Slashdot Mirror
One Year Later, USPS Looks Into Gamefly Complaint
Last April, we discussed news that video game rental service GameFly had complained to the USPS that a large quantity of their game discs were broken in transit, accusing the postal service of giving preferential treatment to more traditional DVD rental companies like Netflix. Now, just over a year later, an anonymous reader sends word that the USPS has responded with a detailed inquiry into GameFly's situation (PDF). The inquiry's 46 questions (many of which are multi-part) cover just about everything you could imagine concerning GameFly's distribution methods. Most of them are simple, yet painstaking, in a way only government agencies can manage. Here are a few of them:
"What threshold does GameFly consider to be an acceptable loss/theft rate? Please provide the research that determined this rate. ... What is the transportation cost incurred by GameFly to transport its mail from each GameFly distribution center to the postal facility used by that distribution center? ... Please describe the total cost that GameFly would incur if it expanded its distribution network to sixty or one hundred twenty locations. In your answer, please itemize costs separately. ... Does the age of a gaming DVD or the number of times played have more effect on the average life cycle of a gaming DVD?"
Welcome to the world of lawyers, where it doesn't matter who is right and who is wrong, but who is in a position to be a bigger pain in the neck. This is a discovery document for the defense of USPS, not a response to an inquiry. They probably won't be issuing a response.
The USPS lawyers (in the odd world of legal ethics) probably concluded that the "right" thing to do is to pressure Gamefly to settle and admit no wrongdoing by USPS. I'm sure there are good reasons for USPS to not actually put out a public report detailing what their definition of acceptable mail handling is or how poor mail handling happens, but those are good reasons only for people who work for USPS.
find a stranger in the Alps
Because mail is sorted through machines that bend all mail.. its industry standard and part of the automated sorting racks that read the digital stamp placed over the actual stamp, based on the USPS employee I talked to.
- d
CDs survive summertime closed car temperatures (i.e. 60+ Celsius) repeatedly without breaking. Repeated dropping on an edge could do it but the impact would have to smash through the surrounding manual first, retain sufficient energy to break the CDROM, and not damage either the manual or envelope. Both options seem unlikely.
Patent litigation: A doctrine of Mutually Assured Destruction... in which everyone seems willing to push the button
35. 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.
www.RacquetUp.org - Helping Detroit Youth
USPS is a government run company (for all intents an purposes). As such they do not need licence plates. They do however have (quite large) identifying numbers on the outside of the truck/vehicle. if it is a small post office they may do mail delivery from the post masters own personal vehicle but in that case there would be some identifying marks on the vehicle. most post offices too small to have fleet vehicles are pick up only however... and in that case there is no vehicle.
It's the difference in the elastic modulus among materials. The envelopes, manual, and cardboard packaging have different properties from the encased plastic discs. Opposing shear forces with small enough clearance could easily snap a CD/DVD in the middle, without leaving any particularly unusual bend or mark on the external plant-pulp packaging. If the tire and road surfaces were flat and clean enough, a loaded semi could drive over a piece of mail without harming it; not so for the disc.
Well couple things may be in play, other than the USPS being meanies:
1) Netflix may well consider a fairly high rate of loss acceptable. Depending on the prices they have to pay for the discs, it might not matter to them. Remember that the media itself is cheap. In large runs I'd be surprised if you could get a disc to cost $0.10. So if they have a situation with the studios where they can buy the discs cheap, separate of the rental rights, it might not matter to them.
They also have arrangements (or have had in the past) where they ship DVDs they printed themselves. In situations like that, they could be even cheaper, because there's no delay in waiting for replacements from the vendors, and they could be printed at the distribution centers nearest the subscribers asking for them.
Get off my launchpad!
I think you have to rule out #1. Netflix has to buy the discs retail from the studios, just like Blockbuster and others must. They do not get anywhere near a $0.10/disc cost. Think closer to $25. You can thank the death grip of old media for that.
Netflix has 89,000,000 discs in inventory and had revenues of $1.67 billion in 2009, so each disc could be seen as producing $18 in revenue, statistically (more on that below). Given that most Netflix customers have the "3 at a time" plan (at $17/month), and that they hold onto discs for an average of 10 days, that means a disc must be rented roughly 4-5 times for the disc to earn enough "allocation" of customers' plan revenue to break even, and that for the average disc this may take a year and a half.
