Gamefly: we’d like the same deal Netflix has!
In a complaint filed with the Postal Regulatory Commission, online video game rental service Gamefly accuses the US Postal Service of providing preferential treatment to Netflix and Blockbuster. The company says that its DVD’s are being damaged at an unacceptable rate despite the fact that the mailer has agreed to use sturdier mailers, and as a result pays higher postage fees per piece than the other companies. (The company also notes that a significant number of its DVDs are stolen- 19 postal employees have been arrested for stealing GameFly DVDs).
In addition, the company points out that Netflix mailers are routinely processed manually:
GameFly is not the only mailer to experience significant DVD breakage rates on automated mail processing equipment. In response to this phenomenon, the Postal Service has adopted a practice of manually culling out the DVD mailers of two high-volume shippers of DVDs, Netflix and Blockbuster, for special processing.
A report by the Postal Service’s Office of Inspector General in November 2007 found that 70 percent of the two-way DVD mailers from one unnamed DVD rental company received manual processing for this reason. USPS Office of Inspector General, Audit Report No. MS-AR-08-001, Review of Postal Service First-Class Permit Reply Mail (November 8, 2007).
The Postal Service’s practice of giving manual processing to DVDs from certain large mailers has continued since the OIG report. On routine visits to multiple Postal Service facilities, GameFly’s employees have observed that a large percentage of mail pieces from Netflix and Blockbuster are culled from the automated letter processing stream.
GameFly has asked the Postal Service to give GameFly’s DVD mailers processing on terms and conditions comparable to the terms and conditions offered to two larger DVD mailers, Blockbuster and Netflix. The Postal Service has not done so.
The issue has taken on additional urgency for GameFly because of Blockbuster’s entry into the game rental market:
Until recently, none of the larger-volume DVD rental companies offered video games. On February 11, 2009, however, Blockbuster, which hitherto had offered only movie DVDs (which GameFly does not offer), announced that Blockbuster was expanding its DVD rental service to include video games in the second quarter of 2009.
As a result of this initiative, GameFly now faces direct competition from a rival that is larger and longer established—and which, because of the preferential treatment given by the Postal Service, enjoys a substantial cost advantage in the distribution of its DVDs to consumers.
The company says it has attempted to work out an agreement with the Postal Service, but that the USPS has ignored its requests to discuss the issue.
April 25th, 2009 14:45
Yep, outgoing Netflix have to be seperated into their own 1/2 tray at our small post office. They are however coming in our DPS (that started about the 2nd day of our mailcount — but at least it has continued since then). We used to seperate by letter and flat, now it is by stamp and “other” postage.
April 27th, 2009 01:56
In our office, ALL CD and DVD mail is supposed to be placed in trays before being sent to the plant. We have one for Netflix and one for all others.
May 9th, 2009 04:13
Netflix and blockbuster get a abou4 manhours daily to face tray and sleeve. Operators get in trouble if they gget through their machines! while gamefly is sent with metered flats at best, if it gets into AFCS ist gets rejected and recycled over and over…. I’ll bet half of those braek. maybe 3or 4 a day and those games cost 70 dollars! BUT they do get discounted postage!!!!
May 11th, 2009 05:31
It’s amusing. We separate Netflix mailers we pick up during the day.
And then we deliver Netflix mailers in the DPS that are often damaged.
The right hand doesn’t know what the left is doing.
May 16th, 2009 17:39
I don’t think I’ve ever heard a customer who wasn’t happy with the Netflix, Blockbuster, or Gamefly services or the P.O.’s handling of them.
May 27th, 2009 17:26
Gamefly should take their business to ups or fed ex. no one is stopping them.
June 7th, 2009 18:42
At the North Houston Mail Processing Center, Neither Netflix or Blockbuster DVDs are seperated from the automated equipment. The Supervisors must have missed this memo cause they tell us to run them on the DBCSs.
June 8th, 2009 20:36
We have always seperated the Netflix seperately. For about three weeks, sometime around April,we were told to put them in the outgoing mail and not handle them seperately. That didn’t last too long. We now have to hold out only the Netflix and tray them by themselves. Netflix needs to change the packaging they use for thier disks. We are providing special service for something they don’t pay for. The postal service is going broke and still give certain mailers special treatment and they don’t have to pay for the special handling.