Archive for the ‘Family matters’ Category

Rental video stores ponder their reason for existing

Sunday, December 22nd, 2013

Many happy returns: Prepaid mailer for Rakuten DVDs

Many happy returns: Prepaid mailer for Rakuten DVDs

It’s coming up to that time of year again, the long post-Christmas New Years break when days not spent in the company of relatives you can’t stand are wiled away in front of the television airing programs you can’t stand even more. Traditionally, that makes it one of the biggest seasons for the rental video business; or, at least, it used to. The industry has been in a progressive slump since it peaked more than a decade ago.

According to industry group Japan Video Software Association, the number of stores in Japan peaked in 1990, when it stood at 13,529. In 2012 there were only 3,648, a drop of three-fourths. In terms of revenues the biggest year for rental videos was 2004, when the industry took in ¥258.4 billion. It has decreased by about ¥100 billion since then.

A recent article in the Mainichi Shimbun quoted a 41-year-old owner of a rental video store in Yokohama who said that he used to run two other shops but had to close both. There’s not enough demand for him to be able to afford all the new movies coming out on DVD or Blu-Ray, and it’s new titles that have driven rentals in the past. He remembers the days when he could charge ¥1,000 for a new movie for two days, but since then prices have dropped drastically, mainly due to competition from major national chains.

The main culprit, of course, is the march of technology. Though on-demand streaming and downloading isn’t as widespread in Japan as it is in the U.S., the big three mobile phone carriers have started offering movies that can be streamed on TV sets at home. The number of titles right now is only about 7,000, but even at ¥500 per title, it beats trudging down to the local rental store, if one actually exists within trudging distance.

The problem with on-demand is that accessing such services requires a certain level of computer literacy that tends to decline the older the customer is. This is always a problem for IT service companies but may be the last bastion of revenue for rental video stores. An editor from the industry magazine Video Insider Japan told Mainichi that the strategy from now on will be for video stores to target “customers in their 60s and 70s.”

But only the major chains can afford to do that, apparently. Between them, Tsutaya and GEO account for 70 percent of all the rental video stores in Japan, and because they can afford to buy as many new titles as they want, they price smaller stores out of business. Tsutaya, however, is a franchise operation, and individual owners may find it harder to compete against GEO outlets, which are company owned. Since Tsutaya franchise owners can set their own prices, some are being forced to match GEO’s in order to compete, while others are keeping prices higher. It all depends on location. Also, Tsutaya has made exclusive deals with some distributors that give them a distinct advantage. For a time, they were the only company that had permission to rent out “The Amazing Spider-Man.”

However, in order to attract this older cohort that is now the main demographic for rental videos, chain stores have to go to them rather than the other way around. Both Tsutaya and GEO offer plans wherein customers pay a set monthly fee for a certain number of disks that are delivered directly to their homes. This system has been available for about 10 years, and the only real innovative change has been the addition of so-called spot rentals, meaning members can order videos a la carte without having to sign up for a plan. Right now, GEO is offering some titles for as low as ¥80, with Tsutaya offering ¥100 (both for limited times). What’s interesting about spot rentals is that, depending on which videos you rent and how many, they can be cheaper than monthly plans.

GEO has three monthly plans. The standard plan is ¥945 for four DVDs. After that there’s an 8-disc plan for a little less than ¥2,000, and a 16-disc plan for a bit less than ¥4,000. When you sign up for a plan you get the first month free, but the real difference is in the delivery fee. Whether your order is a spot rental or part of a monthly plan, the fee is ¥300 for up to seven discs at a time. The fee is ¥500 for orders of 8-16 disks. Regardless of the size of the order, the time limit is 10 days from the day the customer receives the disks. As with all such home delivery systems, the company includes a prepaid envelope for returning the discs. However, it’s important to note that GEO does not charge a late fee for people who belong to monthly plans. Late fees for spot rentals are ¥157 a day.

