\n<\/p>\n
In a nondescript office park minutes from Disneyland sits a nondescript warehouse. Inside this nameless, faceless building, an era is ending.<\/p>\n
The building is a Netflix DVD distribution plant. Once a bustling ecosystem that processed 1.2 million DVDs a week, employed 50 people and generated millions of dollars in revenue, it now has just six employees left to sift through the metallic discs. And even that will cease on Friday, when Netflix officially shuts the door on its origin story and stops mailing out its trademark red envelopes.<\/p>\n
\u201cIt\u2019s sad when you get to the end, because it\u2019s been a big part of all of our lives for so long,\u201d Hank Breeggemann, the general manager of Netflix\u2019s DVD division, said in an interview. \u201cBut everything runs its cycle. We had a great 25-year run and changed the entertainment industry, the way people viewed movies at home.\u201d<\/p>\n<\/div>\n<\/div>\n
When Netflix began mailing DVDs in 1998 \u2014 the first movie shipped was \u201cBeetlejuice\u201d \u2014 no one in Hollywood expected the company to eventually upend the entire entertainment industry. It started as a brainstorm between Reed Hastings and Marc Randolph, successful businessmen looking to reinvent the DVD rental business. No due dates, no late fees, no monthly rental limits.<\/p>\n<\/div>\n<\/div>\n
It did much more than that. The DVD business destroyed competitors like Blockbuster and altered the viewing habits of the public. Once Netflix began its streaming business and then started producing original content, it transformed the entire entertainment industry. So much so that the economics of streaming \u2014 which actors and writers argue are worse for them \u2014 is at the heart of the strikes that have brought Hollywood to a standstill.<\/p>\n
Even before the strikes, streaming had rendered DVDs obsolete, at least from a business perspective. At its height, Netflix was the Postal Service\u2019s fifth-largest customer, operating 58 shipping facilities and 128 shuttle locations that allowed Netflix to serve 98.5 percent of its customer base with one-day delivery. Today, there are five such facilities \u2014 the others are in Fremont, Calif.; Trenton, N.J.; Dallas; and Duluth, Ga. \u2014 and DVD revenue totaled $60 million for the first six months of 2023. In comparison, Netflix\u2019s streaming revenue for the same period reached $6.5 billion.<\/p>\n
Despite the reduced staff, this operation still receives and sends some 50,000 discs a week with titles ranging from the popular (\u201cAvatar: The Way of Water\u201d and \u201cThe Fabelmans\u201d) to the obscure (the 1998 Catherine Deneuve crime thriller, \u201cPlace Vend\u00f4me\u201d). Each of the employees at the Anaheim facility has been with the company for more than a decade, some as long as 18 years. (One hundred people at Netflix still work on the DVD side of the business, though most will soon be leaving the company.)<\/p>\n<\/div>\n<\/div>\n
A few of them started straight out of high school, like Edgar Ramos, and they can run Netflix\u2019s proprietary auto-sorting machines and its Automated Rental Return Machine (ARRM), which processes 3,500 DVDs an hour, with the precision of Swiss watch engineers.<\/p>\n
\u201cI am sad,\u201d Mr. Ramos said while sorting envelopes into their ZIP code bins. \u201cWhen the day comes, I\u2019m sure we will all be crying. Wish we could do streaming over here, but it is what it is.\u201d<\/p>\n
Mike Calabro, Netflix\u2019s senior operations manager, has been with the company for more than 13 years. He said the unexpected moments of frivolity were a big part of why he had stayed, like the drawings made by renters on the envelopes or the Cheetos dust and coffee stains that often mark the returns, evidence of a product that has been well integrated into customers\u2019 lives.<\/p>\n<\/div>\n<\/div>\n
But when asked if he had ever met some of the most active customers in person, Mr. Calabro quickly replied, \u201cNo!\u201d In fact, the anonymous look of the facility, which provides a stark contrast to the giant Netflix logos that adorn the company\u2019s other real estate, is intentional. Visitors, it is clear, are not welcome.<\/p>\n
\u201cIf we put Netflix out on the door, we would have people showing up with their discs, saying: \u2018Hey, I\u2019d like to return this. Can you give me my next disc?\u2019\u201d Mr. Calabro said.<\/p>\n
That was the usual transaction with a video rental retailer, but Netflix wanted to make sure customers knew this was something different.<\/p>\n
\u201cIt was a decision we made very early on,\u201d Mr. Breeggemann said. \u201cIf they knew where we were, we\u2019d run into that problem. And then it wouldn\u2019t be a good customer experience. We wanted to mail both ways.\u201d<\/p>\n<\/div>\n<\/div>\n
Netflix\u2019s DVD operations still serve around one million customers, many of them very loyal.<\/p>\n
Bean Porter, 35, lives in St. Charles, Ill., and has subscribed to Netflix\u2019s DVD and streaming services since 2015. She said she was \u201cdevastated\u201d that there would be no more DVDs. Ms. Porter was able to use her subscription to watch DVDs of shows like \u201cYellowstone\u201d and \u201cThe Handmaid\u2019s Tale\u201d \u2014 episodic television made for other streaming services that would have required her to buy additional subscriptions.<\/p>\n
She and her husband also watch three or four movies a week and find Netflix\u2019s DVD library to be deeper and more diverse than any other subscription service. She often hosts cookouts in her backyard and invites neighbors to watch movies on an outdoor screen. That is easier to do with a DVD, she said, than with streaming because of internet connectivity issues. And she has become involved with the DVD operations\u2019 social media channel, posting videos, interacting with other customers and chatting directly with the social media managers working for the company.<\/p>\n
\u201cI\u2019m pretty angry,\u201d she said. \u201cI\u2019m just going to have to do streaming, and I feel like what they\u2019re doing is forcing me into having less options.\u201d<\/p>\n
To ease the backlash, Netflix is allowing its DVD customers to hold on to their final rentals. Ms. Porter intends to keep \u201cThe Breakfast Club,\u201d \u201cGoonies\u201d and \u201cThe Sound of Music.\u201d As for the last DVD she intends to watch: She\u2019s leaving that up to fate.<\/p>\n<\/div>\n<\/div>\n
\u201cI have 45 movies left in my queue, and where I land is where I\u2019ll land, as there are too many good options to pick from,\u201d she said.<\/p>\n<\/div>\n<\/div>\n
The employees have a more sanguine attitude. Lorraine Segura started at Netflix in 2008 and used to rip open envelopes \u2014 650 envelopes an hour. When automation came, she was one of the few employees who traveled to the facility in Fremont to learn how to run the machines and pass that training on to others. Now she runs the floor with Mr. Calabro as a senior operations manager.<\/p>\n
\u201cI\u2019ve learned a lot here: how to fix machines, how to make goals and hit targets,\u201d she said before leading her team in a round of ergonomic exercises to prevent repetitive stress injuries. \u201cI feel empowered now to get out in the world and do something new.\u201d<\/p>\n<\/div>\n<\/div>\n