Friday, 23 November 2012

08:23 – Barbara is off to visit the craft fair with her friend Bonnie and Bonnie’s sister. Late this afternoon, she’s going to meet her sister and sister’s husband at her parents’ old house and haul some stuff back here. It’s a normal work day for me.

I canceled the disc part of our Netflix membership yesterday. After seven months, the only discs left in our queue are ones we really don’t care much about. Stuff that I’d stuck in there because it looked like it might be interesting. We’ve been doing the six-months-on/six-months-off thing with discs for a couple of years now. After six months without, they might have some discs we really want to watch. In the interim, we’ll just watch streaming.

Speaking of streaming, I noticed that the Roku box gives interesting hints about what might soon be coming up on Netflix streaming. For example, for a year or more Netflix streaming has had only the first 45 episodes of Heartland: all of series one and two and the first 14 of 18 episodes in series three. A week or so ago, the main titles screen on Roku changed to show Heartland as having 67 episodes available rather than 45. That’d be all 13 episodes of series one and all 18 episodes each of series two, three, and four. Same deal on Army Wives, which Barbara likes. The Roku main titles screen changed from showing 81 episodes available–all of series one through five–to 104 episodes, suggesting that all 23 episodes of series six are likely to be available soon. We knew that series six, part one (13 episodes) would release streaming on 18 December, but apparently Netflix has signed to carry the ten episodes of series six, part two as well.

Today I’m building the first small batch of one of the two new science kits. It’s the CK01B Chemistry Kit, a simplified, less expensive version of the current CK01A kit. I’m also getting ready to build a small initial batch of the second, the LK01 Life Science Kit. We’ll go into full production of both new kits on or around 1 December, once full shipments of all the necessary components arrive here.

09:48 – I just ran the numbers, and Netflix must be delighted that I dropped the DVD service. In seven months, Netflix sent us a total of 62 discs for a total cost to us of $55.93, not including tax. That’s $0.90 per disc, which is less than their cost of postage. When you consider that we also watch a lot of streaming video, we’re the Customers from Hell as far as Netflix is concerned.

Every time I contact Netflix customer support, I beg them to increase the monthly price for streaming. At least double it, to $16/month, and tripling or quadrupling it would be better. That’d give them the money to get more stuff streaming and get it sooner. They wouldn’t lose many customers, when you consider how much cable TV costs, and they could soon wind down their disc rental business. They could do direct deals with the companies that actually produce network TV shows and cut the networks out of the picture entirely. They could even eventually get into streaming sports and other live events, which’d kill cable TV.

10:53 – I just read an article about baby-boomers being the first generation to retire while in debt. The article included the following statement:

According to the report The Plastic Safety Net by public policy organization Demos, Millennial’s (those born after 1980) average credit card debt is $2,982. For those 65+, the average credit card debt is $9,283—and that amount could continue to rise as they age since they have fallen into the trap of financing their lives on credit cards.

But what does that really mean? Barbara and I have been married for 29 years, and every month we’ve had a balance due on our credit cards, which we’ve paid in full every month. So, does this statement refer to current account balances or to overdue balances? There’s a big difference. We have “fallen into the trap of financing [our] lives on credit cards” but we pay off that balance every month. Does that count?

19 thoughts on “Friday, 23 November 2012”

  1. Ahem. We’re trying to get a panic going. Rational thought, and especially quantitative thought, are neither appropriate nor welcome. Your cooperation is appreciated.

  2. I doubt that you spend $9000 per month on your credit cards. Most of these people are carrying balances, and paying whopping interest on them.

  3. Panic will come soon enough. Give Nosferatu II and his regime another year or two to work their magic. Along with the bonzes on Wall Street and at the Pentagon.

    “Every time I contact Netflix customer support, I beg them to increase the monthly price for streaming. At least double it, to $16/month, and tripling or quadrupling it would be better. That’d give them the money to get more stuff streaming and get it sooner. They wouldn’t lose many customers, when you consider how much cable TV costs, and they could soon wind down their disc rental business. They could do direct deals with the companies that actually produce network TV shows and cut the networks out of the picture entirely. They could even eventually get into streaming sports and other live events, which’d kill cable TV.”

    We have only ever done the streaming paht; I’ve been pleasantly surprised by the number of quality documentaries and historical items they have, and would look forward to more and better stuff and we’d be willing to pony up through that $64 a month you suggest for it. And begone cable and broadcast crap. If they become a problem or hassle or I don’t like their offerings anymore, well, we have DVDs and other alternatives.

  4. I must admit that Netflix is a total deal. We got our disabled daughter Netflix instead of pulling cables for another Directv box to her room. Much easier and cheaper.

    I am wondering why Netflix does not do a tiered operation. Pay the minimal amount and get their current online stuff. Pay 2X and get essentially all the pay per views on Directv. Or Netflix should do ppv and charge individually for each ppv feature that you watch. One hopes that Netflix is working on that.

    Directv has 30 million customers. I assume that Netflix has more.