But GEO and Tsutaya now have to contend with an upstart: Rakuten. The Internet mall’s inventory isn’t as deep or wide as the other two companies, but its spot rental system is in many ways cheaper and more amenable to the way most people rent videos. Rakuten also charges ¥300 for delivery fee, but you can only request up to two discs per order. After that the delivery fee increases in increments of ¥200. In that regard, GEO would seem to have the advantage, but actually not. Brand new titles are priced the same as GEO’s, around ¥300, but older titles are usually priced at around ¥50. And titles that are more than, say, two years old can be as cheap as ¥10 or even ¥5.

Like GEO, the time limit for a Rakuten spot rental is 10 days, but if you see two discs over the course of two days you return the discs and can immediately order two more. They usually arrive within a day of placing the order. For sure, the delivery fee for GEO is cheaper, but if you took full advantage of the fee and ordered 7 discs, you’d still have to watch all of them in less than 10 days, and even at ¥80 per disc, they aren’t as cheap as Rakuten’s.

Rakuten’s system is especially rational if you want to watch full seasons of TV series. Last month we watched the second season of “Homeland,” which, because it’s relatively new, cost ¥280 per disc, with two episodes per DVD. But we also went through the first two seasons of “Mad Men,” which were only ¥5-¥10 per disc, also with 2-3 episodes per disc. And they always had the DVDs we wanted in stock. It beats trudging down to the rental video store.

Collecting organizations try to give credit where it’s due, don’t always succeed

Thursday, November 7th, 2013

In a recent series on credit information reporting, the Asahi Shimbun explained the plight of a young Kanto woman who had applied for a credit card last March. The card she was interested in offered discounts at selected stores and could be used as an IC card for public transportation. It also had an attractive point system. Almost all her work colleagues had the card and since her financial particulars were the same as theirs she didn’t think she’d be turned down, but she was and the rejection confused her. She had one other credit card, which she had always paid on time. When she called the credit company that refused her they said they couldn’t give her the reason for the rejection.

A gift campaign notice that comes with a monthly credit card statement

A gift campaign notice that comes with a monthly credit card statement

Then she received a letter from Softbank Mobile, her cell phone service carrier, which said that due to a mistake her payments had been reported to a credit information (CI) company as being delinquent. The period of her false delinquency, she realized, fell during the same time that she applied for the credit card. In the letter Softbank said that it had corrected the mistake with the CI company, and when she applied for the card again after a while, she was approved, but when she tried to find out why they had changed their mind the company again said they couldn’t tell her.

Such situations are not uncommon, but since credit card companies are not obliged to give reasons for rejecting or accepting customers, most applicants have no idea that these problems even exist until it’s too late.

In Softbank’s case, the carrier was actually alerted to the “mistake” last March when customers pointed it out to them. The company investigated the claim and found that between December 2012 and March 2013, about 63,000 customers were reported to credit information companies as having been late with their payments, even though they hadn’t been. The reason for the mistake was fairly complex, and common enough for such a reporting system. All of the affected customers, including the woman profiled by the Asahi, had purchased their terminal devices — meaning their cell phones — through a revolving credit plan. Moreover, they accumulated points over time that could be redeemed as credit through the revolving payment system.

Softbank reported all this information to the relevant CI collecting company, but because of a computer programming redesign that took place late last year the settings that translated points into credit did not work correctly, so people who had paid for their cell phones through points were incorrectly flagged as being delinquent as far back as 2009.

When a financial institution screens someone to determine if the person is credit-worthy, they use CI from various sources: the Credit Information Center (CIC), which mostly works with credit card companies and revolving payment plans; the Japan Credit Information Reference Center Corporation (JICC), whose members are consumer loan outfits; and the Japanese Bankers Association, which collects information related to bank loans. When someone applies for a credit card or a loan the institution requests credit history information from the relevant organization. All lenders and retailers who offer revolving payment plans are obliged by law to report credit histories of customers to one of these CI organizations.

