Another parallel to use-rate charge for fonts is the way automobiles are leased. Auto lease contracts are based on a balance of the term of vehicle use (in years and months), average distance traveled in the course of a year, and the projected residual value of the car at the end of the term. Leases with lower distance allowances cost less than those with higher distance allowances, because the car’s residual value (that is, as a used car) is influenced greatly by the odometer reading at the end of the term. If you travel more than the allowed distance, you have to pay a surcharge.

In a number of ways, fonts, like other software, are leased, not sold outright, but what’s missing from the scheme is any notion of residual value. That’s too bad for people who make fonts, because what the car finance companies (most often a company owned by the manufacturer) can do that the font makers cannot is sell used fonts or, even more importantly, bundle together the residual value of many used fonts and sell them as the basis for securities (bonds) or use them for collateral. If some clever person could figure out a way to do this, the income of type founders would go up exponentially. The missing piece that needs to be invented is a "used font" that would be sold for far less than the initial price, but with more restricted licenses. "Used fonts" could be sold, for example, for tryout use.

I know this sounds ridiculous on the surface, but those of you with some knowledge of the securities market know that there are far more ridiculous kinds of securities being sold every day, all over the world. Imagine this: Members of ATypI arguing about the underlying causes of the Great Font Market Crash of 2029 that brought down the world economy.