Humble Bundle ended its second pay-what-you-want deal on Saturday. After running for just 11 days, the startup, newly backed by Y Combinator sold over $1.8 million in video games, outperforming the great success the first bundle had earlier this year.The
The Humble Bundle lets customers choose the price they wanted to pay - anything from a penny up - to download a package of 5 indie video games. And even though they could have paid just a cent, the average customer spent $7.83 to download the bundle. Some companies, in order to have their names listed as top contributors on the Humble Bundle site, paid several thousand dollars for the bundle. (And for those keeping score at home, Linux users again paid twice as much as Windows users - $13.76 to $6.67.)
Making the Pay-What-You-Want Business Model Work
Pay-what-you-want has become an interesting alternative business model online, with bands like Radiohead demonstrating that it can be an even more successful than traditional pricing. The key to success, however, may be the amount of attention you can generate for your campaign. Pay-what-you-want is often a trade-off between a making small number of full-price sales and a large number of sales at what's likely a far lower price. One of the games in the bundle Machinarium, for example, normally sells for $20. But by being part of the Humble Bundle, certainly it sold many times more copies than normal.
Of course, not everyone can generate quite the buzz of Radiohead or Humble Bundle for that matter, and a recent study pointed to another option for helping make pay-what-you-want endeavors successful: combine it with a voluntary payment to charity, and people then tend to give more. Indeed, Humble Bundle customers can flag some of the money to go towards charity - either Child's Play or the EFF - and some of it towards a tip for the Humble Bundle itself. Venture Beat estimates that tip might've brought in around $90,000 for the startup's tip jar.
Adding a BitTorrent Option
One of the interesting decisions that the Humble Bundle made this year was to make the games available for download via BitTorrent. Bundle co-founder Jeffrey Rosen asked people why they pirated the Bundle, rather than purchasing it for a penny. Many responded that they simply wanted to be able to access the games via BitTorrent as, for example, they had a poor Internet connection and couldn't sustain the download.
So Rosen added BitTorrent to the download options. He notes, "The most common search term for the Humble Indie Bundle is 'Humble Indie Bundle torrent', so we hope that by supporting BitTorrent we can help convert at least some of the pirates into legitimate users, or at least give one less reason to pirate it."
With the pay-what-you-want pricing, the DRM-free content, and the embracing of BitTorrent, the Humble Bundle seem to be trailblazing a very different model for selling and distributing online content. What are your thoughts on their ability to make this work so well?