CI includes personal data, such as name, address, birthdate and nature of the transaction; as well as “payment information,” including payment trends and the balance of the account. As long as the customer pays on time, no information is recorded, but when the customer misses a payment the CI collecting company receives a notice of there being an “unpaid situation.” If that situation continues for 3 months straight, the payment situation is reported as being “irregular,” which means the customer is placed on a blacklist.

Being on a blacklist does not necessarily mean that the person will lose his or her credit card or be denied a loan. The financial institutions who request this information for screening purposes can interpret it however they want, but generally if an irregularity is persistent the person’s credit history will be tarnished. Information about irregularities stay in the customer’s credit history for five years, even if the loan or credit bill has been paid off. However, if the irregularity is the result of a mistake on the part of either the company reporting the credit information or the company collecting it, then it is immediately removed from the record.

The problem is that often such mistakes don’t come to light, and while credit reporting companies and lending institutions or credit card companies are not obligated to reveal reasons for rejections to applicants, the credit collection companies are. For instance, if you have a question about your credit card history you can call CIC and, for a fee (¥500-¥1,000), they will give it to you. It’s the same for the other two organizations, depending on where you have borrowed money. An expert in the Asahi article recommends that anyone planning to take out a large loan check beforehand with CI collecting organizations to find out whether or not there may be problems.

The Asahi also reports that an increasing number of young people are showing up on blacklists due to their phone bills. CI, it should be noted, has nothing to do with paying utility bills, a matter that is strictly between the utility and the customer. In the case of cell phones, CI is only reported on people who have bought their phones through revolving payment systems, which are usually attached to phone bills.

The problem here is that many young people forget that they are paying back money loaned to them for their phones. They think that they are paying their phone bill, so if they’re late with a payment they simply have to pay a small penalty. They don’t realize that their credit history is being damaged in the process. In many cases, in fact, it is their parents’ credit history that’s being damaged, since some parents cosign for their kids’s cell phones. It gives them more reason to monitor their cell phone usage.

Where there’s a will: Attitudes toward inheritance change

Wednesday, October 2nd, 2013

Who'll be the next in line?

Who’ll be the next in line?

About a million people die every year in Japan, and 10 percent of them leave wills (yuigonsho). That’s a smaller portion than in the English-speaking West — the BBC says about a third of British adults have wills and USA Today reports 59 percent of American baby boomers have written them — but it’s still larger than other Asian countries (about 1 percent in South Korea) and the number is growing every year.

Legal experts advocate wills as the only effective means of properly disposing of one’s assets after death, but in Japan they’ve traditionally been seen as disruptive. Japanese law outlines methods of inheritance and even stipulates shares for specific family relationships. But family ties have been strained in recent decades owing to shifting social demographics and economic trends. A recent article in the Asahi Shimbun reports that more and more people are dying without any clear beneficiaries. In 2012, ¥37.5 billion left behind by people who died was taken by the government because the deceased had no family willing to claim the body and the person’s property. According to the Supreme Court, this amount is three times what it was a decade ago.

When a person dies without spouses or children, or when those heirs have forfeited their right to the deceased’s assets, the proper court appoints an administrator to dispose of the estate. If the deceased had debts, the administrator repays them out of the available assets. If the deceased had a caregiver, the administrator may offer the person part of those assets. But for the most part the unclaimed money and proceeds from property goes to the central government.

One Yokohama lawyer in the Asahi article talks about his experiences as an administrator, which starts with going to the home of a person who has just died and “cleaning up.” He says he often finds large amounts of cash hidden behind or inside furniture, and now conducts seminars where he tells middle aged and older people about the importance of wills, partly as a means of showing their gratitude to those who helped them in life, regardless of whether or not those people are relatives. When the reporter talks to people who attend the lawyer’s seminar, some admit to having no contact with family and one says he feels compelled to draw up a will because he’s afraid of what might happen to his legacy if it all goes to his irresponsible son.

