← The Economics of Everyday Things
The Economics of Everyday Things
74. Fonts
00:22:30
Behind almost every character you see displayed on a page or a screen, there’s a complex — and sometimes lucrative — web of licensing deals. Zachary Crockett is just your type.
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Jerry Leonidas
You spin over here.
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Zachary Crockett
Think for a moment about how many times you come across digital or printed words on any given morning. You check the messages on your phone, read the New York Times with your coffee, and pass by billboards on the freeway. You're probably paying more attention to what these words say than what they look like, but if you zero in, you'll notice that the things around you in daily life are written in a vast array of fonts. Those messages on your iPhone are coded in a modern sans serif typeface called San Francisco. That copy of the New York Times is set in the old school charm of Cheltenham and Georgia, and the billboards on your way to work might feature Futura or Ariel Black. Behind each and every one of these fonts, there are hundreds of little design choices made by someone like Lucas Sharp.
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Lucas Sharp
You look at some typefaces and it's like, dang, she's a brick house. It's like bam. You know, it's really in your face and very apparent. It's got attitude and flair and it's beautiful.
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Zachary Crockett
Sharp is a professional font designer. He's worked on more than 50 typefaces and he's done work for brands like Conde Nast, Samsung and Amazon.
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Lucas Sharp
It's mostly rhythm section, you know, most of those letters are playing the tambourine, but you can use those moments where things are a little more funky and curvy, like a double story lowercase g sometimes Every single letter is like a crazy guitar solo.
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Zachary Crockett
Fonts aren't just a form of artistic expression. They're a big business. There are more than a million fonts available on the Internet, and every year, designers license more than a billion dollars worth of them to marketing firms and publishers. But it's not an easy industry to make money in. A successful font has to be unique enough to stand out and familiar enough to be legible.
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Lucas Sharp
It's an art form. But on the other hand, we're also kind of selling drills here. We're selling a tool, and it's gotta be useful for people.
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Zachary Crockett
For the Freakonomics Radio Network, this is the economics of everyday things. I'm Zachary Crockett. Today, fonts. To understand fonts, you have to go back to the origins of written language. And that story begins in mesopotamia, back in 3100 BCE people will make marks.
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Jerry Leonidas
On clay tablets, but also parchment, papyrus, reeds, palm leaves, anything that is amenable to some sort of scratching or mark making and will be reasonably permanent.
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Zachary Crockett
Jerry Leonidas is a professor of typography at the University of Reading in the uk.
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Jerry Leonidas
As the letterforms become larger, they become more deliberate in their making, and they begin to separate from the forms that the tools themselves determine.
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Zachary Crockett
In the centuries that followed, writing with ink on paper became more common and certain styles of handwriting emerged. By the Middle Ages, many scribes were writing in a form called black letter, which featured angular lines and thick strokes. It's what you'd imagine seeing on a medieval scroll. And when Johannes Gutenberg invented his version of the printing Press in the mid-1400s, which made it possible to reproduce text at scale, the first official font was born. It was called Donatus calendar, and it mimicked the handwriting of the time. As the printing industry grew, so did different styles of text.
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Jerry Leonidas
What we see is the rise of a class of professionals who make typefaces. They're selling always to printing presses. The French king might order a typeface for his printing house to reflect the glories of the empire. Or they might be doing typefaces for smaller editions for the gradually growing literate community.
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Zachary Crockett
Up to this point, letters would be cast on small metal blocks called sorts. Employees at the printing press would manually assemble them into words, sentences, and entire pages of text. These would be dipped in ink and stamped onto paper. If you wanted to change a font or its size, you'd have to swap it out by hand. In the 19th and early 20th centuries, new technologies came along that mechanized this process, making it easier to experiment with different fonts. One favorite that emerged from this era was Times New Roman. It was commissioned by the British newspaper the Times in the early 1930s, and not too long after that it was made available for other uses and it became a mainstay in publications around the world. But the real revolution in the font industry came with the rise of personal computers. A series of technological advancements starting in the 1960s culminated in software programs that allowed people to design fonts using pixels older typeface libraries from the printing press days digitized by vjooqic theory.
