The Power of Bundles

There’s a nifty idea being explored on a website that sells video games, both commercial and indie, for instant download. Steam occasionally bundles several games into a little package that contains a combination of popular and more obscure games. These bundles are often pay-what-want, but despite the fact that most people only dish out a few bucks, Steam manages to collect several million dollars in sales because of the sheer volume of bundles sold worldwide. I don’t know exactly how the earnings divide between the game developers and the site, but each developer has a chance to make hundreds of thousands of dollars from this bundling. And since all this takes place in the digital sphere, the distribution costs are minimal.

The first time I heard of this concept, I thought, “wouldn’t it be interesting to bundle contemporary music that way?” Pick a couple of well-known composers and bundle them with some emerging artists. Sell the bundle as pay-what-you-want or maybe as a subscription service. But lo and behold, it seems there is already a site exploring this idea with music, though in the more ‘popular’ sphere.

The Humble Bundle is bundling five albums from indie artists of different genres and giving customers control over pricing and even distribution of their money. Once you’ve picked the amount you are willing to part with, there are three sliders that let you distribute that sum between three possible beneficiaries: the artists, charity and the website itself.

The genius of the site’s design is the real time statistics. The site shows the total bundles purchased and the total amount earned, and it calculates averages. Your contribution makes the figures grow in real time making you feel like you are making an impact. It’s immediate gratification. The averages also help you decide on a ‘fair’ payment and make you feel generous if you pay more. The site lists the highest ‘bidders’ so you can proudly put your alias on display if you pay over $100.

The other nifty feature is the bonus sixth album, which can be unlocked by paying more than the current average. Since the average is calculated in real time, this feature is designed to automatically drive the average price up. Its seems, however, that at some point the average levels out and goes up very, very slowly since most people probably only pay a penny more each time. In the last 10 hours the average has only risen by three cents, from $8.08 to $8.11, but considering volume, it’s probably still making a difference.

That might seem like a measly price for six full albums, but when you consider the potential volume and the very low cost of distribution, it makes economic sense. In the last 10 hours, the bundle has made about $36,000 bringing the total to over $227,000 with almost 28,000 bundles sold. That’s almost $38,000 per album minus charity and contribution to the website. The bundle will be available for the next 13 days. I will update you on its success towards the end.

I would love to see someone do this with contemporary art music. Or maybe bundling contemporary music with classics to foster that sense of discovery. Of course, the big question is whether a platform like this can be sustainable or if it only works once, as a kind of sensation of the moment.

2 thoughts on “The Power of Bundles

  1. Disregard my comment about the average reaching a plateau. Since I posted this, just 5 hours ago, the average has already climbed to $8.14. When thousands of bundles are being purchased, that makes a difference. Presumably, as long as this project continues to generate interest, the average will keep climbing steadily. So, one of the benefits of purchasing early is that you actually get the bonus album cheaper.

  2. Pingback: Bundle Update | Anna Pidgorna

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