One big cloud, photographed by Mårten Sjöbeck

The Cloud Shift

Over the past few years as a type designer, I’ve noticed significant changes in the design industry. Everything is moving to the cloud, a.k.a. someone else’s computer, and subscription models are popping up all over.

A key example is the shift in design software from one-time purchases to subscriptions; I’m looking at you, Adobe. Since Adobe’s transition to a subscription model, users have benefited from continuous updates and cross-version compatibility. This model is also more affordable in the short term, with the annual fee being about a third of the full suite purchase cost.

However, this subscription model has a major drawback for creatives. Adobe effectively locks in its users, allowing the company to raise prices or change terms at will. Switching to different software is challenging because users must quickly adapt to a new workflow and convert existing files. When their subscription ends, so does access to their documents.

This issue was starkly illustrated by Adobe’s changes to their terms of service in June 2024, which granted them access and licensing rights to all user-created content and locked users out of Photoshop until they agreed to the new terms. After significant backlash, Adobe clarified that they did not intend to exercise these rights. Yet, they only made minor adjustments to the terms and attempted to calm users with various press statements. Despite the criticism, no substantial changes were made.

This highlights a broader issue: relying too much on dominant companies that disregard user opinions due to their market power.

Private equity and consolidation

Consolidation and the resulting power dynamics are a recurring theme in the industry. Take Monotype, for instance. They’ve been snapping up type foundries left and right over the years. While this means you get an impressive library of typefaces at your fingertips, it also brings significant implications for both the type industry and its users.

Monotype is owned by HGGC, a private equity firm focused on enhancing Monotype’s performance for profit. HGGC acquired Monotype to boost its market value and eventually sell it to the highest bidder for maximum return on investment.

This strategy is problematic for the type industry, which relies on stable relationships between designers and users. Fonts require ongoing maintenance and support. Monotype, owning tens of thousands of families like Akzidenz Grotesk, Helvetica and Plantin, has a significant responsibility to preserve this typographical legacy and must be dedicated to maintaining this heritage.

While generating revenue is understandable, private equity firms often lack a long-term commitment to their assets. A typeface is not just an asset; it is akin to a piece of music that needs to be catalogued, well-documented, reliably licensable, and beautifully displayed.

Monotype’s recent spree of acquiring contemporary type foundries is set to further shake up the industry, especially regarding font licensing. With their dominant market position, Monotype has the power to change the rules to suit their needs, owning a significant portion of the world’s typefaces.

Even independent type foundries are losing more and more their autonomy. As highlighted in a press statement on Monotype’s website: “Monotype’s network of independent type foundries and type designers has grown over 30% over the last 3 years. In a 2022 Monotype survey of 433 independent type foundries, half the respondents revealed that the royalties paid to them by Monotype represented 50% or more of their total revenue. For almost a quarter of foundries, Monotype royalties represented 75% or more of their total revenue.”

This chart shows some of the foundries now owned by Monotype. Some of these foundries were initially acquired by other companies before being purchased by Monotype. Consequently, a significant portion of typographical heritage is now controlled by a private equity company.

As many major companies move from selling licenses to offering subscriptions, Monotype will likely jump on this trend, too. In an essay on Monotype’s website, Mary Catherine Pflug, Director of Partner Product and Operations stated: “The days of purchasing fonts a-la-carte online using perpetual licences are becoming as dated as buying music rather than streaming it! It’s hard to think about an industry that hasn’t gone through this shift. We stream movies at home instead of driving to the video store. We subscribe to software rather than purchase it to download. Everyone from freelance designers to agencies and in-house brand teams have pivoted their workflows and budgets to the new subscription-based service economy that we live and work in.”
This means that a handful of popular fonts will rake in most of the revenue through ‘streaming,’ while countless others will barely make a dent. Users find themselves tethered to the service, as their design documents require the linked fonts to function correctly. You might think, “Why purchase a font license from somewhere else when I need this subscription for my workflow anyway?” This creates a network effect similar to that seen with social media apps — everyone is on it, so everyone needs to be on it.

It’s important to recognize that typefaces aren’t just individual designs; they depend on a vibrant and diverse community of designers. This practice is essential to keep the culture of type alive and thriving.

Another heavyweight in the type industry is Adobe Fonts, the second-largest type platform. This underscores my point even more. Now, imagine the scenario if Adobe were to purchase Monotype; talk about a game-changer!

The 2023 market share for the North American and European typeface industry is estimated using sources like MarketResearch.com and McKinsey&Well. Interpret these figures cautiously due to limited data, but they provide a reasonable market overview.

I think it’s great that companies aim to generate revenue, but how they pursue this truly matters. The goal of maximising quick earnings at all costs will negatively impact visual culture in the long run. The type industry prospers on openness and healthy competition. My intention in writing this essay is not to condemn these large players but to encourage designers to consider these factors, be aware of the trend’s direction, and provoke discussion.

The type community might need to establish a foundation where retiring type designers can publish their fonts. This foundation would handle licensing on their behalf, ensuring their work continues to be used and appreciated without owning the fonts outright. Like a trust for typefaces. The revenue from these licenses should be fairly split to cover the service costs. This could be a solution to avoid further consolidation in the type market.

Gaining further perspective

After pondering these matters, I thought it would be insightful to discuss this with Kris Sowersby, the founder of New Zealand’s renowned Klim Type Foundry, given my curiosity about his views. I always enjoy his astute essays and interviews on a variety of subjects. Kris was kind enough to share his viewpoint with me, providing a deeper understanding of the topic and his thoughts on the future.

Monotype is acquiring more and more foundries.
What do you think this means for the future of the industry?
Kris: I don’t think it’s wise to predict the future of the type industry based on the current purchasing spree of Monotype. From my observation, the industry is more diverse than ten or twenty years ago. There is more typographic literacy and awareness than ever before. Monotype isn’t a threat to the industry at large, only to themselves.
What potential changes could we see if Adobe were to acquire Monotype?
Kris: That’s a big, specific speculation that I can’t comment on.
What’s your take on streaming fonts?
Kris: I don’t think much about them to be honest. I assume large companies would love to further monetise customers by locking them into a font streaming subscription. I don’t think it will happen, en masse though. Not every foundry is interesting in squeezing their customers like many other tech companies.
As a young designer, how would you approach entering the industry today?
Kris: With curiosity and patience.
Do you think establishing a foundation for retiring type designers is a good idea?
Kris: Yes.
Do you have other ideas on how type designers can retire without contributing to market consolidation?
Kris: I do, but they’re not very well fleshed out or considered. It’s a very good question though, there is almost zero conversation about exiting the industry and type design career.