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Noah

No surprise here. Netflix knows what they are doing and works because of a good business model. Gamfly doesn't learn from Netflix, and thus waste time on lawsuits like these that just prove how inept they really are.

BoB

I think this part sums it all up:

"Belair also estimated the volume of DVD mailers: Netflix: 97%, Blockbuster: 2%, and Gamefly: 1%."

Companies will always take care of their better customers - always been that way.

Perks for top spenders, rooms and drinks to Vegas high rollers, personal shopping assistants, etc.

Seth

Before you decide that USPS just slam dunked their case, consider the following:

- Many of the things Netflix does which makes it easier for USPS almost certainly comes from their long relationship in which USPS advised Netflix on how best to ship their mail pieces. Gamefly comes off sounding uneducated because, in essence, they are. But it took Netflix many years to refine their system.

- It's in the interest of USPS to work with Netflix - they are a massive customer. Even if there wasn't a financial incentive, USPS has to take their gazillion mailers anyway. Many forces worked towards making Netflix flow through the mail system better.

- Finally, I'm sure some of the things Gamefly is finding out were not immediately made available to them. Their experience with USPS is probably like anyone else - USPS is not the most transparent of operations. It may have taken suing them just to find out why they were having trouble with their mail pieces.

I don't work for USPS, Gamefly or Netflix.

BP

@ Seth

I bet you own an iPhone 4 and insist there's no Antennagate too, don't you?

Ultimate Outsider

Wow, Netflix really knows what the hell they're doing. I didn't realize how much of the efficiency in Netflix mailings was directly due to conscious decisions Netflix made in its packaging and operations. Clearly they have learned a lot in their many years in the business. Unfortunately (for them) the cat's sort of out of the bag now.

CJ

My guess is that early on, Netflix simply hired either a knowledgeable consultant, or a ex-USPS manager, who knows how this bureaucratic labyrinth functions, and set up the USPS-Netflix interface system to minimize costs to both parties.

Luna Saisho

I think that this whole thing could have been avoided if the USPS worked with GameFly to streamline and improve their shipments as they did with Netflix. I use both services, and there is no doubt that Netflix discs come and go at a MUCH faster rate then game discs from GameFly.

From the article, I learned that GameFly does a number of small things that increase handling and add time. Perhaps GameFly should change these things, now that they know, so their discs will be processed better?

BP

Why is the USPS the villain here? Is it up to the USPS to spend their time and money helping a company increase their bottom line? Is it? No, seriously, one of you schmucks needs to answer this question: is it?

I damned well bet Netflix DID hire an ex-USPS postmaster or the likes. Did GameFly? Why not?

Businesses aren't charities. You would think that a company whose entire business model revolves around COMPLETELY, UTTERLY relying on another entity for a service would want to invest in someone who...might help them make the most of said business relationship.

Dumbshits.

E


Netflix hired a former USPS postmaster general back in 2006 as their COO. That's how you get it done. Here's the link from hacking.

http://www.hackingnetflix.com/2006/01/netflix_hires_f/comments/page/2/

RJA

Netfix hired Bill Henderson as soon as he retired from being the POSTMASTER GENERAL! All he had to do was point them to, and hook them up with the proper high level postal people. Brilliant!!!

scJohn

Interesting insight into how things work behind the curtain. The one fact that really stood out was that NF picks up from 130 USPS locations. I had always assumed that with NF 58 locations they would be picking up from 58 USPS locations.

It seems that NF took the time to find the best way to move their mailers through the USPS system. GameFly, and probably BB, did not.

Kuskokwim

I thought I was saving Netflix money by returning 2 disks in one envelope. Since, according to this article, the postage for each envelope is prepaid, it doesn't really help.

L S W

Kuskokwim, perhaps it doesn't help Netflix, but it DOES save USPS money.

Seth

also, kuskokwim, it's disc with a C. Disk with a K is a floppy disk.

Miss Information

@ Kuskokwim - I believe Netflix pays for the return trip when they send you a disc. I would also think their return processing is optimized for single-disc returns, so you may not be doing anyone a favor (well, maybe the USPS) by stuffing extra discs in the envelopes.

Mail Processor

More discs in an envelope will more likely jam the machines used to process and sort the mail. Please do not do this.

Paul

I read some of the information a while ago, and I'll comment on the testimony, point by point. (Disclosure: I used to subscribe to both Netflix and Blockbuster, but I've discontinued both long time ago. I've never been with Gamefly.)

1) Gamefly has chosen to use an insert which requires more expensive postage.

I think Gamefly was told that their envelopes tear easily or something, so to protect their own investment, they were in a way forced to use the inserts. If they were manually separated like the Netflix discs are, then they wouldn't need to use the inserts or pay the higher postage.

2) Gamefly envelopes are not branded and are hard to manually cull, unlike the bright red Netflix mailers.

Bright orange is still pretty easy to cull. This is not a valid argument. Why does USPS have to cull it anyway? Don't they have machines to do that?

3) Netflix picks up the mail from 130 different locations and delivers it to 58 shipping centers to cut down on machine processing which could damage DVD mailers.

Aren't there more than 130 post offices in the entire USA? Maybe they are referring to plants. Either way, if they admit it could damage mailers, why don't they use inserts, or is this a preferential thing?

4) By removing Netflix mailers before processing the US Postal service saves money: less mail is machine processed and fewer jams occur because of DVDs.

So Netflix "outsources" their sorting to the post office, who are about to go out of business because their labor costs are so high. No wonder government is so inefficient: they're doing private corporation's job at other paying customers' (not taxpayers) expense. Fewer jams might benefit the post office and Netflix, but why should Netflix get preferential treatment for using crappier packaging? Are they paying more? (Sure they are shipping more products, but are they already getting a built-in discount for that?)

Kevin McCoy

Paul, Netflix isn't "outsourcing" their sorting to the post office, this is talking about sorting the mail, the job of the post office. Either they remove the Netflix envelopes by hand or they run through the machines. It's not like they're going to truck all of the mail over to Netflix and ask their workers to pull out the Netflix disks and then truck the mail back to the post office for sorting. The USPS people have to sort the mail, and part of that is sorting out the Netflix discs. If they find that it's more efficient to do it by hand, then all the better for everyone. It sounds like they consider that the time lost in pulling the Netflix disks by hand is compensated by the time saved by not having to clear jams in the automated machines. The text of the article makes this all quite clear, if you'd read it for understanding rather than seeing pro-Netflix conspiracy at every line return.

I used both disk and disc in this text just to irritate Seth and others of his ilk. ;)

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Diomedes

I am a Postal Manager and we give Netflix priority handling. This is demanded by managers such as Larry Belair. It is very expensive to use four or five employees to cull this mail out daily. It is done because Netflix packaging is damaged by our AFCS machines and the revenue they provide us. Mr. Belair is dishonest in his testimony and this is one of the reasons that the USPS is losing money. What a waste to handle mail manualy.

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