Update on Gamefly Complaint With USPS That Netflix and Blockbuster Get Preferential Treatment

A complaint filed in April by Gamefly that states that Netflix and Blockbuster are receiving preferential handling of DVDs is currently waiting on the US Postal Service to respond to discovery requests: 

"The Postal Service seeks additional time to respond to the GameFly Motion because it has “been unable to turn its attention to the arguments presented by GameFly” due to constraints raised by “responding to the large number of discovery requests … filed by GameFly.”  Id. at 2.4  It contends the issues raised by the GameFly Motion may affect third parties and may set ground rules for non-public treatment of proprietary documents beyond those immediately at issue.  The Postal Service seeks an extension of an additional 17 days from the date its response to the GameFly Motion was due, until October 19, 2009."

The original Gamefly complaint and the response by the US Postal Service resulted in a number of requests by Gamefly for information regarding the US Postal Service's relationship with Netflix and Blockbuster. The prevailing theme of the filings is that Gamefly believes that Netflix and Blockbuster discs are manually processed to prevent breakage, that Gamefly discs are being stolen, and Gamefly wants the same treatment as Netflix and Blockbuster:

This relief should include, inter alia, an order prescribing the same prices and terms of service for GameFly, including the same degree of manual processing, that the Postal Service provides to Netflix and Blockbuster.   GameFly reserves the right to propose additional forms of relief as the evidentiary record justifies.   

The US Postal Service responded that Gamefly could solve their problem by changing the mailer:

Count I accordingly fails because all DVD mailers are not equal.  Gamefly could get the inbound flats automation handling it wants by changing its mailpiece, and Gamefly in fact receives at least similar handling as other DVD mailers, after allowing for processing stream distinctions. 

Gamefly filed a motion that requests information about "Netflix-only" mailbox slots, and discovered a directive that ordered post offices to take down the "Netflix-only" slots and signage:

Second, the Postal Service thought that the problem was widespread enough two years ago to issue a directive purportedly requiring the “immediate” elimination of Netflix-only mail drop slots: 

In an effort to accommodate Netflix mail, some offices have created  special mail drops and signage for Netflix returns.  This is not an authorized use of mail drop slots and it has legal ramifications for  the Postal Service.   

Action Item: 

□  ALL Post Offices that have implemented Netflix return mail slots must remove the signage immediately. 

This case is an interesting look at how DVDs are processed, and you can follow the filings on the Postal Regulatory Commission website. 

Comments

[Rube]

The post office in Boerum Hill, Brooklyn has apparently not received that directive. There is indeed a Netflix only slot - something I have always thought rather odd.

I believe Gamefly has a VERY good case here. This is a case of bureaucrats far away from the reality of mail processing. While they may believe Netflix and Blockbuster are not getting preferential treatment, the reality is that they most assuredly are.

USPS should be seeking a settlement. The further they get into this case, the more they are going to end up being embarrassed. If if a quasi-governmental agency is capable of that...

[Kathy]

I get both, the Netflix and the Gamefly. I agree that I get Netflix much faster than Gamefly.

[clerk in MO]

Working in a processing plant, I see Blockbuster and Netflix. Blockbuster runs fine in the DBCS machines. Netflix on the other hand are just terrible. The design of the envelopes are not very compatible with the machines in which they are run. Most of those will reject and end up running through the machine several times only to end up going straight to the stations to be sorted by hand. Therefore wasting time and money. They could stand to adjust their quality of envelopes to be put in the DPS mail.

[Don]

Funny thing is manual clerks complained that they had so much netflix to go through. If not for netflix they wouldn't have had much to do. But, oh yeah, netflix DEFINITELY receives preferential treatment. Always have.

[Clark]

As a mail carrier, when I come back off the street with mail I picked up, there are three buckets to place the mail in: one for Netflix, one for blockbuster, and one for everything else. If thats not preferential treatment, what is it.

[Edward R Murrow]

Only the most naïve among us would think that Netflix hasn't received preferential treatment from the USPS. Why else would Netflix have hired Bill Henderson, an ex-postmaster as the Netflix COO?

And since we have no regulation or watchdog groups in this country anymore, we all have to grit our teeth and take it.

You just can't make this sort of government/private sector corruption sh!t up!

I for one, am so sick and tired of this AIG-type illegitimate personal gain bull-poop.

