Monotype stock takes a tumble

Dave Crossland
Dave Crossland Posts: 1,429
in Type Business
http://www.benzinga.com/analyst-ratings/downgrades/15/05/5471306/jp-morgan-downgrades-monotype-imaging-holdings-to-underweig

Is the rate of profit falling for the consolidated publisher as well as authors?

Comments

  • Chris Lozos
    Chris Lozos Posts: 1,458
    A little rain must fall...
  • Jeremy Dooley
    Jeremy Dooley Posts: 67
    It's an analyst's opinion. They think it's over valued vis a vis other investments. The market agrees, right or wrong, reflected in the price.

    TYPE has a big portfolio, and includes a great deal besides font retail.

    It's like saying we start speculating about the longevity of Google fonts whenever goog drops a few points.
  • Dave Crossland
    Dave Crossland Posts: 1,429
    I agree that the stock price isn't all that relevant. Its just that seeing this reminded me of the proposition that the rate of profit for type design is falling. The high percentage discount deals. The globally exponentially increasing access to high quality type design education. The increasing productivity of Glyphs and RF Extensions... 

    TYPE has a big portfolio

    ..and capital consolidation, also a sign of a falling rate of profit.

  • LeMo aka PatternMan aka Frank E Blokland
    LeMo aka PatternMan aka Frank E Blokland Posts: 723
    edited May 2015
    Don’t blame it on the sunshine
    Don    ’t blame it on the moonlight
    Don    ’t blame it on the good times
    Blame it on the Google
  • Jeremy Dooley
    Jeremy Dooley Posts: 67
    You assume the market demand is not growing commensurate with supply. I think it is.

    TYPE will get it's 50 percent cut of the type market, regardless of the prices. Prices are irrelevant to them.

    Discounts are not a result of supply and demand. They are, imo, mostly a result of globalization and differentiation.

    3rd world nations are more willing to deal with the reduced profits. It's all gravy to them. New entrants from Latin America started the discounts, the market has to shift to match. The market, like the honey badger "don't care" if you live in Oslo or Sao Paulo.

    Recall how quickly prices dropped on the app store when it was introduced. A market price was set that was too low.

    It's far from the end of the world. If you knew what it was like in 2009, you would be thanking your lucky stars.

    That said, we are overdue for global market collapse, not just fonts.
  • Dave Crossland
    Dave Crossland Posts: 1,429
    Recall how quickly prices dropped on the app store when it was introduced. A market price was set that was too low.

    You mean you think Apple should have set the minimum price $10 not $1?
  • Jeremy Dooley
    Jeremy Dooley Posts: 67
    No. The laissez faire approach was best. The app designers acted stupidly.
  • Dave Crossland
    Dave Crossland Posts: 1,429
    No. The laissez faire approach was best. The app designers acted stupidly.

    I don't quite understand this... Capitalist competition naturally causes commodity prices to fall to the marginal cost, which for software is $0. They didn't act stupidly, they acted as they must do within capitalism.
  • DanRhatigan
    DanRhatigan Posts: 36
    “We ended the quarter with mixed results. While our Creative Professional business continued to drive strong, double-digit revenue growth, results were lower than expected in the embedded side of our OEM business, primarily printers. Overall revenue was flat, year over year,”
  • DanRhatigan
    DanRhatigan Posts: 36
    Ooops, forgot to source the data: http://ir.monotype.com/investor-relations/press-releases/press-release-details/2015/Monotype-Announces-First-Quarter-2015-Results/default.aspx
  • Michael Clark
    Michael Clark Posts: 138
    "I don't quite understand this... Capitalist competition naturally causes commodity prices to fall to the marginal cost, which for software is $0. They didn't act stupidly, they acted as they must do within capitalism."

    What????
  • Jeremy Dooley
    Jeremy Dooley Posts: 67
    The cost does not have to fall to the marginal cost. The price is ultimately determined by the creator who owns the property rights, if we lived in a world where creator's rights were actually in force, and we didn't live in a world where one of the world's largest tech company's business model is skimming the worlds intellectual property. There is scarcity here. The scarcity is creative human input.

    You assume that one font competes *directly* with another. They do not as long as they are not identical, but they do, indirectly.
  • Thomas Phinney
    Thomas Phinney Posts: 2,888
    He's assuming that the apps/fonts in question are a commodity—that is, not meaningfully differentiated. There is at least some differentiation, which is why the marginal costs of both are well above zero.

    Jeremy wrote: “You assume the market demand is not growing commensurate with supply. I think it is.”

    I'm sure that both demand and supply are growing remarkably well. What I am not sure about is whether one is outpacing the other. I think the fact that a lot of the growth in supply is coming from countries with lower costs of living and wage expectations is definitely a factor in downward pressure on font prices.

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