Print 20 comment(s) - last by bah12.. on Apr 26 at 11:40 AM

A two-year battle ends in GameFly's favor

After a nearly two-year dispute, the U.S. Postal Regulatory Commission has ruled that the U.S. Postal Service gave an unfair advantage to GameFly competitors like Netflix and Blockbuster. 

GameFly initially filed the complaint against the U.S. Postal Service on April 23, 2009 after spending the previous 18 months trying to sort the conflict out informally. GameFly claimed that the U.S. Postal Service was charging the video game subscription company more for postage, sorting, and breakage of disc mailings than Netflix and Blockbuster. 

Netflix DVDs are returned in a prepaid, letter-sized mailer that is non-machinable. These discs are often damaged and can cause machine jams, but many Netflix DVD mailers are separated and hand processed by the U.S. Postal Service without a non-machinable surcharge.

GameFly discs, on the other hand, were being damaged due to automated letter processing equipment. To make matters worse, the U.S. Postal Service was unwilling to hand process GameFly's discs, which resulted in an additional ounce charge on all GameFly mail (which is about 1.2 million shipments per month).

According to GameFly, Netflix pays a one-ounce letter rate of $0.44 in order to avoid automated letter processing of return mailers. GameFly, on the other hand, pays a two-ounce flat rate of $1.05, which is a difference of about $730,000 based on its volume. David Hodess, President and CEO of GameFly, noted that this amount "represents more than 100 percent of GameFly's monthly net income in 2011."

The U.S. Postal Service argued that GameFly did not use letter mail and designed its flat pieces to weigh two ounces for machine processing. Also, it noted that GameFly did not have an easily identifiable mailpiece design.  

Now, the U.S. Postal Regulatory Commission has found that the U.S. Postal Service had "unduly discriminated against GameFly." The Commission said that GameFly runs similarly to NetFlix and Blockbuster, and that the U.S. Postal Service has 60 days to establish two parallel rate categories "within First-Class Mail for round-trip DVD mail."

The first rate category is to establish that DVDs sent as presorted First-Class mailers to customers will not acquire a non-machinable surcharge when it is returned to the U.S. Postal Service. The second rate category authorizes that DVDs mailed as First-Class Mail flats will not acquire ounce charges when being sent to and from customers. 

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By Flunk on 4/21/2011 2:16:24 PM , Rating: 4
Does anyone else think that this just means they're going to increase the price for Netflix mailers?

RE: hmm...
By invidious on 4/21/2011 2:29:23 PM , Rating: 3
I switch to steaming only netflix as soon as they began offerit it anyway. The mail order process is a PITA. I am not interested in maintaining a queue, planning ahead what I will want to watch, or waiting in line for new releases.

This is the digital age, snail mail is obsolete.

RE: hmm...
By lennylim on 4/21/2011 2:43:06 PM , Rating: 4
That's a funny typo "steaming" - makes it sound like you're getting only certain categories of movies from netflix :)

RE: hmm...
By corduroygt on 4/21/2011 3:19:17 PM , Rating: 4
You'd have a point if the streaming library had decent content outside of TV shows. That's why combining netflix streaming with $1.50 blu-ray rentals from redbox is a win.

RE: hmm...
By SunAngel on 4/21/2011 5:16:23 PM , Rating: 2
not for me. with netflix i can watch 12 blu's a month for $12 and get unlimited streaming. with your way, it would cost me $26 a month. i am more than willing to cue ahead and wait three days to get another movie to save that $14.

RE: hmm...
By RyuDeshi on 4/21/2011 7:11:54 PM , Rating: 2
Do you send them back the same day you get them? Theres always a day between when I send them back and when a I receive the next disk on my list.. so I would only be able to get 8-10 at best.

Still better than redbox I suppose.. especially after factoring in gas and time spent to go back and forth to rent and return them.

RE: hmm...
By SunAngel on 4/21/2011 9:22:46 PM , Rating: 2
sorry about that. i meant to say 8. when the mail runs smoothly i get mine on Mondays and Thursdays. but i did the streaming only for awhile and the redbox. it was working okay until redbox became subject to the same 30 day new release wait that netflix goes through. yeah, like you i said previously and you agreed with you still save (spend less) money simply staying with netflix. which by the way i am nearly completely happy with.

and one last thing. since the streaming only plan came about my 'theft rate' has gone down to zero. don't ask me why i just lost interest in ripping. maybe its the easy of simply using my blu-ray player to watch netflix movies, maybe its the $8 value, maybe im BORED to death waiting for movies to rip.

RE: hmm...
By biohazard420420 on 4/24/2011 12:54:58 PM , Rating: 2
Thats what good for me I work in a convience store that has what I call ghetto redbox, essentially the same thing dollar the first night 1.49 every day after but it gets the new releases same week they come out tuesday we have em by friday.

RE: hmm...
By kmmatney on 4/21/2011 8:28:00 PM , Rating: 2
The problem with me is that some months I'm extra busy, or traveling, so I don't have time to watch movies - for people woh's schedule can change, RedBox works well.

RE: hmm...
By ajoyner777 on 4/22/2011 8:34:53 AM , Rating: 2
...or you could just download the torrent and get it for free....j/k :p

RE: hmm...
By theslug on 4/22/2011 4:26:44 PM , Rating: 2
There is a lot of good content in their streaming service. It's as if you wrote this comment back in 2008 or something.

RE: hmm...
By bodar on 4/24/2011 7:58:02 AM , Rating: 2
Most of their really good streaming content is TV shows though, aside from some of the more obscure movies. They don't get that many new movies, aside from the Starz ones, so if you want a lot of new releases you need to go with DVD/Blu-Ray. I have seen some good movies on demand, but it's mostly stuff I've missed.

RE: hmm...
By jeepga on 4/21/2011 6:02:13 PM , Rating: 3
That'll be all fine and good when their streaming library is a little more complete and has more recent movies.

RE: hmm...
By semiconshawn on 4/24/2011 3:51:43 AM , Rating: 2
YES. I decide what to watch when I sit down to watch it!! Ill get it on netflix, zune or a torrent. I dont even check my mail but once a week tops. Bills are all paid online, banking statements online, pay stubs online, w2 is even online what the hell do I even need the mail for? Coupons? Oh wait my mailman makes $65k a year and he is cool, he comes over.........

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