Pricing Server Licenses

Fontfruits

I'm keen to hear all the opinions on how you think Server Licenses should be priced and handled. Especially since these types of licenses seem to be on the upswing.

I'm referencing them for when specifically when used on, for example, a popular website that creates personalized items like wedding invites, mugs,merch etc using the font - where the customer can type with the font whatever they want on the item to see how it looks, then click buy.

On research, some seem to price per Server size, some are priced per monthly users/customers , and others are priced per 10 000 products made available.

The length also varies from perpetual to annual to per mass quantity. And how would you go about checking these stipulations and limitations once the licnese is in use? Do you send them an email every year, to every customer? And in situtations where you can't tell how many items they are really selling - do you audit them or what? How do you keep on top of them and their enforcement? Or is it blind trust?

I'm also ESPECIALLY keen to hear if you think it's a good idea to allow other font vendors to handle these particular licenses for you ( like myfonts ,fontspring etc) - where you cannot necessarily see who bought what when - to check up on the annual validity if thats the option. 

Just throw it all in here   I'm all ears!

Oliver Weiss (Walden Font Co.)

I'd be interested in this as well. I have no idea how you would check usage. 

John Hudson

It’s not something our standard license agreement covers. We classify it as an externally accessed server (as distinct from a server accessed only by employees or contractors of the license holder, which is covered in the standard license), and at the moment it is something that would require an individually negotiated agreement and, frankly, I can’t imagine any company actually accepting what I would be inclined to charge. The business model of such online typesetting services is at odds with the value of individual typefaces, since what matters to the company running such a service is an attractive availabiity of a lot of nice typefaces, rather than the availability of a specific typeface, while the person using such a service will choose a specific typeface but within a service that doesn’t require them to pay full price for the license of that typeface. Put another way, such services constitute a virtual typesetting machine, and as in the days of hot metal, the machine rather than the individual typeface is the primary value in the business model. So companies offering such services want as many fonts as possible at the lowest price possible, while I, in pricing such a license, would be considering the potential number of uses. I think the only way to reconcile the two is to do what Adobe have font in their CC subscription model, and have foundries receive royalties based on usage of the specific fonts, rather than an upfront license fee.

Florian Pircher

@John Hudson your description sounds similar to licensing for bundling with an operating system, which is something that Tiro is doing. What differentiates an OS vendor and an online typesetter regarding the licensing model?

jeremy tribby

Not a server license per se, but some foundries offer an "OEM" type of license for things where they can't measure usage and so assume it is unlimited and perpetual. It's expensive (I've seen this priced pretty close to custom work), but larger companies sometimes have a budget for that sort of thing.

John Hudson

your description sounds similar to licensing for bundling with an operating system, which is something that Tiro is doing. What differentiates an OS vendor and an online typesetter regarding the licensing model?

Not a lot. Bundling licenses are also individually negotiated and not covered in our standard EULA. As you suggest—and as my reference to Adobe’s CC model also indicates—, distributing fonts and distributing use of fonts are very similar. The difference is that bundling agreements are usually pretty open-ended for the licensee—a company like Apple will want the right to distribute any number of copies of a font with any number of their products or services—while distributed use is potentially something that can actually be tracked and, therefore, charged on a per use basis.

Miles Newlyn

When negotiating this kind of license I discount for bundles of styles from our library. It's one of the few opportunities to up-sell your complete library, or at least a few different typefaces.

I would never let a reseller/vendor to negotiate this for me.

John Hudson

Another difference between bundling distribution and externally accessed server licensing is that the former tends to be perpetual—a company like Apple or Microsoft needs to ensure that they can continue to support existing documents in future versions of their software—, while the latter could be a time-limited, renewable agreement, and one which either party could cancel under conditions to be specified in the agreement.

JoyceKetterer

I issue licenses for this kind of use but I do not call them server licenses.   Honestly, I think the term is worse than non-sensical.  It has nothing to do with the nature of the use and customers who've not heard of it before are confused by it. 

That said, I'm no purist.  We permit product use generally so I'm pragmatic about on-demand product printing. I price this kind of use as a web app (for which we use our web embedding license and our application embedding pricing) but then mark it up using a case by case multiplier to accommodate the on-demand sale of printed products.  All embedding licenses with us require annual reporting (and yes, I have to email each client but it's not that bad, I often get additional sales by reminding them we exist.  I tried automated emails but too many went into spam).

With regards to letting others handle the more complicated licensing for you, I assume you mean monotype?  Even if not, I'm against it. You don't want it to be possible for the same fonts to be licensed under different terms (by which I mean the meaty core terms that effect how violations are handled).  It can be a mess.