I received a notice in my e-mail from Netflix, informing me of a class action settlement in which they deemed me eligible to participate. Because I had a paid account prior to January 15, 2005 - this was under my “netflix” e-mail address - I am a member of the Class. If you don’t currently have a Netflix membership, the settlement gives you a free month of service. If you do currently have a membership - which I do, as “netflix2″ - then you get a month of the next service level. (For me that would mean four DVDs at a time for a month, rather than the three I pay for.) I’m pretty sure I have determined from the Long Form Notice [pdf link] that I am still a Class Member even though I’m now using a different account (the queue was gone from the original account anyway, so I took another 2-week free trial). But it gets kind of tricky in Section III.A.1 -

For all but the 8 DVDs at-a-time subscribers, the upgraded service shall renew automatically (following an email reminder) at the end of the upgraded month at Netflix’s regular subscription rate for the upgraded program, unless and until the Class Member cancels the service or modifies his or her subscription.

Wait a minute - how is this acceptable? It makes the whole thing feel like a scam to get my money. Even if it is a legitimate lawsuit and settlement, Netflix is still coming out on top because a lot of members are going to forget to cancel or even decide they like the upgraded level. So how is this supposed to be “punishment” for Netflix in any way? I am going to go with the “do nothing” option outlined in their original e-mail, because there’s no way I’m falling into this trap.

Added: I found this entry in the NetflixFan blog about this case. Everyone in the comments thinks the guy who brought the lawsuit is an idiot. What did he ever do to them? Some of them claim they’re going to get the case thrown out - I don’t think so. That kind of thing costs money.

Added: Here is the letter I sent Adam Gutride, an attorney for the plaintiff.

Mr. Gutride:

I am a member of the class you are representing in the lawsuit against Netflix, Inc. Today I viewed the documents associated with the settlement, and I must say I am quite surprised by what I found there. It was my belief that the settlement would result in punitive action against Netflix for having made false statements, created unfair competition, and the other activities outlined in the case. Instead, I notice that the result of the settlement works out so that Netflix benefits from the settlement.

As you know, class members who participate in the settlement will receive an upgrade in their service for a period of one month. Following that period, the upgraded service will continue at the higher rate unless the member requests the lower level again or cancels their service altogether. This arrangement can only benefit Netflix, as many users will either forget to cancel the upgrade or decide they like the extra DVD and continue paying the higher rate, resulting in additional revenue for the corporation.

I am very interested in hearing an explanation of how this settlement came to pass. The $2.53 million that counsel will receive is an expected result from the settlement, as is the $2,000 Mr. Frank Chavez will receive, and I do not question those terms. I would like to learn more about the terms relating to the upgraded month of service that class members will be awarded. I would greatly appreciate a response at your earliest convenience.

Sincerely,
Meredith [P.]