Monotype New Contract ...Subscription Model, do the scary maths.

Fontfruits

If I am wrong - please feel free to correct me, I really hope someone does - hopefully Monotype is reading this : 

From what I have read and understood off the Monotype website, in the new Monotype Agreement, you automatically give Monotype the right to give all of its paying subscribers a Desktop font to all your fonts included in the subscription for FREE. 

You, personally, will not earn ANY desktop royalties via the subscription service, despite the fact users will be using your fonts with Desktop Rights.

This is off their own website : 

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That means : Royalties from the Monotype subscription service only start getting tallied when the subscriber needs to use the font as a ‘production font’ ( see screenshot at end off their website for production font definition)

SO if the user ever only uses the font for desktop purposes, you won’t earn a cent. 

And about what royalties you DO get : 

Looking at the subscription model off their website( see screenshot at end for formula equation off their website) , I did the maths on two scenarios - 

Scenario 1 :  how much you make if a user buys your Web font off MyFonts, and 

Scenario 2 : how much you make (at best) if a user ‘activates’ that same font through their monotype subscription. ( which they pay Monotype $600.00 a year for)

Scenario 1( production font use - web)  :

User buys a yearly webfont license off myfonts.com, for one font , for 1million page views. The price is $350.00 for 1 year. I get 50% of that = $175.00 Royalties for that year for that font.

Scenario 2 ( Production font use web and or epub and desktop if needed) :

User buys a yearly subscription to Monotypefonts, for $600.00 and I use the equation you can find on Monotypes website (screenshot at end)  And this is what I get : 

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( just assuming now we are calculating for this transaction /1 subscription only) 

Variable 1 :  FOUNDRY'S % of ALL SYNCS( IN THIS CASE) ON MONOTYPE 

User tests out and activates ( ‘syncs’) 100 fonts from Monotype fonts to test. 

Of those 100, one of ‘your’ fonts looks good and it is activated ( 1 Sync)  by user. 

-> Plug into equation : syncs percent = 1 out of 100, or 1% or 0.01

Variable 2 :  FOUNDRY'S % of PRODUCTION FONTS USED ( IN THIS CASE)  ON MONOTYPE 

User gets to activate another 2 fonts according to subscription, and does so. But they are from another foundry.

-> Plug into equation my font totals 30% of fonts chosen ( ‘named’) = 0.3 

Variable 2 :  FOUNDRY'S % of ALL E-COMMERCE REVENUE ( IN THIS CASE)  ON MONOTYPE 

E-commerce revenue = 0 ( in their webinar they mention e-commerce revenue is totally separate from the subscription revenue so I don’t know what this is exactly, but lets assume 0 unless someone comes on here to argue)

-> Plug into equation e-commerce : 0% ( I'm looking for a correction here please ) 

Now we calculate the average according to their formula : 

0.01 + 0.3 + 0 = 0.31 = 31%

The foundries official ‘contribution percentage’ is 31%.

NOW to work out the revenue : 

$600 x 0.31 = $186.00 net sales.

Foundry Contribution percentage times foundry’s royalty rate :  $186.00 x 0.25 = $46.00 per year.

The revenue  in this case, is $46.00 per year for that webfont/production font use

That is ONLY of the user doesn’t swap out the font halfway through the year. 

Then you would only get $23.00 per year. PLUS, the user gets a desktop License free.

The epub use also comes with this subscription, so you wouldn’t get royalties for that either if both were used in this ‘ production scenario’ 

Um, thanks but no thanks.

This model is also used using the individual plan. As you go up to the team plans, so does your percentages get even more dwindled 

If I have made any miscalculations/misinterpretations here, - please feel free to interject (That’s you Monotype) . 

Screenshots : 
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Dusan Jelesijevic

Removed by me as it was off topic by my judgment.

In short... the last phase of partnership with Monotype would be giving away fonts for free.

Nadine Chahine

The math is wrong as the syncs they count against is all syncs by all customers and that is one factor they do take in. They also take in the number of named desktop fonts (production fonts) as a percentage of all production fonts, and the percentage of a foundry revenue as a percentage of all revenue. This heavily favours large foundry libraries that will get lots of syncs (like Monotype's)

The biggest red flag I can see is:
This royalty model doesn't seem to count the cost of web font licenses and digital ads that they give away as part of the subscription. For example, their Enterprise license only allows 5 production fonts but up to 20 million page views. 

So one can imagine a scenario where a client pays $20,500/year and the foundry only gets revenue out of 5 production fonts which will be super small in relation to total number of production fonts employed by all customers using Monotype fonts but their fonts would be on a 20 million page views usage. 

I'm really hoping I misunderstood. Here is the screen grab:

DiegoSouza

I'm getting into this world so sorry for my mistakes and things that i possibly say that i might be actually wrong. Well, when they say "monotype" library that's kinda of a legal hole, as i undestand, monotype doesn't own (and i hope that never will) the rights of your typeface, don't matter if they are the intelectual property or the name etc... the unique thing that they have is a non-exclusive right to distribute your font, so as i understand "monotype" library is literally the monotype library plus some foundries picked by hand, note that myfonts website explicitally says that they have 230.000+ fonts available and the montly subscription only covers 40.000+. So technically smaller foundries might not be automatically included in their deal. 

Fontfruits

DiegoSouza said:

the unique thing that they have is a non-exclusive right to distribute your font, so as i understand "monotype" library is literally the monotype library plus some foundries picked by hand, note that myfonts website explicitally says that they have 230.000+ fonts available and the montly subscription only covers 40.000+. So technically smaller foundries might not be automatically included in their deal. 

The new agreement you have to sign apparently gives them full rights to put your existing myfonts fonts on to their Monotype Library Platform. 

Nadine Chahine

They also have the right to modify your fonts, and sell enterprise and OEM licenses. And if what I heard about the new contract is correct, they allegedly have the right to sign distribution contracts on your behalf, an exclusive right to pursue illegal use of your fonts on your behalf (you keep that right too but only through your own direct action), and to sue you for damages if you don't give them your full library or other rights they have decided are important to them. 

You can decide of course that all this is good, but typically when you ask for more "things" from a foundry, you give them a higher percentage rather than force them onto half the royalty rate with a questionable royalty calculation method.