Originally Posted by Dave Vaughn
No matter which way you slice it, BOGO's cost money for the studio's. I'm not sure if the retailers are participating though...they may recoup the costs in rebates from the manufacturers based on POS data.
I agree, but only if the BOGO's take the place of a sale that would have happened anyway. I do feel that if they stimulate a sale that would not have happened otherwise, they are profitable for all concerned.
I also think that as the BOGO's happen with only select resellers, that those resellers are taking part - ie: it's not just a half price sale on discs paid for by the studios available to any reseller, rather that select resellers are getting a discount, conditionally, based on their running the BOGO.
Properly run, on catalogue SKU's, not on day/date releases, BOGO's are probably profitable for all concerned, and good for moving quantities of titles.
Once Hi-Def becomes more mainstream, the need for BOGO's would disappear, but in the meantime, I see it as a way for the studios to increase both their sales volume and their profitability. As a side effect, early adopters get hooked on building a catalogue.
Oh, and thanks for your predictions in the Nielsen thread - I hope you find a way to continue.