If you received an email recently telling you that you would be receiving a Walmart gift card or cash equivalent as part of the corporation’s settlement in a class action lawsuit alleging that Walmart and Netflix illegally worked together to fix DVD rental or purchase prices, then I’m afraid there’s some bad news: It probably won’t amount to enough to rent a DVD (or buy a coffee, for that matter), and there’s no more where it came from.
You may remember that back in September, a court in California tentatively approved Walmart’s proposal to provide its settlement to the lawsuit in the form of Walmart.com gift cards, a suggestion that Netflix opposed because that site is home to potential Netflix competitor Vudu. At the time, Netflix called the idea “the equivalent of a marketing campaign that costs Walmart only 68 cents per potential customer,” but it turns out even that might have been lowballing the actual value of the settlement to the end user.
Here’s where we have to use math. Walmart has set aside $27.25 million to pay for the settlement, but a quarter of that amount–almost $6.9 million–has already been claimed for attorney fees, with an additional $1.7 million earmarked for “other costs.” That leaves just $18.7 million left for Netflix subscribers, past or present, who signed up for the service between May 9, 2005 and September 2, 2011. In case you’re wondering, that amount is estimated at a possible 40 million people, meaning a potential payday for each subscriber of…47 cents.
Don’t spend that all in one place.
(Admittedly, that’s a worse case scenario; the $18.7 million will be split between those who apply for their share, and it’s extremely unlikely that all 40 million possible applicants will end up doing so. Those who received the mid-November email about the settlement have until February 14 to file claims for their share of the settlement pie, and even then, the court will have one further hearing in March to finalize the settlement terms. In other words, nothing’s final at this point.)
(MORE: Walmart-Netflix Settlement to Be Paid Out in Walmart Gift Cards?)
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It gets worse. Last week, in what can genuinely be described as a surprise ruling, a judge in San Francisco granted Netflix summary judgment in the remaining class action lawsuit, dismissing charges of antitrust violations because–in further insult to Walmart–the retail giant wasn’t important enough to impact Netflix’s pricing strategy, especially at a time when Blockbuster and Amazon were larger and more important competitors.
In her ruling, U.S. District Judge Phyllis Hamilton wrote that, even if Walmart did present enough standing to impact Netflix’s thinking, “Not only does the agreement [between the two companies in 2005] expressly acknowledge the ‘independent’ nature of Walmart’s decision to exit the [DVD rental] market, but it furthermore expressly states that Walmart is free to re-enter the same market. Under these circumstances, the court cannot agree that the agreement on its face reflects a blatant agreement to eliminate Walmart from the online DVD rental market as a form of market allocation.”
The decision not only means that Netflix avoids a potentially embarrassing and costly trial next year–the court date had been set for February–but it’s validated in its earlier choice not to follow Walmart’s lead and opt for early settlement. Suddenly, all of the company’s statements that the suit had “no standing” seem confident and prescient, and not simply attempts to deny what could otherwise be a PR and financial disaster. But at the same time, it does raise the question: What was Walmart thinking?
PaidContent has a particularly conspiratorial theory–that Walmart took a fall in the form of a settlement because it is doing what Netflix accused it of doing: targeting Netflix’s subscriber base with marketing for Walmart’s competing Vudu service. I’m as much a conspiracy theorist as the next person, but this seems more than slightly ridiculous, resting as it does on the court approving the Walmart proposal as well as the dual costs of the $27.25 million and the red face it gets from not standing its legal ground the way Netflix did. Aren’t there easier and cheaper ways to get the word out about Vudu ? Ways that aren’t going to be as ultimately frustrating as telling newcomers “We’ve given you credit towards your first rental, but so little that you’ll have to sign up and pay in order for it to be of any use whatsoever”?
MORE: Wal-Mart May Pay $40 Million to Silence Lawsuit Over Netflix Pact
Graeme McMillan is a reporter at TIME. Find him on Twitter at @Graemem or on Facebook at Facebook/Graeme.McMillan. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.