5 ms·

Is Humble Bundle the new Groupon?

VLM 13y ago
No, because its mathematically impossible for the participants to be driven into bankruptcy. Also, unlike groupon, humble bundle so far has not offered astrology readings, car detailing, and massages (edited to add, that's all groupon has ever offered in my area, depending where you live its possible they offered "real" stuff where you live)
- jljljl 13y ago
  >>> No, because its mathematically impossible for the participants to be driven into bankruptcy. ...Ok, I'll bite, why is it mathematically impossible?
  - freehunter 13y ago
    Because the marginal cost of digital distribution is next to nothing. While it costs Starbucks a few dollars for them to give you a cup of coffee, it might cost a couple pennies for bandwidth (on Humble's end) to sell another copy of a digital movie.
    - jljljl 13y ago
      True, I suppose that once they have recouped their fixed costs and development/production costs, this would be the case. So HB a good method for generating demand/revenue once you've crossed that point, but not so before.
      - VLM 13y ago
        Regardless of if you've passed your fixed cost point or not, once you've exhausted the market for people willing to pay $25 for, say, Little Inferno, then you have absolutely nothing to lose and everything to gain by clearing the market again, this time at a lower price, until you hit the humble bundle and people who wouldn't send you $10 are sending you $5. As an overall business or project you may or may not end up with a net profit when its all done, but your figures will only improve if the marginal cost of sale is zilch and you can clear the market yet again at a lower price. Someday someone will invent a working microtransaction system (LOL people have been saying that forever) and all this HB stuff will hit it again for ten cents each (Hey, ten cents times ten million sales isn't all that bad for a days work, and sales always increase as price drops, so I could see it...)
        jljljl 13y ago
        Sure, but this is true for any product, and has nothing to do with it being mathematically impossible to go bankrupt on Humble Bundle. If you haven't covered your fixed/dev costs, and if you misjudge the market quantity demanded at each price points, you could easily drive yourself to bankruptcy by running a Humble Bundle. The only way Humble Bundle makes it "mathematically impossible" to go bankrupt (which was the claim I was disputing) is if they present you with a perfect demand schedule and then somehow align the price each person pays to that demand schedule, without letting anyone pay above or below their reservation price. Whoever figures this out is probably not going to just use it for independent pay what you want gaming sales.
- Dewie 13y ago
  > No, because its mathematically impossible for the participants to be driven into bankruptcy. Well, buying a humble bundle is a potential opportunity cost for each comedian. If someone buys a humble bundle, they are most likely not going to buy whatever show that comedian offered in some other format in addition. Something like a humble bundle could in theory be such an opportunity cost for a comedian that he cannot recoup the production cost of a show because of it. Or is only the marginal cost of distribution a factor in this idea of "mathematical impossibility"? Is that the only variable that influences a potential bankruptcy?
  - VLM 13y ago