People in the West who don’t write wills are usually intimidated by the cost of lawyers or just plain scared of thinking about death. In Japan, while speaking of death is still a taboo for most people, the scarcity of wills can mainly be attributed to ignorance. The lawyer in the Asahi article implies that the authorities don’t promote wills because they make money when people die without heirs.

A recent trend that has boosted the status of wills is “ending notes.” Popularized by a hit 2011 documentary about a dying man’s last days, ending notes are books that help people think about their deaths. They explain different processes and often have diary-like features so that readers can write down their thoughts about death and what they want in terms of late-term care, a funeral and the disposal of their remains.

Ending notes actually compel readers to think about their lives right now by making them face the inevitability of death, and so rather than push away such thoughts they force the reader to consider measures such as DNR (do not resuscitate) declarations and last wills and testaments. Ending notes have also been commercialized to a certain extent, and some non-profit groups now hold seminars on the subject of shukatsu (final activities). Funeral homes participate in ending note plans and some banks even have programs to help people think about what they want to do with their assets after they die. According to a survey of people over 60 conducted by Research Bank, 49 percent said they wanted to write ending notes.

But ending note diaries are not legal documents. A will needs to be notarized if it is to hold up in court. One reason wills were previously unpopular in Japan is that when they were contested by family members, courts often sided with the plaintiffs, but that isn’t necessarily the case any more. According to one will-writing website, 7,767 wills were notarized in 1966. The number in 2009 was 76,436. Moreover, in 1985, Japanese courts heard 2,661 inheritance-related lawsuits. That number increased to 9,800 by 2008, and in the same year family courts nationwide received 154,160 requests for advice with regard to inheritance problems. More than 70 percent of all legal disputes over inheritance involve assets of more than ¥50 million. Obviously, you can’t take it with you, but older Japanese are now wising up to the fact that they don’t have to let it pass on to people they can’t stand.

Young women’s life preferences acknowledge workplace reality

Friday, September 27th, 2013

Preference or default?

Preference or default?

Social media has been buzzing about the results of a survey released this week by the Ministry of Health, Labor and Welfare. The survey was carried out last March among men and women, both single and married, between the ages of 15 and 39. The results that provoked the most discussion had to do with attitudes toward marriage, or, more precisely, a woman’s role in a marriage.

When asked if they want to be full-time homemakers, 34.2 percent of the female respondents said “yes” or “probably.” And while more women, 38.5 percent to be exact, said they didn’t want to be homemakers, the portion who said they did was apparently higher than people expected, especially now that the government is pushing an agenda to make it easier for women to join the workforce and contribute more directly to the economy.

Some people are saying that these results indicate a regressive attitude among women, but it’s impossible to say from the results that the women who want to be homemakers are being guided by some kind of cultural gender identification.

When men were asked in the survey if they wanted their wives to be homemakers, 19.3 percent said “yes” or “probably,” which implies that the other four-fifths want their wives to work. That’s because they know that a single income isn’t enough any more to support a household, especially one that does or will someday include children.

When the women were asked how much income they thought their husbands should make a month, 40.8 percent said ¥200,000-¥300,000, 24.8 percent said ¥300,000-¥400,000 and a mere 4.2 percent said “it doesn’t matter.” So much for marrying for love.

A more likely reason for this desire to stay at home is a perceived understanding of workplace norms, something the labor ministry didn’t ask about. In a different survey conducted by the Japan Management Association, young men (751) and women (249) already in the workforce were asked if they aspired to be leaders among their colleagues. Of the female respondents, 81 percent said they would rather be “supportive.”

One of the more pressing issues in Japan is the paucity of women managers, a situation that is blamed on implacable male dominance in the workplace. The association analyzes this result as meaning that women value their private lives over their careers. In other words, they don’t think they can raise children or have families if they are in leadership positions. And, in fact, this is still a widely held belief.

Roomba rules with working moms

Thursday, September 12th, 2013

There has recently been a discussion in the Japanese language media about an article that novelist and Nippon Foundation head Ayako Sono wrote for the magazine Shukan Gendai.

