Pantone's Forced Obsolescence

Pantone has created a highly profitable business by standardizing and licensing colors for the fashion and design industry, generating over $100M in annual revenue through a clever business model.

Key Points:

• Core Product:

  • Books of standardized colors used by fashion houses and graphic design studios
  • Trademarked color names (e.g., burgundy blue, sapphire orange)
  • Intellectual property rights on specific color definitions

• Genius Revenue Model:

  • Mandatory annual book purchases
  • Books "fade" from sun exposure, requiring replacement
  • Continuous reselling to the same customers

• Market Position:

  • Industry standard for fashion and graphic design
  • Entire industry standardized on their color system
  • Essential tool for design professionals

• Additional Revenue Streams:

  • Color forecasting
  • Trend reporting
  • Color licensing when brands want to use specific Pantone colors

The business succeeds by creating an essential industry standard with built-in recurring revenue through clever product design (intentional fading) and intellectual property protection.