Inside a Netflix Warehouse • Hacker News Board

Re: Inside a Netflix Warehouse

#21

Post by ghshephard » Tue, Aug 04, 2009, 9:40 PM UTC

"Its biggest secret remains the warehouses themselves -- for two reasons. No. 1, each holds several million DVDs, not to mention expensive mail-sorting gizmos and dry-board posted statistics on how many discs were recently returned damaged, placed in the wrong sleeve or scratched. And No. 2, Netflix has grown leery of what happens when customers learn the location of a warehouse -- they drop off DVDs at the door."

This seems in-genuine for multiple reasons:

1. Other articles I've read on the Netflix Inventory Control system indicate that there are almost _no_ DVDs in the warehouses, the vast majority are either at customers, or in shipment. So the "Several Million DVDs" is an unlikely claim.

2. Expensive mail sorting gizmos? So? Are they afraid of theft? "Mail Sorting Gizmos" neither lends themselves to easy snatch and grabs, transport, nor resale.

3. Dry-Boarded Stats on scratches, damaged, wrong sleeve. Doesn't sound like competitively useful information to me, particularly after data like # of Sleeves per hour (650-900) per employee, and interval of exercise (every 65 minutes) has been made public.

4. Drop Off DVDs at the door - This is a bad thing, why?

Nope, My guess is that NetFlix is trying to delay the inevitable, which is unionization of their workforce by trying to keep the location of their shops confidential and avoid organized labor leaders paying their sorters/packers a visit...

Re: Inside a Netflix Warehouse

#22

Post by madebylaw » Tue, Aug 04, 2009, 9:55 PM UTC

just_the_tip wrote: post #13

Video of a Netflix hub: http://www.youtube.com/watch?v=CWA0LKfEv3c

Weird. In this video they have people hand stuffing envelopes but in the original article they have a machine stuffer. I wonder, is the video just outdated?

Re: Inside a Netflix Warehouse

#23

Post by uybuyvg » Tue, Aug 04, 2009, 10:11 PM UTC

wmf wrote: post #17

ShabbyDoo wrote: post #7

Netflix has deployed the largest "legacy adapter layer" business process that I can recall. This is a great example of how to start a business where the end-state model is dependent on things outside of its scope of control (or even influence). When Netflix started in 1997, Most of its potential customers were using dial-up, and there was no way Hollywood would have allowed digital distribution anyway. So, they rode…

About marginal cost, it's not obvious to me that postage both ways plus sorting is more expensive than bandwidth plus royalties. Given that postage gets more expensive and bandwidth gets cheaper, streaming should be cheaper at some point if it isn't already.

But: number of customers that want to sit on couch in front of TV and watch rented movie with family > number of people who want to watch download on computer * (1 - fraction of computer capable watchers do this for free)

Re: Inside a Netflix Warehouse

#24

Post by uybuyvg » Tue, Aug 04, 2009, 10:14 PM UTC

ghshephard wrote: post #21

"Its biggest secret remains the warehouses themselves -- for two reasons. No. 1, each holds several million DVDs, not to mention expensive mail-sorting gizmos and dry-board posted statistics on how many discs were recently returned damaged, placed in the wrong sleeve or scratched. And No. 2, Netflix has grown leery of what happens when customers learn the location of a warehouse -- they drop off DVDs at the door." Th…

Warehouse with million * untraceable, easily sold, small items worth $10 each. Security costs = $$$.

Re: Inside a Netflix Warehouse

#25

Post by felideon » Tue, Aug 04, 2009, 10:14 PM UTC

It's also the reason that the time of day you mail your DVD back has no effect on when you receive your next one.

Huh? Sure it doesn't matter if you send it before the last pick up of the day: Netflix will receive and ship a DVD the next day and I get the movie the day after.

But if I drop it off after the last pickup time (after 5:00pm for me), I get a DVD back a day later rather than the usual 2-day turnaround.

Re: Inside a Netflix Warehouse

#26

Post by enneff » Tue, Aug 04, 2009, 11:03 PM UTC

uybuyvg wrote: post #23

wmf wrote: post #17

Earlier quoted context omitted.

About marginal cost, it's not obvious to me that postage both ways plus sorting is more expensive than bandwidth plus royalties. Given that postage gets more expensive and bandwidth gets cheaper, streaming should be cheaper at some point if it isn't already.

But: number of customers that want to sit on couch in front of TV and watch rented movie with family > number of people who want to watch download on computer * (1 - fraction of computer capable watchers do this for free)

What about the xbox 360, TiVo, and other set top boxes?

Re: Inside a Netflix Warehouse

#27

Post by uybuyvg » Tue, Aug 04, 2009, 11:30 PM UTC

enneff wrote: post #26

uybuyvg wrote: post #23

Earlier quoted context omitted.

But: number of customers that want to sit on couch in front of TV and watch rented movie with family > number of people who want to watch download on computer * (1 - fraction of computer capable watchers do this for free)

What about the xbox 360, TiVo, and other set top boxes?

Tiny sales compared to DVD players, almost all download uses require you to do something 'techy' Netflix market is families and film fans - not people that know what HDMI stands for.

Netflix will definitely be online only one day, probably before Amazon goes the same way, but not for a few years.

Re: Inside a Netflix Warehouse

#28

Post by akkartik » Wed, Aug 05, 2009, 12:11 AM UTC

I loved this recent slideshow on Netflix culture: http://www.slideshare.net/reed2001/culture-1798664

Re: Inside a Netflix Warehouse

#29

Post by URSpider94 » Wed, Aug 05, 2009, 1:36 AM UTC

CWuestefeld wrote: post #20

Am I reading this right? It seems to say that every day, every disc that’s currently is in stock is processed so that any that need to sent to customers can be pulled out for delivery. And my intuition tells me that would be crazy. "Then discs are scanned a second time -- if a title is requested, and around 95 percent of titles get rented at least once every 90 days, the machine separates it and sorts it out by ZIP c…

I think I understand why.

If you DON'T scan the discs every day, then you need to organize them in some fashion so that they could be picked from the shelves when an order comes in.

If you DO scan them every day, then they can just go on the shelves in random order. The scanner will automatically pick out the discs that it needs to ship that day as they go through.

So, you pay extra for machines and labor to scan every day, but you save on the added cost for sorting equipment, as well as random-accessible storage units and people/equipment to locate and pull random movies from the stacks.

This makes even more sense if, as others have suggested, most of the Netflix inventory is deployed in the field at any one time, and not sitting on the warehouse shelves.

Re: Inside a Netflix Warehouse

#30

Post by brown9-2 » Wed, Aug 05, 2009, 1:55 AM UTC

felideon wrote: post #25

It's also the reason that the time of day you mail your DVD back has no effect on when you receive your next one. Huh? Sure it doesn't matter if you send it before the last pick up of the day: Netflix will receive and ship a DVD the next day and I get the movie the day after. But if I drop it off after the last pickup time (after 5:00pm for me), I get a DVD back a day later rather than the usual 2-day turnaround.

Huh? Of course Netflix can't pick it up from the post office if the post office hasn't picked it up from the mailbin yet.

What they're referring to is the fact that it doesn't matter if you drop you DVD in the mailbin at 9am or minutes before last pick up.