GameFly Complains To US Post Office: Treat Us Like Netflix!

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GameFly is a video game rental by mail service, and can be summed up quickly and accurately as “Netflix for Games”. Now, the orange envelope company is complaining to the US Postal Service that Netflix envelopes are given priority over theirs in the post system – and they even accuse that because they are paying more per shipment than Netflix, it’s starting to affect their bottom line.

As reported by Ars Technica, Netflix pays at most, $20 per DVD and has increasingly been getting them free from movie studios in exchange for letting them put unskippable trailers on the DVD (that’s why Netflix gets those grey “rental DVDs”). GameFly has no such deal in place, and they are paying at least $50 for their games. Because they could quickly face out of control costs if games started getting damaged in the mail, they have a piece of cardboard in the envelope to protect the game.

However, the envelope adds to the weight and shipping cost. GameFly reports that they’re being charged $1.05 per mailer, as opposed to the $0.44 that Netflix pays. That accounts to a difference of $730,000 per month, which according to GameFly, is more than their monthly net income thus far in 2011. They first petitioned the US Postal Regulatory Commission in 2009 and have been waiting for an answer since.

Netflix’s advantage doesn’t even stop at the price of the proverbial stamp. USPS employees report that Netflix mailers are segregated from the rest of the mail in the postal processing plants and they are allowed to skip several steps of manual sorting and whatnot. This means that Netflix mailers are getting faster to consumers – for less money – than GameFly.

GameFly is warning the US Postal Regulatory Commission that if the situation is not resolved quickly, it may do “irreparable injury to GameFly.”