Roomba to move

Roomba to move

Sono, who will turn 82 next week, encouraged working women to quit their jobs after they gave birth, not so much because she believes a mother should devote all her attention to her children, but rather because it is “selfish” for working mothers to place such a burden on the companies they work for by demanding they hire them back at full pay after maternity leave. Women who make such a demand don’t understand reality, Sono says. She herself put up with being “poor” when she had her children, relying on her husband’s salary only, and thinks women today should do the same.

Regardless of Sono’s blinkered view of the reality of married life today, the amount of money that working mothers contribute to the Japanese economy is not chicken feed. It’s estimated to be about ¥6 trillion, according to a cover story in the business magazine Toyo Keizai. The Ministry of Internal Affairs and Communications reports that the average disposable income of a double income household is more than ¥4 million a year, while that of a single-income household with a full-time homemaker is about ¥3.6 million.

Moreover, a research laboratory, Dentsu Soken, says that the “direct economic impact” of women who go back to work after giving birth is ¥3 trillion, and the secondary effect of this spending, in terms of added jobs and investment, is worth something like ¥6.4 trillion.

If these women weren’t working they wouldn’t be making that money and thus wouldn’t be spending it, and much of what they spend it on has to do with saving time, because they are so busy with both their jobs and their kids. This waamama (working mother) boom has resulted in brisk sales for three home electronics products that were originally aimed at narrower, higher-income niche targets: washing machines with built-in dryers, dishwashers and robot vacuum cleaners.

It’s the last of these, spearheaded by the American-made Roomba, that has really taken off, and the appeal to working mothers is clear. They simply turn it on and the machine cleans the room by itself, while the mother does other things, like go shopping or play with her children.

The Roomba was originally promoted for seniors, and the price is pretty steep, about ¥80,000, though some discount retailers may sell it for ¥70,000 or even less. The subsequent Japanese copies, made by Toshiba and Sharp, start lower, at about ¥50,000, and are becoming popular, too, but Roomba dominates, with 73 percent of the robot vacuum cleaner market, according to Seed Planning Research. Of course, the household could probably save even more money if the husband chipped in with the housework, but since Sono didn’t talk about that we won’t either.

Build a multifunction restroom and they will come

Wednesday, August 14th, 2013

Room to move

Room to move

The big question for retailers and restaurants in Japan is how to attract seniors, regardless of what it is you sell or serve. One nonprofit Tokyo organization called Check is advising businesses to install so-called multifunction restrooms on their premises and then advertise the fact. Multifunction restrooms are larger than standard public restrooms and can accommodate wheelchairs, and the NPO’s research has found that older people are more likely to patronize a business that has one.

According to a study reported in Tokyo Shimbun, the average family with at least one senior spends four hours and ¥10,000 when they go out shopping, but 20 percent also say they will likely stay out longer and spend more money if they know beforehand the location of multifunction restrooms. The study group extrapolated on its findings and speculated that in terms of time the family would stay out 30 to 120 minutes longer, and spend ¥606 more.

Check, which was founded in 2008, has made a list of some 50,000 multi-function rest rooms throughout Japan, which it provides on its website. The NPO thinks there are about 100,000, and it is providing this information to local governments so that they can use it to promote their areas to local seniors and older tourists.

However, it should be noted that toilets in general are becoming something of a sales promotional tool. The Tokyo Metro subway system actually has TV commercials aimed at women showing how modern and clean their public rest rooms are. Lawson was the first convenience store to declare that its restrooms could be used by the public without the obligation of buying something, since people were so grateful for the service they usually bought something anyway. Most convenience stores have followed suit. And many restaurants explain their rest room facilities on their home pages and Tabelog sites, since many women won’t patronize restaurants that don’t provide separate facilities for men and women.

