Wal-Mart gets a win out of Netflix settlement
The company gets approval to settle a class-action lawsuit by sending gift cards to current and former Netflix users.
But this allegation has suddenly turned into a marketing windfall for Wal-Mart -- and may allow it to steal some of Netflix's customers. Here's how it happened.
A class-action lawsuit was filed alleging that in 2005, Wal-Mart agreed to stop renting DVDs online if Netflix agreed it wouldn't sell physical DVDs. Wal-Mart denied the allegations, but agreed to pay $27.5 million to settle the case.
OK, sounds fairly standard. But Wal-Mart got permission to pay the money in the form of gift cards to 40 million current and former Netflix users, PaidContent reports. And what can people do with those gift cards? Rent online movies from Wal-Mart!
More and more people are choosing to get movies from Walmart.com's Vudu offering, in fact. Vudu has shot to 5.3% of the movie download market from 1% last year, The Wall Street Journal reports. Doesn't sound like much, but it was enough to put Wal-Mart in third place behind Apple (AAPL) iTunes and Microsoft's (MSFT) Zune Video Marketplace. Note: MSN Money is owned by Microsoft.
As a subscription service, Netflix was not included in that comparison.
So now, Wal-Mart not only gets to send out gift certificates as settlement, it also gets access to Netflix's customer database, The Atlantic notes. "The very premise of Wal-mart turning a class action lawsuit filed by customers who feel cheated into an opportunity to cheat their competitor is both abominable and brilliant," wrote Adam Clark Estes.
PaidContent takes the conspiracy theory a step further, wondering if Wal-Mart intentionally threw the lawsuit just to gain access to Netflix customers. Netflix hates the settlement, calling it "the equivalent of a marketing campaign that costs Wal-Mart only 68 cents per potential customer."
Don't look for those Wal-Mart gift cards anytime soon. Final approval of the settlement isn't expected until February of next year.
Final settlement isn't expected until February of 2012.
Walmart is big, but they would not have market share unless people were shopping there.
In fact a lot of people shopping there. A lot of those shopping there need the price breaks. Others shop there because they think paying more for the exact same item elsewhere is just wasteful. But the fact remains that shop they do.
This is part of that "free market enterprise" stuff so critical to the American way. Although it can be hard to understand when so many companies operating in the US are owned by companies from other countries. Think Nestlé (Suiss), Trader Joe (German), 6 car manufacturers (Japanese & German). Even Anheuser-Busch, America’s best-selling beer maker, is now owned by a Belgian company.
now if this doesnt say wally world is to big then your not to bright
www. bloomberg.com/news/2010-09-27/wal-mart-offers-to-buy-south-africa-s-massmart-holdings-for-21-08-a-share. html
@ dale i don't shop at wally world after 10 years of seeking employment with them never being called for an interview and a serious reaction to an incense they sold i dissolved my relations with them. i only go into wally world to help my 62 year old mom shop getting the evil eye from all upper management in the store till i leave from the slip and fall suit that i filed on them for my mother because they had no wet floor sign where it was wet which cause her to slip and break her hip.
my local wally world is still in court over a shelf that fell on top of an elderly woman here this year killing her. wally world is one of the if not the hardest to get a settlement out of when they are at fault it took me a year to get our suit finalized.
Hey Stoopid. You might want to make sure you have used the word "to" correctly before you call people not too bright.
to the person who negged me over my post about my mom and the elderly woman here is the news storyabout the woman being killed by the falling shelf
http://www .beaumontenterprise.com/news/article/Woman-sues-Walmart-over-towel-display-death-737195. php
Copyright © 2014 Microsoft. All rights reserved.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.