Category: netflix

Tuesday, 6 September 2011

09:30 – I need to decide what to do with our Netflix subscription. Right now, we’re paying $10/month for unlimited streaming and one disc at a time. As of our anniversary date on 26 September, that jumps to $16/month if I do nothing. I’ll probably bump it to $20/month for unlimited streaming and two discs at a time.

Netflix really miscalculated when they introduced the $10/month plan, which was $8/month for streaming and $2/month for the one disc at a time. I think they assumed that most people on that plan would watch nearly all streaming, and get an occasional disc to fill in gaps. What we did, and what I suspect most people on that plan did, was the opposite: watch DVDs as much as possible and fill in with streaming. As a result, Netflix was sending us about eight discs a month for that $2, or $0.25 per disc. Given that Netflix had to pay postage both ways, and considering DVD acquisition costs and handling expenses, Netflix was probably losing at least $10/month on us, and probably a similar amount on many of their $10/month customers. That obviously couldn’t go on, so Netflix put a stop to it.

Netflix has been pushing streaming heavily for obvious reasons. Delivering an hour of streaming costs them maybe $0.05, including content and transmission costs, while delivering an hour of content on disc costs them an order of magnitude more. If I were Netflix, I’d continue to increase prices, both for streaming and discs. Streaming, so they can afford to buy more streaming content. Discs, because they want to discourage people from renting discs. Additional revenue will allow Netflix to expand their streaming options dramatically. And price increases won’t lose them many customers. What, after all, are the alternatives?

While they’re at it, I think Netflix should introduce a separately-priced streaming channel or channels for live sports. Netsportz? Assuming that only 20% of their members sign up at, say, $20/month, that’s still more than $100 million/month in revenue. They could buy a lot of live sports for $100 million a month. And, of course, a lot more than 20% of their membership would probably sign up for an all-sports Netflix channel, and they’d probably be willing to pay more than $20/month.


Work on the biology lab book and kits continues. We have quite a few chemistry kits in stock now and components to build a bunch more, so we can forget about chemistry kits until stock gets low. I’m prototyping a biology kit now. There are lots of decisions to make. Some of them seem minor, but have implications. For example, do I include a sleeve of plastic Petri dishes, which are inexpensive but cannot be reused, or do I include two (or three or four) glass Petri dishes, which are fragile, much more expensive, and require autoclaving, but can be reused indefinitely? The problem is, which is the better choice depends on the person who’s buying the kit. For many homeschoolers, the plastic Petri dishes would be better. They’re cheaper, more convenient, and pre-sterilized. For others, who might do a lot of culturing, the glass Petri dishes are the better choice. I’m inclined to think that the latter group are in a small minority, so right now I’m leaning toward the plastic dishes. What I may do is offer an optional separate culturing kit with glass Petri dishes, several types of agar, and so on.


11:07 – In case you’re wondering what happened to the title in today’s entry, WordPress screwed me again. I’d entered a title and most of the text, at which point Colin started bugging me to go out. So I clicked the Save Draft icon. WordPress, instead of saving, blew me all the way out to the login screen. I logged in, and found my entry was truncated in the middle of the second paragraph. So I used Firefox’s back button to return to what I’d entered. I finished the entry and posted it. I *know* that entry had the title, because I looked before I clicked the Publish button. But for some reason WordPress kept the entry but lost the title.

Unfortunately, that’s nothing unusual for WordPress, which is extremely unstable, at least on my hosting service. I frequently get error messages when I try to save a post, and even more frequently when I’m using the Tools section of the dashboard to backup my site from the server to my local machine. I use WordPress only because my new hosting service offered a one-click install, but I’m beginning to wonder if there’s a better system available.


My decision on the Petri dishes was made for me. I have two or three vendors from whom I can buy them. All of them ship in packs of 10. Presumably, those factory packs are well protected against breakage, but I have no desire to try to package individual Petri dishes. I sure don’t want to allocate the cost of 10 Petri dishes to each kit. Even if they were free, that’d be too many Petri dishes and too much room in the package. So I’ll go with a sleeve of plastic Petri dishes. I may or may not create a separate dedicated culturing kit. If I do, it’ll include a factory pack of 10 glass Petri dishes. I will probably list the kit contents as six Petri dishes, with a note that we actually include 10, but allow for 40% breakage. That way, if someone does get all 10 unbroken, they get more than they expected.