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Jerry Leonidas
This is the key innovation that completely transforms the type world. The risk for entry into the market completely collapses. And whereas before you needed an entire industrial environment around you so that you would get the investment to make all the proprietary equipment to produce the letter from G design, now you just buy a Macintosh computer and license a copy of Photographer and you can make typefaces.
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Zachary Crockett
Now we should say here, a typeface is the name for a collection of fonts like Arial. And a font is one specific variation within the collection, say Arial Light or Arial Bold. Today, there's a robust demand for different typefaces and fonts. Businesses use them in logos, the publishing industry uses them for websites and books, and graphic designers use them on everything from packaging to annual reports. There are plenty of familiar, widely used fonts available for purchase. But when professionals need a custom font for a project, they often turn to a company like SharpType. It's one of thousands of boutique foundries, firms that specialize in designing and licensing typefaces. It was co Founded in 2015 by type director Lucas Sharp and his wife Jantra Malee, who serves as CEO.
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Jantra Malee
Since we started, the strategy was we would have our workhorses in our library and then we would have our window pieces we would call them. You want to get people in the door with these really display oriented typefaces that might not be so practical to use on an everyday basis.
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Zachary Crockett
Workhorse fonts are clean, easy to read, and can be used for many different purposes. The window pieces are a little more conceptual, good for showing off a foundry's artistic flair and design capabilities. In total, SharpType has around 50 typefaces with names like Ghost, Carta Nueva, Octave and Respira. Each of these sets contains multiple weights and styles for different uses.
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Lucas Sharp
When you get to a certain size and are kind of established like us, you end up with maybe three, four, five typefaces that are making, you know, like 80% of your income.
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Zachary Crockett
Sharp's most widely used typeface is Sharp Grotesque.
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Lucas Sharp
It's like a perfect, subtle, you know, geometric typeface that works for everything so beautifully. Those kind of typefaces, you have to really spend time with it before you can appreciate it. It's not something that's going to get like a thousand likes on Instagram right away.
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Zachary Crockett
Sharp gets paid when people license these typefaces.
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Lucas Sharp
So fonts are really interesting because it falls into the category of software, but it's not like a computer game where it being on my computer is kind of the sum total of the value that I need to compensate to owner for.
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Zachary Crockett
Most foundries offer a few different tiers for their licenses, and it works on a sliding scale based on what the intended uses are. Take for instance Sharptype's Ghost typeface. If you're just using a single font on your desktop, you can pay a one time $60 fee. But if you're a small business buying it to install on 200 computers, that goes up to around $2,000. If you would like to use it on the web, you'll have to pay anywhere from 60 to $900 a year, depending on how many page views you have. And if you want to use it in an app, it's another 60 to $360 per year based on registered downloads.
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Lucas Sharp
The way you make money in this game is basically you have a license that kind of gets people's foot in the door. You don't want to be too restrictive for the average Joe graphic designer who wants to use it to do something basic like a poster for an event or a wedding invitation. But we also want to make sure that the license is restrictive enough to where they can't just use it in some crazy capacity in some huge campaign.
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Zachary Crockett
Sharptype learned this the hard way.
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Lucas Sharp
We had a big restaurant chain, they bought a $50 license on our website and it ended up in a Super bowl commercial. And we were like, oh, I guess we need to do some more restrictions on our license.
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Zachary Crockett
These licenses bring in nice recurring income for font designers. But there's another side to the business that can be more designing and selling custom fonts. If you're a big company that needs to disseminate a font to thousands of employees, or a TV network that has to broadcast text graphics to millions of viewers each night, you don't want to pay for expensive ongoing licenses. You want your own unique font, either one that's designed from scratch or a specially made variation of one that already exists.
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Jantra Malee
There's a lot of companies that have come to us who want to use an existing typeface, but they want to customize it so that there's some visual ownership for their brand. Those are negotiated directly with the client versus just ad hoc Adding to cart on our website A few years ago.
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Zachary Crockett
The cloud storage company Dropbox hired Sharptype to make a custom version of their font Sharp Grotesque.
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Jantra Malee
So they actually used it in all of their ads, television print on their website. When you log in, they're using it, it's on their app. It's fully ingrained in the entire business.
