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Netflix cranks up DVD distribution

With 10 new distribution centers opening throughout the country, the online DVD-rental company believes it has the capacity to handle up to 1 million orders a day.

In an effort to speed deliveries to its customers, online DVD-rental company Netflix said it has 10 new distribution centers throughout the country up and running.

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Netflix charges customers $19.95 per month for a subscription that allows them to choose movies online and have them shipped out via first-class mail. Subscribers return the DVDs using enclosed mailers. There are no late fees. Customers can rent as many movies as they want during a month but can only have three movies out at a given time.

Adding distribution centers should cut down on shipping time, the company said Thursday.

The new centers are located in Atlanta, Boston, Denver, Detroit, Houston, Los Angeles, Minneapolis, New York, Seattle and Washington, D.C. Previously, all movies were shipped from Netflix's main distribution facility in San Jose, Calif.

Netflix said each facility can handle approximately 50,000 DVD orders per day. The company now believes it has the capacity to handle up to 1 million orders each day.

Netflix, which went public last month, had one of the few successful Internet-related public offerings in some time. The Los Gatos, Calif.-based company raised $82.5 million in its first day, money that Netflix intends to use for debt repayment and general corporate purposes.