nosimile @nosimile - Twitter Profile

NOSIMILE retweeted

almost 3 years ago

Some thoughts on Monotype’s $4 billion valuation and upcoming sale at auction. Buyout firm HGGC is exploring a sale of Monotype Imaging Holdings Inc. that could value the typeface firm at more than $4 billion, including debt, according to Bloomberg News. This is a massive overvaluation in my opinion as someone familiar with the industry. Several emerging trends and technologies pose a significant threat to Monotype’s core business model: owning font IP, creating and enforcing artificial scarcity around font software, and taking an exorbitantly high percentage of royalties from designers in exchange for distribution. The way proprietary fonts are licensed is complex, confusing, restrictive and user/consumer hostile. The font industry is increasingly shaking down font users for not complying with their complex EULAs. This often resembles the copyright troll business model, where lawyers demand money from people who know that proving their innocence would cost even more. Proprietary fonts are basically a terrible experience from a user/consumer perspective and Monotype has already alienated a vast portion of its potential customer base. The aggressive shake downs will probably intensify if Monotype is sold at a high valuation, which will further alienate customers. At the same time the last decade has seen an explosion in high-quality open source fonts. Typefaces like Inter have already become canonized staples of the design industry. The open source font ecosystem is still in its infancy, but the ability to fork open source font designs instead of starting from scratch, new business and patronage models for open source, and the emergence of AI type design tools that could drastically reduce the amount of labor required to make high-quality fonts all lead me to believe that the open source font ecosystem will grow exponentially in the next few decades. With such abundant free resources, the value proposition of proprietary font providers diminishes. There are also cultural trends that are working against Monotypes’s business model. Due to AI and internet culture, the contemporary art and design world is increasingly veering towards post-authorship, a concept where art is memetic and boundaries blur between creators and consumers. In such a landscape, Monotype’s business model, which hinges on strict IP rights and prohibiting remixing and forking, appears outdated and inflexible. Monotype’s marketing and brand reflect a philistine corporate mindset over a genuine appreciation of artistry and culture. This approach has not only alienated creators but has also diluted the value of the intellectual property they hold. For example, Monotype’s tight control over the Helvetica intellectual property works against the egalitarian modernist ideals that made people love Helvetica in the first place. Open source fonts like Inter have replaced Helvetica as the default sans serif font for designers because of its less restrictive licensing and the authentic and internet native way the font is promoted by its creator. If I had $4 Billion to invest in the font industry, this is what I would do instead of buying Monotype: Put $1 billion into automating type design with AI, think ChatGPT that you prompt with text and images and get high quality fonts and modifiable source files as output, charge $20-40 a month for it. Put $1 billion into making an open source font distribution and curation service like Google Fonts that has a monetization system for all creators on the platform instead of commissioning fonts, and stricter curation and quality control. This would create a positive feedback loop where the AI tool makes it easier to make high quality open source fonts, and the monetization system for designers incentivizes high quality open source font projects the AI can train on. Put $1 billion in BTC, ETH, & SOL. Use profits for patronage of global open source type design projects. Put $1 billion into the $PEPE meme coin. Frogs over dogs, $1 is programmed. This would honestly be a less risky investment than buying Monotype. I 100% guarantee this would have a better ROI both financially and culturally vs buying Monotype at $4 billion.

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