Post Office Proposes Special Rate For Mailing DVDs 176
An anonymous reader writes "The United States Postal Service is seeking to implement a special postage rate for companies such as Netflix, GameFly and Blockbuster (PDF), which send DVDs to their customers and then receive them back. This proposal for special rates for two-way mailers of optical disks follows a protracted legal complaint from GameFly, which argued that Netflix was receiving special handling by the Postal Service while paying a cheaper postage rate."
The rest of the story (Score:5, Insightful)
http://arstechnica.com/gaming/2011/03/the-cost-difference-in-mailing-netflx-vs-gamefly-all-of-gameflys-profits/ [arstechnica.com]
The reason GameFly pays more is because their mailers weigh more. Netflix keeps the mailer at 1 ounce and pays 44 cents each. GameFly's mailer is 2 ounces and they pay the two ounce price. The big giant clue in the linked article is that the USPS is considering changing the price of the 2 ounce mailer to the price of a 1 ounce mailer.
So the real story is that GameFly wants a discount with zero actual justification.
The packaging for GameFly costs more. Work it into your business model or reduce the packaging weight.
I don't do business with GameFly but if I did, I'd cancel. They actually have the nerve to pretend Netflix is getting some kind of special treatment while they are the ones seeking it.
There is nothing unfair about what the USPS is doing. The rest of us have to pay by the ounce for our mail.
Re: The rest of the story (Score:5, Insightful)
Not excusing this, but perhaps they've tried and haven't been able to redesign a mailer that doesn't somehow infringe on Netflix's mailer patent (and any others that likely exist):
http://www.google.com/patents/US6966484 [google.com]
Re:dumb (Score:5, Insightful)
Re:How is this news? (Score:3, Insightful)
> Every business should be required to actually fund their pension plans
I'll do you one better: employer pension plans should be outlawed. You want a pension plan? It has to be managed by a outside entity, and the employer is never allowed to touch the money once it goes in.
Re:How is this news? (Score:5, Insightful)
Re:How is this news? (Score:5, Insightful)
Okay, here's the deal. You have until your 30th birthday to fully fund a retirement account that must last until you turn 95. If you can't, you must declare bankruptcy and lose everything. Sound fair?
Re:The rest of the story (Score:5, Insightful)
I was a Netflix subscriber when they switched over to the current, thin mailers. The story at the time was that the new mailers could be handled by the automated sorting machines at the USPS facilities and that the difference in cost between postage and breakage was strongly on the side of postage - Netflix was willing to absorb the additional breakage, which they expected but at a low level, based on statistical sampling and tests they'd conducted.
One discontinuity is that, I think, the game discs are several multiples more expensive than the DVD's, so GameFly can't absorb as much breakage. That's probably why they've still got the thick mailers and why their subscription prices are 50% higher than Netflix.
It sounds to me like they have a more expensive business model and are asking the USPS to subsidize it.
Re:dumb (Score:2, Insightful)
The reasons for the Postal monopoly are not at first obvious. A Libertarian minded person would cry foul at the legalized monopoly, citing private enterprise being able to do it cheaper. Until one looks at what would happen if the USPS was not the only game in town.
From the USPS Monopoly History link you provided:
"Without such protection, Congress reckoned that private companies would siphon off high-profit delivery routes, leaving only money-losing routes to the Department, which then would be forced to rely on tax-payers to continue
operations"
If the US did allow first class mail to be delivered by private companies, the USPS would not be self sustaining, and would require tax revenue in order to keep operating in all jurisdictions in the US.