With refrigerators, bigger is better in more ways than you think

Wednesday, June 19th, 2013

High end: a 603-liter refrigerator with a five-star rating and 244 percent energy efficiency that uses ¥5,500 of electricity a year

High end: a 603-liter refrigerator with a five-star rating and 244 percent energy efficiency that uses ¥5,500 of electricity a year

Over the past decade or so our diet has changed slightly. We almost never eat meat at home and have gradually eliminated most dairy products. Consequently, the volume of food in our refrigerator has decreased over time, and since we bought it in 2002 it is already considered obsolete, inefficient even. Refrigeration technology has improved markedly in the past 10 years to the point that devices made now use as little as one-fourth the amount of energy used by an equivalent sized refrigerator made in the ’80s or ’90s. And since we are contemplating moving sometime in the future we decided it might be a good idea to buy a new, smaller model when we do in order to take advantage of this greater efficiency.

So we went to our local discount electronics store and looked at all the models. Of course, smaller refrigerators cost less than larger ones, but when we looked at the energy consumption specifications we became confused. The bigger the volume of the refrigerator, the less energy it used. In some comparisons the difference was startling. If you look on the inside of the main compartment door of a refrigerator there is a sticker with the pertinent specifications, one of which is the average amount of kilowatts the appliance uses in a given year when operating continuously. We saw one 500-liter model that used only 40 percent of the energy that a 350-liter model used. The manufacturers make the comparison even easier by printing the average amount of money you will pay in electricity for a year on the outside of a given model. Moreover, there are star ratings, from one to five, that indicate energy efficiency in relative terms, with five stars indicating the most efficient.

We asked a salesman if there was a smaller refrigerator that was as efficient as a large one and he quickly said there wasn’t. The difference he said was that larger refrigerators used inverters to control the operation of the compressors in a smoother fashion, while smaller refrigerators used conventional compressors that simply went on and off to control interior temperatures. The inverter, however, also makes the refrigerator itself more expensive. When we said our present refrigerator was 415 liters and that we wanted something smaller, he said rather presumptuously, “I can tell you which size you need.”

Since we aren’t newlyweds and found his manner condescending we decided to look into the matter ourselves. The star system is administered by the Energy Conservation Center of Japan, a government organ, and is based on the energy savings achievement rate (sho-ene taseiritsu) established by the 2006 Energy Conservation Law. The unit used for comparison’s sake is Annual Performance Factor, a means of measuring energy efficiency. In order to come up with an efficiency rating, the ECCJ currently uses “the most efficient product” on the market in terms of energy consumption in 2010. The efficiency percentages on the store sticker are based on APF and thus only indicate relative values. For instance, an energy efficiency finding of 110 percent means that the model is 10 percent more efficient than the 2010 model chosen by the ECCJ as the standard, and which is not publicly disclosed. The stars are more or less a means of making these comparisons even easier. However, comparing refrigerator prices against money saved on electricity bills may require a certain algebraic capability that most consumers don’t possess or, if they do, probably don’t want to bother with.

Conventional compressors, which use electricity and chemicals to cool the interior of the refrigerator, turn off when the desired temperature is reached and then turn on again when the temperature rises above that level. It takes a lot of energy to turn a compressor on. The inverter works on a kind of fuzzy logic principle. It keeps the compressor working all the time but at variable levels, using less energy in the process. It also produces much less noise since conventional compressors tend to get loud when they start up again. That’s why an older refrigerator, or a smaller new one, suddenly kicks into high gear whenever you open the door. An inverter will add at least ¥20,000 to the price of a refrigerator, and according to one website we saw electronics manufacturers don’t think people will buy smaller refrigerators if the price is above a certain threshold, so they don’t bother putting inverters in them.

Of course, some people simply think that the small-big energy-saving paradox is a scheme by these manufacturers to compel consumers to buy refrigerators that may be too big for their homes or their needs, since profit margins rise almost exponentially with the price of the unit. If that’s the case then it seems to be working. Last year, the only household appliances whose recycling rates increased were air conditioners (up 0.8 percent) and refrigerators (2.7 percent).

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