12:39 – Hmmm. I may have screwed Dr. Koonin big time. I noticed his free book on a list from irreaderreview.com. Chances are, not a lot of people who are interested in evolutionary/molecular biology read that list. But I had to go and tell Jerry Coyne, who has a large international readership, nearly all of whom are interested in evolutionary/molecular biology. Then PZ Myers, who has a gigantic international readership–he probably gets more visits in an hour than I get in a week–sees the announcement on Jerry’s site and posts a link on his own site to Dr. Koonin’s free book. Meanwhile, Richard Dawkins, who makes PZ look like small potatoes, also sees the announcement on Jerry’s site. I don’t know if he’s posted about it, but if he has, between Coyne, Myers and Dawkins, it’s unlikely that anyone on the planet who has much interest in evolutionary/molecular biology is unaware that Koonin’s book is available for free.

I just checked Amazon, and Koonin’s book is now in the Top Ten. Not the Top Ten biology books or even the Top Ten science books. The Top Ten among all books on Amazon. That means Koonin’s book is probably “selling” thousands of copies per day. And everyone on the planet who has any interest in the subject probably has a free copy by now, leaving Koonin’s remaining market as only people who are not interested in his book.

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Sunday, 4 September 2011

09:22 – I just read an article on FoxNews about the importance of religion in the GOP presidential campaign. According to the article, more than 70% of Republicans and more than 50% of Democrats considered it at least somewhat important that a candidate have “extremely strong” religious beliefs. I guess that explains how buffoons like Rick Perry and Michelle Bachman, both of whom would like nothing more than to remake the US into a theocracy, can be taken seriously as candidates. On the other hand, re-electing Obama might be even worse. Moderates like Ron Paul (a Lutheran/Episcopalian/Baptist) and Jon Huntsman (a semi-lapsed Mormon) have no chance, with the media ignoring both of them as a matter of policy. And, of course, admitted atheists have no chance of being elected to any office, let alone the presidency. (Yes, I know Obama is an atheist, but he won’t admit it; even Democrats won’t vote for an atheist.)

What all this tells me is that, once again, there won’t be any major party candidate worth voting for in 2012. No surprise there. I think the last time we had a major-party candidate worth voting for was when Thomas Jefferson ran.


I’ve read several articles about negotiations between Netflix and Starz falling through. When that hit the news, Netflix stock dropped something like 10%. I can’t see that it’s a big deal. In 2008, Netflix negotiated a contract with Starz for about $30 million per year. That contract expires in February 2012. Netflix offered to increase its annual payment by a factor of ten, but $300 million a year wasn’t enough for Starz. They wanted Netflix to charge a premium for access to their content, and that Netflix absolutely refused to do. Good for Netflix.

All of the articles focused on Netflix losing Starz content, but what none mentioned was that Starz gave up $300 million a year, which it has no prospect of getting elsewhere. Netflix, on the other hand, now has $300 million a year available to buy streaming rights from other content providers. As Netflix said, in 2008 Starz was a major provider of Netflix’s streaming content. Now, not so much. Starz is down well below 10% of what Netflix streaming customers watch, and headed for 5%. Netflix can do an awful lot to replace that 5% with $300 million a year. And, of course, nearly all of what Starz was providing streaming is available on DVD, so Netflix can simply buy the DVDs for its customers. We’re not going to miss out on anything. And, if Netflix really wants to stick it to the studios, it can simply stop giving them a 30-day window after the DVD is released before that DVD is available from Netflix.


Barbara and I are spending some time over the long weekend assembling more chemistry kits.

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Thursday, 11 August 2011

08:14 – Interesting article in the paper this morning about cable/dish cutters. Last quarter, cable TV and satellite companies showed a net loss of between 380,000 and 450,000 households. The article attributes most of that to people cutting back because of the poor economy, including kids who’ve moved back in with their parents no longer needing their own subscriptions. It claims that on-line viewing is a minuscule factor in the falling number of cable/satellite subscribers. Of course, it also says that people can watch TV episodes on Netflix for free.

