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Monotype New Contract ...Subscription Model, do the scary maths.
Fontfruits
Posts: 51
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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Comments
In short... the last phase of partnership with Monotype would be giving away fonts for free.
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:
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.
They have been going hard with the shift towards subscription models in font distribution for awhile now. Honestly, I'm not convinced they're all that great for font foundries. Just look at how things turned out for musicians with Spotify – doesn't seem like a winning deal to me.
Why do font creators still gravitate towards these platforms, despite the obvious frustrations and downsides? There are plenty of other outlets with way better terms for distribution. It's worth thinking about.
The reason being that Adobe CC already had millions of subscribers even before adding in font library access for desktop use. Almost every professional designer uses Adobe apps and therefore had to go along with Adobe's subscription model. As a participating foundry, you suddenly had access to Adobe's entire user base. The revenue per user was tiny compared to the traditional direct license sales, but the number of users was many magnitudes larger.
Monotype, on the other hand, doesn't have this gigantic user base. They've got to build it from scratch by convincing their existing customers to switch to their subscription service. Plus, although Monotype has a large customer base, but it's probably much smaller than Adobe's user base.
Adobe Fonts has been one of my biggest sources of income, going back to the Typekit days, as was Monotype selling licenses directly. I could be wrong, but I think it's going to be a long time—if ever—before revenue from Monotype's subscription service rivals Adobe Fonts for foundries. It's not starting from the same point.
There are differences of course in the way the payouts are calculated between the two which may have a bearing on my assumptions, but in general this is how it looks to me.