Special Report: Inside Netflix - WMC Action News 5 - Memphis, Tennessee

Special Report: Inside Netflix

By Nick Kenney - bio | email | Twitter | Facebook

MEMPHIS, TN (WMC-TV) - More than 10 million Americans receive red envelopes in the mail each week containing movies they've rented online.

Netflix is the world's largest online movie rental company, with secret offices right here in Memphis.

Steve Swasey, Vice President of Corporate Communications for Netflix, said his company doesn't publicize the locations of its distribution centers.

"We keep this kind of secretive - where we are and how we do it - but you guys got a good look at it," he said.

The Memphis distribution center is one of 58 that Netflix has spread across the country.

"Here in Memphis, we'll be processing about 11,000 disks today," Swasey said.

The day begins at 4:00 a.m., when ten local employees begin ripping open every movie returned overnight by mail.

"Everything is very meticulous," Swasey said. "Netflix works on speed and efficiency."

Associates check each DVD for flaws.  Broken disks are set aside for replacement, while dirty ones get a rub down on a piece of cloth covered in glass cleaner.

By 8:00 a.m., all 11,000 disks are ready for the NPI, a huge machine that performs multiple tasks.  At this stage, it works at 30,000 DVD's per hour.  The first time a DVD passes through, the machine generates an email that is sent to a customer informing that person his or her DVD has been successfully returned.

During a second pass-through, the NPI determines whether a movie is scheduled to be sent to another customer.  If not, it heads to the shelf.  If so, it heads across the room to another machine - the stuffer.

Back when Netflix first started in 1999, envelopes were stuffed manually.  Now, the stuffer does the same job - at 3,200 per hour.  From the stuffer, the discs return to the NPI.

"Once these envelopes are stuffed, they're sent back to this machine, where they're sorted by zip code," Swasey said. "Then it prints the address on that label at a rate of 17,000 per hour."

By 4:00 p.m., the day's DVDs are heading to the post office.

"Netflix changed the way Americans rent movies," Swasey said.

Netflix launched almost 10 years ago, and since then has shipped more than 2 billion DVDs.


To learn more about Netflix, including membership information, click here: www.Netflix.com

For industry news about Netflix, click here: http://www.hackingnetflix.com/

To check Netflix’s NASDAQ performance, click here: http://www.google.com/finance?client=ob&q=NASDAQ:NFLX

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