What’s never reported is the number of people who’ve downgraded their cable/satellite subscriptions. Barbara and I fall into that category. We cut back several years ago to the minimum cable TV level, which gives us only local stations for something like $10/month. We use Netflix, both disc and streaming, for nearly all our viewing. Many of our friends have also cut back their service levels, albeit often not as dramatically as we did. But many of them who were paying $100+ per month for TV service are now paying half that or less, and using Netflix for a large percentage of their viewing. This phenomenon is probably more of a threat to cable/satellite providers and networks than those who out-and-out cut the cable.


I finally saw an article yesterday that mentioned the dirty little secret of ratings agencies. The truth is that few investors pay any attention to anything they say, particularly about sovereign and large corporate debt. In fact, many investors have made lots of money by adopting contrarian strategies, buying instead of selling when one of the Big Three ratings agencies downgrades a country or corporation. When S&P downgraded US debt, investors ignored them in droves. Investors remember that these agencies were rating junk mortgages AAA right up to the moment they collapsed, and that these agencies are paid by those who they’re rating. Even a cursory look at how the market rates sovereign debt tells you just how far from reality these agencies’ ratings are, and just how little attention the market gives the ratings.

Based on yields and the free-market price to insure sovereign debt, for example, Germany is a worse risk than the UK, which in turn is a much worse risk than the US. In fact, based on market behavior, US debt is the only major sovereign debt that should rate AAA, with Germany and the UK two or three steps below that, and France lower still.

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Wednesday, 13 July 2011

08:55 – When I started using WordPress, I decided to try using topic-oriented posts for a couple of weeks to see how they worked out. As far as I’m concerned, they’re not. With my old static weekly pages, I’d often post a short update during the day, sometimes only a sentence or two. That’s awkward with topic-oriented posts, not least because it makes it difficult for readers to keep track of comments.

I thought about creating one post per week and updating it daily, but that would be extremely awkward both for me and for readers. So I decided to go to day-oriented posts, one per day, or at least one per day that I post anything at all. I’ll try this for a week or two to see how it works out. If it works better than the topic-oriented posts, I’ll just continue doing it indefinitely.


The Euro crisis continues and deepens. Overnight, Irish debt was cut to junk status, which means it’s now impossible for Ireland to sell bonds in the private markets, as they’d planned to do.

Meanwhile, Italy seems to have fallen off a cliff. Italy had until recently avoided the ire of the bond markets, largely because although its debt is gigantic, something like €1.8 trillion, its current deficit is relatively small. (Spain has exactly the opposite problem: its debt is relatively small, but its current deficit is huge.)

Although Italy is striving mightily to address its economic problems, the best they’ve been able to come up with in austerity measures is a proposal to reduce the current deficit by €10 billion per year for the next four years. So, they currently owe about €1,800 billion, and they propose to reduce current deficit spending by €10 billion per year? That means they’ll still be spending more than they take in, thereby increasing their total existing debt.

For Italy, the elephant in the room is that a huge chunk of its debt, more than €200 billion, comes due next year and will have to be refinanced if Italy is not to default. The chance that Italy will be able to refinance €200 billion privately is nil, which means they’ll need a government bailout. The problem is that the EU can’t afford such a massive bailout, particularly coming on the heels of bailouts for Greece, Portugal, and Ireland.


The reaction to Netflix’s massive price increase has been uniformly negative. When I read the announcement on the Netflix blog, there were something like 3,800 comments from subscribers. Reading only the first page, it seems that they’re about 98%+ negative, with most posters threatening to drop Netflix.

And do what? It’s not like there are any good alternatives. Some people threatened to return to cable TV. Yeah, right. To avoid a price jump from $10 to $16/month they’re going to sign up for cable TV? For $16/month they’ll be lucky to get basic cable.

Many mentioned Amazon Prime streaming, so I went over to take a look at what Amazon had to offer. Not much. I checked the first ten titles in our Netflix instant queue. Amazon had none of them. So I checked 11 through 20. Amazon had none of them, either.

Thinking that maybe there was little overlap between Netflix and Amazon, and that Amazon might have a bunch of titles that weren’t available on Netflix, I started checking Amazon streaming by categories. Nope. There was nothing there that we hadn’t either already watched or had in the Netflix queue. Eyeballing it, I’d estimate that Amazon has maybe 5% of the titles that Netflix does.