[BoB]

If you read the post by "clerk in MO" you will see that is the reason NF & BBO discs are separated. While it saves USPS time it does help NF & BBO in that in cuts down on damaged discs.

Is it fair? Well, it's not being done as a favor but it may give them an advantage. Gamefly may have a point. It only takes a carrier a few seconds to throw the discs into a separate tub but it cuts down on processing time greatly when they hit a GMF or sort facility.

It's the USPS trying to maximize their labor and production time.

BTW, if you are so tired of this stuff and this country Edward R Murrow, just move elsewhere! No one is forcing you to live in this country! That's the beuty part - you are free to go anywhere you wish! So go! Manuel #2!!!

[Netflix Guy]

I might be thinking about this all wrong but why not just separate all digital media and be done with it. I mean as a whole not like a box for netflix and one for gamefly an so on. I mean all digital media in one box. That way everyone gets the same treatment. Of course they would have to work out the details, but it sounds far to me. What do you think?

[marsha]

as a rural carrier coming back to an empty office, i have been told to separate the Netflix out into own tub for manual sorting at plant.

[frank22]

It is normal to take good of a good customer. Netflix and BB I am sure are helping to pay the bills. Nothing wrong about it. Good to see the USPS NOT working like a government agency. You eat out at the same restaurant every day and spend some coin, you get the freshest bread, and hopefully your fries are hot.

[David]

I really have nothing against this preferential treatment thing. Mainly because it saves the post office time and money when it comes to the sorting of mail, and in times that the post office is losing a lot of money, this is very important, so I don't really have any problems with this.

[BP]

How many discs per month does Gamefly ship? How many do Netflix and Blockbuster ship?

Well, there you go then. Gamefly are a horrible company to begin with. Maybe they should care more about bettering their service than complaining about preferential treatment.

[Seth]

Frank22 makes a solid point.

However, if USPS is doing it, then they shouldn't deny it. Additionally, it's against postal regulations to do it.

So either the regulations should be amended or they shouldn't do it.

Based on these comments, just on one blog, USPS is in deep trouble as I suspected in the first comment. Gamefly litigators are surely reading this page and high fiving each other.

[Bill]

BBO and Netflix have distinctive mailers (envelopes). The volume of them and easy recognition of the mailers makes it easier to isolate them, as sort of pre-processing. Any judge or arbitrator involved with this litigation could actually go to the post office and see for themselves how this all makes sense. So sorry Gamefly, it is not preferential treatment, it is just cost efficiency.

[Jerry]

There are alot of good points posted. We were told to put netflix in a tray but that we all add the blockbuster and gamefly disk in the same place. the gamefly disk mailer seems larger than the other two. The BB mailer is the best and it is often in DPS, netflix is usually never in DPS and the gamefly mailer is to large to put in the DPS. Lastly I very rarely see gamefly disk in the mail.

[Danny]

Gamefly goofed up. They just had to hire some ex postal execs like that dirtbag philandering ex district manager out on the left coast. They could have walked postal workroom floors issuing directives too!

[P.O. Rudy]

Give Me A Harder Problem: Answer/Solution... develop and/or patent a user-friendly envelope that allows your envelope & product to sort through our Mail-Processing & DPS Machines without a hitch...and, you'll be 'light-years' ahead of Netflix and Blockbuster...! Next question...???

[Knyte]

Why doesn't Gamefly talk to AOL regarding disc shipping. I used to (as I am sure many of you did,) receive 3-5 AOL trial CD-Roms a week in the mail. I don't recall ever seeing a single one damaged. (At least before they reached my hands.)

[ZC]

If GameFly slows down my Netflix discs with this complaint, do they really think that endears me to them or makes me want their service? Instead of complaining that another company gets preferential treatment, why not work to improve your mailing procedures and get more processing stations in more cities?

As it stands, GameFly doing this is a negative strike against them.

[Ajf 4]

Luckily I read your blog, like your blog, this is the one I've been worried, thank you.

[BoB's Conscience]

BoB, if you had a clue you would know that a Charlie Rangle Sponsered law requires additional taxation on your assets if you decided to leave the country. These are monies and assest you already paid taxes on.

So while you say, just pick up and leave, it really isn't that simple.

Also, you sound like a person without common sense as the sensible thing to do is vote for politicians who vote for equality and fairness, not the party line. Are you a liberal democrat?

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