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Zachary Crockett
For custom jobs, Sharp usually offers a mutual ownership model. The foundry retains the copyrights on the font, but the client gets exclusive rights to use it for a set period, and they cost substantially more than your basic desktop license. A TypeFace family containing four font styles might run from 100,000 to $250,000 or more. A more robust product that's custom built from scratch can be in the millions. That kind of deal is a big part of the business model for boutique foundries like sharptype. And that's largely because the more commonplace licensing deals are dominated by one giant company, Monotype.
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Lucas Sharp
They are like gatekeepers that have the keys to all the big platforms. They're the private equity behemoth that's been gobbling everything up.
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Zachary Crockett
That's coming up.
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Zachary Crockett
The Economics of Everyday Things is sponsored by Fundrise. Right now, high interest rates have crushed the real estate market. Prices are falling and properties are available at a discount. Which means fundrise believes now is the time to expand the Fundrise Flagship Fund's billion dollar real estate portfolio. You can add the Fundrise Flagship Fund to your portfolio in minutes by visiting fundrise.comeconomics that's f u n d r I s e.com economics carefully consider the investment objectives, risks, charges and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus@fundrise.com flagship. This is a paid advertisement if you spend time searching for fonts on the Internet, it won't be long before you come across a company called Monotype. It was founded in 1887 during the rise of mechanical typesetting and became a leading provider of machinery for printing presses. In the following decades, it developed a number of popular fonts, including Times New Roman, and when computers revolutionized the industry, it reinvented itself as a digital typeface titan. Monotype aggressively bought out a number of large competing foundries and in 2019 was acquired by a private equity firm for $825 million. Today, Monotype owns thousands of fonts, not just Times New Roman, but other classics like Helvetica, Avenir and Arial. And perhaps even more importantly, it owns a website called myfonts.com it is literally like a supermarket.
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Jerry Leonidas
There's everything in there.
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Zachary Crockett
Again, that's typeface historian Jerry Leonidas. He compares the website to a supermarket because it's sort of a one stop shop for fonts. On MyFonts, prospective clients can browse through more than 300,000 fonts from 4,500 different foundries all over the world.
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Jerry Leonidas
What they're selling is large choice and a very well established distribution network.
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Zachary Crockett
If you're a foundry that sells through MyFonts, you set your price and Monotype will handle all of the sales and licensing. In return, they take a 50% cut of your revenue.
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Jerry Leonidas
Licensing is sort of the black sheep in the Typewold because there isn't enough consistency in the licensing model. So if I'm a publisher and I do a deal with my fonts, then I might have a smoother licensing experience.
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Zachary Crockett
The underlying intellectual property of a font is actually the software used to code it, not the design itself. And companies that use fonts without proper licensing often get embroiled in legal issues. In 2017, the candy company Haribo was sued for $150,000 after using an unlicensed font on one of its wrappers. It joined a long list of other accused font infringers, including Nike, Volvo and the musician Cherished. She allegedly knocked off a famous designer's font on the COVID of her 2013 album Closer to Truth. Cher's case was dismissed, but several of the other accused parties had to settle out of court. Sometimes Even companies that secure licenses get in trouble. NBC Universal has been sued at least three times for using fonts in ways not covered by the license. Most notably for allegedly printing a font on Harry Potter merchandise like pillows and hats, when they only had the digital rights. Navigating the legal landscape of fonts is tough for foundries and customers alike. And MyFonts isn't the only company in the business of streamlining licensing deals.
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Lucas Zarnicki
My name is Lucas Zarnicki and my title is Creative Director.
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Zachary Crockett
Tsarnicki works for a company called Type Network. It helps more than 100 foundries sell more than 18,000 different fonts.
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Lucas Zarnicki
Let's say you have your Freakonomics font. We'll put it on the website, put it in social media, email, newsletter, that kind of thing. Fast forward a few months. We get a phone call or an email from IBM or some other company that's interested in using it. Then my colleagues and I will speak with them, find out what they're planning to use it for. We'll negotiate on your behalf to make sure that you get the best price possible. We'll do the deal, sign any agreements, and then every quarter send you your big royalty check.