  5. I think that the chief ruiner of the USA is easy credit and that mentality. The wife and I had our credit cards up to $50K ten years ago. We now pay off all balances each month and I yell to the heavens that I am going to cut these things up each time.

    Just wait, the credit card companies will be the first to crank their interest rates. If you think that 30% per year is bad, just wait until you see 30% per month.

  6. Most people like unlimited streaming in the same way that they like “free” shipping. Netflix might think about offering PPV on live sports and new-release movies, but not many people are willing to pay PPV for other stuff.

    If I were Netflix, I’d stick with the flat-rate streaming, but increase the monthly charge. Incidentally, I wasn’t suggesting $64/month, but rather a doubling, tripling, or quadrupling of the current $8/month subscription fee.

    But I would spin off a completely separate plan for sports and other live stuff. Call it SportsFlix or NetSports. Hmm. Both of those have problems.

    IIRC, the last time I saw figures Netflix had just under 30 million subscribers. Boosting the monthly fee from $8 to $16, assuming no subscriber loss, would give them nearly $6 billion a year to play with, the great majority of which could be spent on acquiring content. At $32/month, that’s more than $11 billion a year. Yeah, $32/month might give some people pause. Until they looked at what they’re paying for cable TV with commercials and all.

  7. Yeah, I really hate the credit card companies. First, because they are rapacious. Second, because the two big ones openly collude with each other, as a kind of duopoly. Third, because they have lousy security, and try to make it the merchants’ problem.

    My wife’s business is categorized by the credit cards as belonging to a category at high risk of fraud, so she pays higher commissions on the transactions. The fact that, in nearly 20 years of business, she has never had a single fraudulent transaction? Doesn’t matter. There is essentially no risk; certainly nothing worth 3% – 4% of the gross value of a transaction.

    I’ve ranted before about the security measures. They don’t want us handling our own payment processing on a web-shop; if we do, they insist on a full security audit of the hardware and network hosting the website (at our expense, naturally). The fact that the website is hosted at a major ISP? Well, that means the ISP should allow the audit and we should still pay for it. You can imagine what the ISP thinks about this. Really, they’re forcing merchants to use the elected few “official” payment services, all of whom pay a whopping licensing fee to…the credit card companies.


  8. Why not use PayPal for credit card processing? It’s something like $0.30 per transaction plus 2.9% of the gross. On a $185 kit, I think they charge me $5.67. They also have a free device that lets you swipe cards.

  9. Credit cards. I pay them off every month. Merchants have built their cost into every transaction. Tried asking for a cash discount in the last few decades?

    Streaming at 1Mb/sec sucks. That is the fastest I can get period. Cable is not even available. You city slickers are spoilt.

  10. My business gets charged an effective rate of 5% by amex and 4% by the visa/mc consortium. There are so many fees associated with the reward cards and all of our USA customers seem to use them. But, we only have 3 or 4 credit card transactions per month with an average of $2,000 per transaction. Actually, when we get an international transaction by CC, it saves us money. And the international people do not use reward cards, they are just trying to get around their countries currency controls.

  11. I have about $30k debt (on the house), which will be gone next year. Actually, it was already gone in June this year, until I bought a new car ($33k). I always pay off my credit card (singular) each month, and so haven’t paid interest since 2002, when I accidentally paid my balance a few hours past the deadline. 30 years ago I had 6-7 credit cards. Why? Because I could. I had an Amex Gold Card but got sick of the high charges both on me and merchants.

  12. I find even 2.9% high – just what service does the credit card provide, that is worth 3% of the gross transaction value? It’s not an international transaction, where one can argue that there really is some service, it’s basically just a debit transaction. Even if you argue that they are loaning out the amount for a couple of weeks, 3% is far too high.

    @Jim: “Tried asking for a cash discount in the last few decades?” Any place it is allowed, the credit card agreements prohibit merchants from offering cash discounts. If you can’t get one, that’s probably because they can’t.

    I’m with Miles: I used to have several credit cards, because it felt somehow prestigious. Eventually, I realized I was being had by the marketeers. I mean, anyone can have an Amex, if only they pay the fee. Meanwhile, MC and Visa literally throw themselves at you – really, it’s no wonder they have lots of accounts that default. Why the rest of us should pay for their stupidity is one of my original questions. Now I just have two cards, one business and one private, and they rarely get used.

  13. I have one MC which I rarely use and two gas cards. Everything is usually cash now. While looking more into barter and alternative currencies and coinage.

    40 here this morning and overcast and windy; Lake looks oceanic again.

  14. I have 2 credit cards. Good idea to have more than 1, IMO, as there is ALWAYS the odd occasion when a card does not work for some reason or other. Who knows why, but I don’t have time to put the seller on hold while I spend an hour trying to get it solved. Just whip out the other card, and you are on your way. Occasionally, I buy used audio equipment for the radio project, using my card. On more than one occasion, I was talking with somebody halfway across the country, trying to obtain a popular piece of equipment that somebody else would snap up within the hour (once had a purchaser in the store trump me with my phone call–even though the purchaser walked in after they took my call). I use the other card when necessary and do not lose the purchase.