Even if studios gave Netflix a sweetheart deal, I think they'd still need a minimum of 6 months of circulation to break even on your "average" disc.
But there is no "average" disc. What really happens is that there is a long tail of low popularity titles, with accordingly low inventories, and the newest titles are most popular/profitable and pay for the carrying costs of the remainder of their 100,000+ movie library.
But this is all for naught if the disc can't make it through the mail (and customers' homes) at least 5 times without being stolen or damaged, no matter how long that takes.
So Netflix would seem to care about mail damage, too.
Sources: Wikipedia, Feedflix
Or get your lazy ass out of the house and use a USPS drop box. Just sayin'
a drop box? I think you misunderstood. It gets broken when I receive it, not when I send it back.
Ones personal unfamiliarity with the issues, or with the methodology of litigation, does not necessarily invalidate the line of questioning. Since Gamefly has initiated litigation based on allegedly disparate treatment between itself and Netflix, it is entirely reasonable to include the density of their respective delivery networks in the discussion. Not doing so would be an unforgivable omission of analysis.
Regarding USPS/GFL-30, since the underlying issue is the breakage rate (and breakage during shipping is a known risk factor in both the disk rental and fulfillment industries), why would there not be an examination of the engineering studies that must surely have been performed in designing packaging to, presumably, minimize the breakage rate? Keep in mind that all disks are not created equal - breakage rates are known to vary based on factors including thickness and the elasticity of the compounds used in manufacturing them. Not examining this data would be tantamount to conceding that any packaging is sufficient and a disk is a disk is a disk, even though it is well known, by both parties in the litigation, that this is not the case!
Since USPS seems to be giving special handling to the Netflix disks, apparently due to the employees' reluctance to perform processing that results in damage to the goods, and the costs of withdrawing the pieces and handling them separately is almost certainly not included in the USPS pricing for handling them, it seems that the outcome will likely not be to extend this special handling to more mailers, but to standardize the handling of all mail containing disks, with, most likely, a higher price for doing so.
If the answer is no, then they are, by definition, not a "for-profit company".
So your definition of "for-profit company" excludes non-publicly-traded organizations, such as sole proprietorships and private partnerships? How interesting. Here I was thinking that "for-profit company" meant any company not formally classified as a non-profit organization. Or, more generally, any organization formed for the purpose of obtaining an economic profit through commerce.
The real question seems to be whether the USPS would qualify as a non-profit organization. As to that, I have no idea. Perhaps they would. Most of the proceeds do seem to be re-invested into the operation of the postal service, rather than simply accumulated or distributed back to the nominal owner (the federal government). On that score they would be considered a non-profit, to be best of my understanding, but there are other considerations with which I am not familiar.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Funny that you go off cursing and insulting people over being stupid and illiterate, when it was YOU that missed a VERY important point of the original post:
"my mail man used to break an awful lot of DVDs trying to shove them in my mailbox and then try to close it "
And not only that, you posted your moronic rant over 5 hours after the guy replied to you clarifying the situation:
"I think you misunderstood. It gets broken when I receive it, not when I send it back"
So, you act like an asshole, the guy politely replies saying you misunderstood, then hours later you ignore the polite clarification and act like an even bigger asshole.
So your definition of "for-profit company" excludes non-publicly-traded organizations, such as sole proprietorships and private partnerships?
Sorry, that probably should have read "are the answers to both questions no?" For a sole proprietorship, that person would effectively be the CEO. I certainly didn't intend to limit my definition to publicly traded companies that name the person-in-charge "CEO". For private companies, you can substitute "owners" or "investors" for "shareholders".
Here I was thinking that "for-profit company" meant any company not formally classified as a non-profit organization.
Nope, there's also the "not-for-profit" classification. I may be wrong on this, but "non-profit" is used for organizations that are basically charities. Food banks, homeless shelters, cancer research organizations, etc. would be non-profit. "Not-for-profit" is for organizations that clearly aren't charities, but that don't have owners, executives, or shareholders that get extra money at the end of the year. Places like research labs that are spin-offs of universities (MIT has a few around Boston) are often not-for-profits. The USPS would probably be considered such a not-for-profit.