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GameFly Scores In Longstanding DVD Mailing Complaint
An anonymous reader writes "GamePolitics reports that the Postal Regulatory Commission has ordered [PDF] the U.S. Postal Service to equalize the rates paid by mailers who send round trip DVDs, and concluding (sort of) a dispute that has been underway for more than four years. The new postage rates take effect on September 30th. Some mailers, prominantly Netflix, send their round-trip movie DVDs as 'letters,' but GameFly's gaming disks are sent in slightly bigger envelopes as 'flats' to avoid breakage, and so GameFly has paid a much higher postage rate. GameFly argued that this was unfair discriminatory treatment because USPS was providing special hand-sorting treatment for Netflix disks without charging Netflix for the extra handling. But now there's a new twist: the Postal Service wants to reclassify DVD mailing [PDF] as a competitive product, where the prices would not be limited by the rate of inflation, because it says that mailed DVDs compete with the internet, streaming services, and kiosks such as Redbox. The regulatory agency is accepting responses [PDF] from interested persons until September 11th to the Postal Service's latest comments on its request [PDF]."
So, the Postal Service says DVD mailing competes with Internet streaming and ... that means they want to charge *more*?
"Competitive." You keep using that word. I do not think it means what you think it means.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
As an ex video store owner I concure that yes when you're a little mom and pop shop you get reamed. But Netflix is like blockbuster. They buy in bulk and get much better rates than we do. In 1992 we were typically paying about $85 for a new release, and customers expected us to have multiple copies. Meanwhile, blockbuster was selling them to consumers at $45. Eventually we went to a model where we'd buy 1 from the distributer (so we'd have it on the release date), and then buy a couple more from blockbuster to backfill our inventory as soon as we could. Even still at $4.00 / day for a new release it takes a while to recover those costs. The averge interest didn't typically last more than a month, so even with all 3 coppies out at 4 / day (and that doesn't always happen) we'd make a max of $360, of which $175 is purchase costs. Now add into that equation the bad VCR that wrecks a tape, the overhead of running a brick and morter business, payroll, etc. We went out of business shortly after Blockbuster got big. We just couldn't compete.