    If one travels at all, having at least 1 credit card is a requirement. Neither airlines nor car retal agencies will accept cash after 9-11. Shortly after we moved to Germany, my dad, ever the survivalist, decided credit cards were not in accord with a return to barbarism’s ways, so he cancelled all of his. They had talked about visiting us in Germany, but it shed some new light on the subject when I told him he would not be visiting us anytime soon without that card to buy an airline ticket. He was shocked that there would be anybody in the world who would not accept cash. Heck, I could not even pay for my daughter’s airfare for her study abroad trip WITH a credit card. Had to phone an old travel agent, who had just closed her office, but was working out of her home for a few customers. She took care of the ticket, and I paid her with the credit card which my daughter’s airline would not accept. Daughter was only a couple years out of high school and could not get a credit card on her own at that time.

    I abhor having to constantly get cash out of the bank. In Germany, there was no avoiding it, as hardly anyone accepted anything but debit cards, and many Taunte Emma Laden (mom and pop stores) would not accept any cards at all (restaurants usually would if the amount was €100 or more). But here I am back in financial heaven, and I pay for everything with a card, no matter the price, except Mickey D’s—and I suppose I could there. I also do not recycle at all into the 7 separate categories required in Germany, and I don’t feel bad at all. Especially since Tiny Town only has paper recycling, and there is no curbside pickup for that.

  15. I am very much a fan of paying by cash, for a couple of reasons. Probably the biggest is what it says about the society one is living in. You can go into a corner store, buy a pack of gum and they will have change for your Fr. 200 bill. In the US, you can forget it – if they had they kind of change, they would be robbed daily.

    Not too far behind: It is certain that the credit card companies collect data on what you purchase, and when, and where. It is equally certain that they sell this data, maybe anonymized but maybe not. Where the US government is going these days, this data is certainly also available to all sorts of agencies in non-anonymized form.

    Lastly, seeing the merchant side of things through my wife’s business, I really resent knowing that the credit cards are skimming 3% or more off the top of the gross transaction value. For lots of small businesses, that’s pretty much their entire profit margin after all expenses have been paid. If you like a mom’n’pop business, pay them in cash.

  16. I know that we get charged extra because we do not have their card in our hands. The customer just gives us their number, expire and ccv over the phone.

  17. The wife and I only have two debts, our house which was refinanced for the down payment on our commercial property that we bought last year and the commercial property that we bought last year. The commercial property has three tenants at the moment and is cash positive which Mr. Obama will be taking a healthy portion of next year. I just got the property tax bill for both, $18K. The county was courteous enough to combine both properties into one bill, how nice.

    Our newest vehicles are 2005, my Expedition with 120K miles and the wife’s Honda civic with 60K miles. I had been saving money for a new Jeep Wrangler four door but we are now looking for a one story home in an effort to get our disabled daughter downstairs. So, all purchases have been put on hold for the time being.

  18. I have no arguments with Brad’s view—especially the safety of €200 in change in the till. Wow, when the till at Aldi popped open, there were probably thousands in there. Of all the places I have lived, I felt the safest in Berlin. And I never ran into a woman who feared for her safety at night there, either. Men always come to the aid of women, when asked—even if it were for help onto the transit with packages. And the deference to older people is way above what I see here. People who are obviously over 70 are always allowed on the transit first, and given plenty of time and help, if needed—by everyone, including teens and kids. Boy, teens here will push anybody and everybody out of their way, regardless of age.

    But some realities I am just not going to fight. I do not like the idea of collecting so much data about purchases, but that should be prohibited in the first place by privacy protections, except by opt-in measures. Should I go out of my way to avoid the reality of that shortcoming? At this point, the answer is that trekking to the ATM to constantly retrieve more money bothers me more than credit card companies collecting my purchase data.

    Likewise, I am trying to think what mom & pop stores I shop at here. The Chinese couple running a small little local restaurant is the only one I can think of. (Btw, I had thought they were around 20’ish, just starting out. Turns out they have 2 kids, a boy 13 and a girl 9, both of whom speak perfect Midwest English, even though they have been here less than 2 years.) I do pay cash there, but not consciously; it is usually less than $5, and I guess $5 is my threshold before using a card.

    Acceptance of cards is really and truly universal here. The bottom line is that *I* am the loser if I do not use a card. Prices everywhere are raised to accommodate businesses’ expense for the use of cards; why should I voluntarily give anybody more money than I have to? I did appreciate businesses in Berlin who, when I tendered a card, would gently let me know that they would rather deal in cash. If somebody actually tells me it strains them to pay the card fees, I am glad to accommodate. But the bottom line in Germany was that only very large firms accepted cards, so I was relegated to cash in almost all instances as the default. However, I really do considerably prefer the convenience of a cashless society.

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