The only place that Amazon seemed to have some advantage was in recent movie titles, which Barbara and I pretty much don’t care about. It seems that Amazon prime must appeal to people who like watching new stuff. We prefer watching good stuff, regardless of its age.


09:30 – Boy, am I glad that I decided to use USPS instead of UPS for shipping kits. Yesterday, UPS delivered a box that was supposed to contain eight dozen Sharpie markers. It looked like the UPS truck had run over the box before it delivered it. Barbara found it when she was taking Colin out after dinner, and shouted back to me that there was a really crushed up box on the front porch.

I suppose the good news is that 92 of the 96 markers were actually in the box. The bad news is that the box was crushed and beaten to a pulp and apparently leaked four of the markers. Not surprising, since of the eight Sharpie boxes inside the shipping box, six of them were crushed open and I had maybe 30 Sharpie markers rattling around loose in the shipping box. Fortunately, the remaining markers appear undamaged.

Then this morning I got email from UPS, with the heading “UPS Exception Notification”. In the body of the message, it explained the reason:

Exception Reason: MECHANICAL FAILURE OCCURRED

In other words, the shipping box must have broken (or been torn to shreds by some UPS machine), scattering my eight dozen 9V batteries all over the floor at some UPS site.

This is by no means the first and second time UPS has done this on my shipments. It happens pretty regularly. I’m not sure why, because it almost never happens with USPS or FedEx.

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Huge Netflix price increases

A couple weeks ago, I dropped our $20/month 3-discs-at-a-time-plus-unlimited-streaming plan to the $10/month 1-disc-at-a-time-plus-unlimited-streaming plan. I just got email from Netflix telling me that the cost for that plan will skyrocket by 60%, to $16/month, as of 1 September.

Our old plan will jump from $20/month to $24/month, a 20% price increase. For $20/month, we can now get streaming plus 2-discs-at-a-time, which may be what we change to. Or I may go back to the original 3-at-a-time plan.

Obviously, Netflix has decided that they really, really don’t want to be in the disc business. I just wish they had a $24/month plan for unlimited streaming of everything in their streaming and disc catalog. I’d go for that in a heartbeat.

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Netflix outage

Ironically, just as we changed our Netflix service from 3-discs-at-a-time to 1-at-a-time, intending to watch more Netflix streaming, the Netflix streaming service collapsed. We’re able to see our instant queue on the Roku box, but pressing the button to start a video running does nothing.

The service has been down a couple of days now, with no word on when it will be back. I called Netflix tech support Monday evening, thinking perhaps the problem was on our end but their automated attendant announced that they were experiencing streaming problems and working to fix them. I’ve no idea how widespread the problem is.

I like that Netflix keeps the cost of their streaming service low, but I think they’re keeping it too low. Hastings says that Netflix isn’t in competition with cable TV, which is a battle he knows he can’t win, at least for now. But people commonly pay $75/month or more for cable TV service, and Netflix charges only $8/month for streaming. I think they could bump that to $20/month or even $30/month without scaring the cable TV companies too badly, and without losing many subscribers. In fact, they’d probably gain subscribers, because that extra revenue would allow them to buy rights to a lot more streaming content.

With about 30 million subscribers, I suspect that at $30/month Netflix could buy streaming rights to nearly everything they now carry on DVD, with the possible exception of current seasons of a few popular TV shows. At close to a billion dollars a month in revenue, Netflix would become an 80o-pound gorilla. They’d have the clout to negotiate streaming rights for just about any content. Just as important, they’d have the clout to buy enough legislators and judges to prevent broadband companies from throttling their customers.

Eventually, Netflix could introduce tiers. For another $30/month, for example, Netflix could offer several channels of live sports, which is the Holy Grail for a streaming service. They’re also in an ideal position to offer pay-per-view events and first-run movies, and they could introduce a purchase option as well. I suspect all of this is on Hastings’ to-do list, and I suspect we’ll see the first signs of these new Netflix offerings by 2012.

I have no doubt that Hastings’ real goal is to become the content provider of choice, turning the cable companies into providers of dumb pipes. Hastings denies this, of course, because he’s still vulnerable to cable companies. But the cable companies are fully aware of the threat, and doing everything they can to nip it in the bud. I’m betting on Hastings.

 

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