    Its easy to run a groupon for a real physical product where you lose money on each individual transaction, and if you make enough transactions such that X*Y exceeds the net worth of the company, its toast. Its not possible, so far as I know, to get an individual transaction net loss from a humble bundle, so make one sale or a billion its not possible to end up a net negative much less a negative greater than the net worth of the sponsoring company. If you want to see something funny, try typing in a custom amount on a humble bundle less than $1. You get a pop up graphic and she doesn't look amused. This would imply to me that CC processing/amazon processing costs less than $1 for a $1 transaction. I don't think the potential sales loss exists unless you put a new product on HB. No one does that, its always something older. Frankly a "fan" of these comedians would have bought it a long time ago, so all thats going to happen is they'll get a small stack of cash and a bunch of new fans. Which is cool.
  - mercurial 13y ago
    I don't know about comedy, but they recently offered a "Humble ebook bundle", which included the first novels of different series. It's a great way to find out if you like the series and want to purchase more. Just like it's a good way of purchasing games, and I'll gladly pay much more than the average to support indies. I think it has really worked out both for sellers, buyers and Humble Bundle so far.
    - VLM 13y ago
      About one Internet generation ago a paper sci fi (real scifi, not like TV "sy fy") publisher called Baen had the same exact business model except with cdroms. It worked. I hear it worked very profitably. As an anecdote I blew a lot of money with them after reading the first novel or whatever. Also gained a couple new authors I still like. There's probably a startup opportunity in other areas where "the first hit is free" works pretty well. Someone should try it with TV shows.
- pyrocat 13y ago
  Haha yes, massage therapy definitely isn't a "real" service.
  - VLM 13y ago
    Well, I wrote "real stuff" as in I've heard you can get food on groupon in some places and "things" but all we have locally is overpriced services marked down to a realistic price. Massage therapy isn't real stuff because you can mark the price to anything you want, then groupon it 75% off. So if a realistic charge for massage is $25/hr (I donno) then you mark up to $100/hr and groupon it for 75% off net $25/hr. The bankruptcy stories all come from restaurants selling 100K steaks (hundred kilosteaks?) for $1 where the raw uncooked meat alone is $5. Whoops. What is a fair price for the valuable service of astrological readings? Hard to say when its pure profit unless it involves sacrificing live chickens as part of the act or something like that. I suppose there's always a real estate cost at the bottom if nothing else.
happimess 13y ago
No, for two reasons. First, Humble Bundle scales. They can pull together a handful of artists to offer some MP3s, and sell it to the whole world. Groupon has to negotiate with small businesses in every market that they want to have a presence. Secondly, the nature of the goods on offer is different, in that a restaurant or cafe has considerable marginal costs associated with each sale, whereas a comedian selling MP3s has no marginal costs, and even the Humble Bundle team has almost no marginal costs. The Humble Bundle team spends a few cents on bandwidth for each sale, and the artist only loses hypothetical future sales at a higher price. (edit: pluralized "business")
- mcherm 13y ago
  > The Humble Bundle team spends a few cents on bandwidth for each sale It should be significantly less than that.
  - marchustvedt 13y ago
    From what I've seen, streaming a 1080p version of a 90-minute feature film is actually fairly significant in terms of CDN fees, unless you're at massive scale.

