Unbundling

Description

Interview with Anita Elberse:

"Q: Could we have real-world definitions of what you mean by bundle, pure bundle, mixed bundle, and unbundling?

A: Sure. A "bundle" is any set of products sold together. Think of songs on a music album, television episodes on a DVD, or chapters of a book. "Pure" and "mixed" refer to the condition under which those products are sold. Under a pure-bundling strategy, a firm sells only the bundle, while under a mixed-bundling strategy, a firm sells both the bundle and (all) the products separately. "Unbundling" refers to products that were previously sold as pure bundles being sold as separate items.

Take rock band U2's latest album, No Line on the Horizon, one of this year's top-selling albums. People can buy the full album with its 11 songs as a bundle, but they can also download one or more songs separately through online services like Apple's iTunes. Before the emergence of the online channels, it was not economically feasible to sell all the songs on an album separately—just imagine labels having to print and distribute CDs with numerous subsets of the songs on the album—but when the process is fully digital the costs of reproducing music are much lower. The Internet makes mixed bundling feasible." (http://hbswk.hbs.edu/item/6312.html)