90,000 DVDs. No Shelves.

A Netflix hub reveals a rhythmic flow of DVDs, bar codes, and Band-Aids.

“Talk about your obscure movies. Check this out.” Bob O’Handley pulls a DVD from a pile of returns. “Johnny Mera Naam,” he reads aloud, holding out the 1970 Bollywood offering. “I’m sure we don’t have too many of these in stock. That ought to give you an idea of the volume of the inventory.”


O’Handley runs Netflix’s Worcester, Massachusetts, hub, a former shoe warehouse now buzzing with the sounds of scanners, printers, and fluttering envelopes. Rows of “operators” move rhythmically, their hands barely distinguishable in a blur of DVDs, bar-code stickers, and Band-Aids. Band-Aids? “Paper cuts,” O’Handley explains. “They stuff a lot of envelopes.”

This is the blue-collar subbasement of Netflix, the online movie-rental company. Founded in 1998, Netflix survived the dotcom meltdown by fashioning itself as the alternative to local video stores — and by actually delivering. It offers an all-DVD library of more than 15,000 films sent through the mail, with no due dates and no late fees. This year, Netflix’s customer base soared past one million, and for the first time, it made money.

There are no Nerf balls or cappuccino makers at the Worcester hub. More striking, given the hub’s stock of 90,000 DVDs, there are no shelves. “I came from a traditional warehousing background,” says O’Handley. “I was like, ‘Okay, I want Shrek; I’m going to go to slot S-407 . . . right?’ ” He smiles at his innocence. “Not so.”

Instead, an ingenious daily dance takes place. Each morning at 8:00, the U.S. Postal Service (cheaper and quicker than the alternatives, incredibly) drops off “pumpkin carts,” orange bins with thousands of returned DVDs from all over New England. Operators scan the discs, collecting returns data, which computers at Netflix’s San Jose headquarters match to new orders. After lunch, the Worcester operators rescan every disc in their inventory; with each scan, they act on instructions from San Jose to “Ship Disc,” if a customer wants the film, or “Scan Tomorrow,” if not.

“It’s a lot faster than a traditional shelving system where you have to run around and marry up orders,” says O’Handley. Dennys Torres, one of four original operators when the hub opened, in January 2002, can clock more than 800 discs per hour. The Scan Tomorrows move faster, set aside by the handful. Ship Discs get an envelope and a pair of stickers. “When we first started last year,” says Torres, “moving 4 boxes was a lot.” He indicates sets of long, narrow boxes filled with DVDs, some 320 discs in each. “We were taking long breaks, two-hour lunches. Now, it’s all work; everybody moves at least 10 boxes a day.”

Outgoing discs pass through the Omega, a 40-foot-long beast of a machine that looks like a bad movie prop — maybe a cybercentipede. Warmed up, it can organize more than 20,000 outgoing rentals an hour into bins specified by zip codes. O’Handley feeds in a long stack of outgoing DVDs, and the Omega responds like a snowblower, shooting a blizzard of movies onto a belt.


Presorting saves Netflix six to seven cents per DVD, O’Handley says. Even better, it means faster shipping times. Which possibly means that tonight, somewhere in New England, someone is happily watching Johnny Mera Naam.