VLM 13y ago

No, because its mathematically impossible for the participants to be driven into bankruptcy. Also, unlike groupon, humble bundle so far has not offered astrology readings, car detailing, and massages (edited to add, that's all groupon has ever offered in my area, depending where you live its possible they offered "real" stuff where you live)

jljljl 13y ago
>>> No, because its mathematically impossible for the participants to be driven into bankruptcy. ...Ok, I'll bite, why is it mathematically impossible?
- freehunter 13y ago
  Because the marginal cost of digital distribution is next to nothing. While it costs Starbucks a few dollars for them to give you a cup of coffee, it might cost a couple pennies for bandwidth (on Humble's end) to sell another copy of a digital movie.
  - jljljl 13y ago
    True, I suppose that once they have recouped their fixed costs and development/production costs, this would be the case. So HB a good method for generating demand/revenue once you've crossed that point, but not so before.
    - VLM 13y ago
      Regardless of if you've passed your fixed cost point or not, once you've exhausted the market for people willing to pay $25 for, say, Little Inferno, then you have absolutely nothing to lose and everything to gain by clearing the market again, this time at a lower price, until you hit the humble bundle and people who wouldn't send you $10 are sending you $5. As an overall business or project you may or may not end up with a net profit when its all done, but your figures will only improve if the marginal cost of sale is zilch and you can clear the market yet again at a lower price. Someday someone will invent a working microtransaction system (LOL people have been saying that forever) and all this HB stuff will hit it again for ten cents each (Hey, ten cents times ten million sales isn't all that bad for a days work, and sales always increase as price drops, so I could see it...)
      - jljljl 13y ago
        Sure, but this is true for any product, and has nothing to do with it being mathematically impossible to go bankrupt on Humble Bundle. If you haven't covered your fixed/dev costs, and if you misjudge the market quantity demanded at each price points, you could easily drive yourself to bankruptcy by running a Humble Bundle. The only way Humble Bundle makes it "mathematically impossible" to go bankrupt (which was the claim I was disputing) is if they present you with a perfect demand schedule and then somehow align the price each person pays to that demand schedule, without letting anyone pay above or below their reservation price. Whoever figures this out is probably not going to just use it for independent pay what you want gaming sales.
Dewie 13y ago
> No, because its mathematically impossible for the participants to be driven into bankruptcy. Well, buying a humble bundle is a potential opportunity cost for each comedian. If someone buys a humble bundle, they are most likely not going to buy whatever show that comedian offered in some other format in addition. Something like a humble bundle could in theory be such an opportunity cost for a comedian that he cannot recoup the production cost of a show because of it. Or is only the marginal cost of distribution a factor in this idea of "mathematical impossibility"? Is that the only variable that influences a potential bankruptcy?
- VLM 13y ago
  Its easy to run a groupon for a real physical product where you lose money on each individual transaction, and if you make enough transactions such that X*Y exceeds the net worth of the company, its toast. Its not possible, so far as I know, to get an individual transaction net loss from a humble bundle, so make one sale or a billion its not possible to end up a net negative much less a negative greater than the net worth of the sponsoring company. If you want to see something funny, try typing in a custom amount on a humble bundle less than $1. You get a pop up graphic and she doesn't look amused. This would imply to me that CC processing/amazon processing costs less than $1 for a $1 transaction. I don't think the potential sales loss exists unless you put a new product on HB. No one does that, its always something older. Frankly a "fan" of these comedians would have bought it a long time ago, so all thats going to happen is they'll get a small stack of cash and a bunch of new fans. Which is cool.
- mercurial 13y ago
  I don't know about comedy, but they recently offered a "Humble ebook bundle", which included the first novels of different series. It's a great way to find out if you like the series and want to purchase more. Just like it's a good way of purchasing games, and I'll gladly pay much more than the average to support indies. I think it has really worked out both for sellers, buyers and Humble Bundle so far.
  - VLM 13y ago
    About one Internet generation ago a paper sci fi (real scifi, not like TV "sy fy") publisher called Baen had the same exact business model except with cdroms. It worked. I hear it worked very profitably. As an anecdote I blew a lot of money with them after reading the first novel or whatever. Also gained a couple new authors I still like. There's probably a startup opportunity in other areas where "the first hit is free" works pretty well. Someone should try it with TV shows.
pyrocat 13y ago
Haha yes, massage therapy definitely isn't a "real" service.
- VLM 13y ago
  Well, I wrote "real stuff" as in I've heard you can get food on groupon in some places and "things" but all we have locally is overpriced services marked down to a realistic price. Massage therapy isn't real stuff because you can mark the price to anything you want, then groupon it 75% off. So if a realistic charge for massage is $25/hr (I donno) then you mark up to $100/hr and groupon it for 75% off net $25/hr. The bankruptcy stories all come from restaurants selling 100K steaks (hundred kilosteaks?) for $1 where the raw uncooked meat alone is $5. Whoops. What is a fair price for the valuable service of astrological readings? Hard to say when its pure profit unless it involves sacrificing live chickens as part of the act or something like that. I suppose there's always a real estate cost at the bottom if nothing else.

happimess 13y ago

No, for two reasons. First, Humble Bundle scales. They can pull together a handful of artists to offer some MP3s, and sell it to the whole world. Groupon has to negotiate with small businesses in every market that they want to have a presence. Secondly, the nature of the goods on offer is different, in that a restaurant or cafe has considerable marginal costs associated with each sale, whereas a comedian selling MP3s has no marginal costs, and even the Humble Bundle team has almost no marginal costs. The Humble Bundle team spends a few cents on bandwidth for each sale, and the artist only loses hypothetical future sales at a higher price. (edit: pluralized "business")

mcherm 13y ago
> The Humble Bundle team spends a few cents on bandwidth for each sale It should be significantly less than that.
- marchustvedt 13y ago
  From what I've seen, streaming a 1080p version of a 90-minute feature film is actually fairly significant in terms of CDN fees, unless you're at massive scale.