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Zachary Crockett
One of the holy grails in the font world is getting a deal to include a font in a widely available word processor. Take Microsoft Word. Some of the fonts that come preloaded in the program are owned by Microsoft itself. Their popular font Calibri, for instance, was purchased from a Dutch typeface designer named Lucas de Groot. He was reportedly paid just enough to cover a few office renovations in his home. But others are owned by Monotype. And a long time ago, Microsoft likely paid large one time fees for non exclusive perpetual rights to use them.
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Lucas Zarnicki
Companies where their users can access and use the fonts they're not interested in, term licenses that could end after one, three, five or 10 years because they need complete and total backwards compatibility for their users work. So you can't open a word document in 10 years that you made today and have it break. The fonts have to work.
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Zachary Crockett
How much do you think Microsoft paid for Times New Roman?
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Lucas Zarnicki
So if they were to do that afresh today, it would be no doubt millions of dollars. And in fact, I would nearly guarantee that neither Monotype nor most distributors would be interested in a permanent license of that kind. In fact, they would almost certainly say, you know, we want X number of millions per year.
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Zachary Crockett
The foundries that manage to get into a popular program like Microsoft Word often see benefits that extend well beyond the licensing deal.
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Lucas Zarnicki
Let's say for example, Agency fb, which is an old font, so that was added to Office a long time ago, but you could still go and license it as an individual or as a company. And existing in Office was the best advertisement that that typeface could ever get, because people used it in their documents and then said, we want to license this font for other usage.
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Zachary Crockett
Microsoft's fonts are proprietary. You can use them with a Microsoft Office license or license them separately. Google has also designed and commissioned a large catalog of typefaces, but it offers them for free through its web apps. One Google font, Roboto, is among the most widely used fonts in America. It's been used as the default font on the Android operating system and on the website for the United Nations. The company makes it available to anyone without a license.
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Lucas Zarnicki
Google has done a great thing by doing that. A number of people in the type industry are supported by the open approach that Google takes.
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Zachary Crockett
Free fonts are especially valuable when you consider how much work goes into creating one of them, Zarnicki says. It's a lot harder than meets the eye.
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Lucas Zarnicki
Let's take the lowercase e. It has to look like a lowercase e, but it can't look exactly like any other lowercase e that's ever been made. And then once you finish that, you have to do the same thing with the h and the o and the p and the a and the q and every other letter and number and piece of punctuation. That's just for the regular style. You have to add italic. When you do italic, some of the forms completely change. A changes, e changes, G changes, etc.
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Zachary Crockett
A typeface might include many different font bold, medium, light, thin. And there are a myriad of smaller details to consider. Each letter or glyph has a complex anatomy. Arms, legs, tails, eyes, ears, spines, and shoulders. There are endless iterations of the crossbar, that horizontal line on a capital A, or the tittle, that little dot on the lowercase I.
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Lucas Zarnicki
Now let's say you've been able to walk that fine line for all of those glyphs and you've managed to make them interesting. Then there's the added question of do they look good together as a coherent system? It is closer to architecture in that the entirety of the system needs to work well, and every constituent part needs to support the rest around it.
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Zachary Crockett
This whole process might take anywhere from a few months to a few years. But if a typeface designer reliably creates hit fonts, the rewards can go beyond licensing deals or even six figure custom jobs. Earlier this year, Lucas Sharp and John Schrem Ali got the ultimate payout. They sold around half their font library to monotype.
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Lucas Sharp
It didn't really make sense to me when they first approached me because we weren't ready to retire, but you know, it was a way to get really well compensated and to be able to just focus on doing what we really love, which is to just draw cool new stuff. Telling a story with each typeface is the exciting part. It's not continuing to build out and maintain and sell the same, you know, geometric San serif forever.
- [24:24]
Zachary Crockett
For the economics of Everyday things hi, I'm Zachary Crockett. This episode was produced by me and Sarah Lilly and mixed by Jeremy Johnston. We had help from Dalvin Abawaji and Daniel Moritz Rabson, and thanks to our listener Logan Granger who suggested this topic. If you've got an idea, our inbox is always open. It's everydaythingsreakonomics.com as always, thanks for listening to this little show of we'll catch you next week.
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Lucas Zarnicki
In school I petitioned and asked each of my teachers if they would mind that I use some other typeface. And I remember in several of my classes being able to use 10 point Caslon instead of 12 point times new Roman.
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