Is This A Class Action Settlement... Or A Marketing Promotion?

from the seems-phishy dept

Wed, Nov 2nd 2005 10:20am — Mike Masnick

Thanks to both Todd and Jim for letting us know about the latest "settlement" of the class action lawsuit against Netflix. The word "settlement" has to go in quotes, because once you read the details, it makes you wonder what kind of settlement it really is. As Todd pointed out, the settlement seemed more like a phishing scam than anything else, and he never felt particularly "injured" by the fact that Netflix advertised "unlimited" rentals and "one day delivery." The settlement means that Netflix customers can get a free one month upgrade (4 movies instead of 3), but after a month, if you don't manually downgrade, your fees go up. If you're a returning customer, you can get a free month (which, apparently, was a promotion they were already offering). So, that certainly sounds like it's more of a "promotion" designed to get back old customers and get existing customers to upgrade than any "settlement." Of course, as with any promotion, there is a "fee" for Netflix. The lawyers who worked on the case are getting $2.5 million out of it. Perhaps that's the new law firm strategy: take on Madison Avenue by setting up "promotions" that appear to be class action settlements.

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10 Comments

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Richard, 2 Nov 2005 @ 10:46am

Even worse for real old customers!
Worse yet. We are old time customers, from when netflix was brand new. We have the grandfathered 4 movie plan that costs $19.25/month. If we opted in to this settlement, took the 5 movies a month and then downgraded back to their new 4 movie a month plan it would start costing us $23.99/month!!!
Sounds to me like this whole settlment was handled by marketing, not by legal. We wont be making a settlement claim..
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Mike (profile), 2 Nov 2005 @ 10:56am

Re: Even worse for real old customers!
Looking at the details, it actually sounds like you have to manually *OPT-OUT* of the settlement. Otherwise you may be automatically included.
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Richard, 2 Nov 2005 @ 11:03am

Re: Even worse for real old customers!
Actually in the documentation the option we will choose is option 2.
Option 2. Do Nothing
If you do not wish to receive the benefit, do nothing. You will not receive the benefit but will remain a Class Member. You therefore waive your right to bring a separate lawsuit against Netflix concerning the Released Claims.

Like almost all class action suits if you do nothing you net nothing and remember netflix is going to spin these upgrades as a loss so I have to actually sign up to benifit from the suit.
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Carl (profile), 2 Nov 2005 @ 11:04am

Re: Even worse for real old customers!
You must not have looked at the details, because you have to specifically request to receive the benefit.

The only opting out is to opt out of the _class_, which means you reserve your right to level your own lawsuit over this matter. This is typical for class-action lawsuits.

And yes... most of Netflix' customers don't feel "damaged" by Netflix advertising or operations. But there are some poor individuals who really think that Netflix is screwing them over and has completely misrepresented what they are really offering. I think these individuals have too darn much time on their hands when they complain that they can't manage to get more than thirty or forty movies in a month because Netflix is slowing them down on purpose. They think Netflix owes them far more than the value of the money they are paying for the service. Netflix said "unlimited" and they think that means they should get whatever they want.
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Mike (profile), 2 Nov 2005 @ 11:20am

Re: Even worse for real old customers!
Aha. Okay. Point taken. You can get away by doing nothing. I got confused about opting out of the class. Thanks for clarifying.
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drew, 2 Nov 2005 @ 12:37pm

brilliant
netflix was a brilliant idea to begin with. now this.

i'd like to meet the guys in charge, they are good.
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Todd, 2 Nov 2005 @ 2:44pm

Re: Even worse for real old customers!
Carl, the named party on behalf of the class gets $2000. The rest of the group who "think that Netflix is screwing them over" gets nothing, really.

This is akin to the early lawsuits against AOL for offering more "free minutes" during their trial periods than there were free minutes during said period.

Silliness.

Good write-up / analysis, Mike.
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Griffon, 2 Nov 2005 @ 4:50pm

Yeah odd
Yeah I fail to see how this settles them NOT giving me unlimited rentals and 1 day delivery. Basically on most plan shifts that settlement amount to 1 extra CD for one month and then forces you to have to take some action. Weak.

I'd of been a lot happier if they just let us old timers who stepped away for a time go go back to the 4/20$ unlimited that was the original plan that put them on the map. All the new schemes suck.
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crystalattice (profile), 2 Nov 2005 @ 10:03pm

What were the specifics of the lawsuit?
I had Netflix last year before I moved and never had a complaint against them. My movies had a 1 day turnaround and never ran up against a limit.
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ugur cıg, 4 Apr 2006 @ 10:53am

bonus
bnus
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