Legal Issues

by Mike Masnick

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

from the seems-phishy dept

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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  1. identicon
    drew, 2 Nov 2005 @ 12:37pm


    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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