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Thread: Rogers Video does not know how to do business ...

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    Rogers Video does not know how to do business ...

    Just found out an interesting fact about Rogers Video ... For those aren't familiar with subsidies:

    When private dealers sell phones, the store gets subsidized based on the phone, plan and contract length. For example ... they sell an 8390 on a $25 2 year plan for $75 in-store ... The cost of the phone to the dealer is about $250 ... Rogers AT&T will subsidize roughly $280 towards the phone.

    Rogers video does not get subsidized whatsoever !!! For every FREE C333 we give away .... the store looses over $200, not to mention freebies given away along with the phone (Accessories, many free rentals).

    I was looking at the profits and losses, the video revenue is pretty good ... however looking at the wireless revenue for last month ... out store lost over $15,000 on sellling phones. No managers know why the budget is set-up like that. Some mgr's even discourage their staff from selling phones to avoid being in the hold for that period.

    We have the V60T for blowout price of $99 on a 2 year contract. $149 on a 1 year.

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    Re: Rogers Video does not know how to do business ...

    Originally posted by djproc
    Just found out an interesting fact about Rogers Video ... For those aren't familiar with subsidies:

    When private dealers sell phones, the store gets subsidized based on the phone, plan and contract length. For example ... they sell an 8390 on a $25 2 year plan for $75 in-store ... The cost of the phone to the dealer is about $250 ... Rogers AT&T will subsidize roughly $280 towards the phone.

    Rogers video does not get subsidized whatsoever !!! For every FREE C333 we give away .... the store looses over $200, not to mention freebies given away along with the phone (Accessories, many free rentals).

    I was looking at the profits and losses, the video revenue is pretty good ... however looking at the wireless revenue for last month ... out store lost over $15,000 on sellling phones. No managers know why the budget is set-up like that. Some mgr's even discourage their staff from selling phones to avoid being in the hold for that period.

    We have the V60T for blowout price of $99 on a 2 year contract. $149 on a 1 year.
    WoW that is interesting thanx for the info.But do all Rogers Video stores have a section for cell phones?

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    well rogers video are company owned.. so for rogers it looks better if all their divisions make some money (Rogers Wireless) than if only one does (Rogers Video) ... bleh they'll change it if rogers video starts to lose too much money

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    Rogers Video

    As the video stores are owned corporately, the business model that they have right from the get go of inception of these stores is for them to lose money. It is a way for them to write down their (parent company) profits from other sectors. I would say they are quite smart in doing so...It is quite a bonus for your regular Joe Consumer!!

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    as false as it may seem, when you're as big as rogers chances are you've got some pretty good management.... i think it's a case of them playing around with the accounting, rahter than sheer stupidity


    i remember a while back blockbuster was in the news about how it's so easy for these video rental places to fix the books because of the depreciation on their inventory

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    I'm confused, if you got a subsidy on the phones, would that just be Rogers giving Rogers a discount on phones? In the grand scheme of things doesn't it all balance out? Rogers (getting a subsidy) saves $100 off the price of a phone, but Rogers loses a $100 because of a subsidy they gave?? I understand it looks bad for your gross margin, but to the big-shots it all balances out.... right?
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    Rogers looses money when they subsidize a phone. That is why they require a contract to get a phone subsidy. They make their money back from what you pay month to month. I have been told by the higher ups that it takes approximatelly 18 months on average to make back the money that was given out as a subsidy. And customers wonder why they can't get a newly subsidized phone every 2-3 months.
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    Originally posted by Heero Yuy
    Rogers looses money when they subsidize a phone. That is why they require a contract to get a phone subsidy. They make their money back from what you pay month to month. I have been told by the higher ups that it takes approximatelly 18 months on average to make back the money that was given out as a subsidy. And customers wonder why they can't get a newly subsidized phone every 2-3 months.
    Right, but wasn't the question "why doesnt Rogers pay the subsidies to Rogers"?

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    Originally posted by Nikki
    Right, but wasn't the question "why doesnt Rogers pay the subsidies to Rogers"?
    Rogers own Rogers Video so why bother to do extra paperwork with subsidies? Any way you look at it the money comes out of Rogers' pocket. What would be the since of paying yourself for something as you would basically be transferring money.

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    Originally posted by Heero Yuy
    Rogers own Rogers Video so why bother to do extra paperwork with subsidies? Any way you look at it the money comes out of Rogers' pocket. What would be the since of paying yourself for something as you would basically be transferring money.
    Thanks! That is what I was trying to get at...

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    i know a friend that operates a video store and this info would help... how do they play with the books? any basic concept?

    Originally posted by rexdalegangksta
    as false as it may seem, when you're as big as rogers chances are you've got some pretty good management.... i think it's a case of them playing around with the accounting, rahter than sheer stupidity


    i remember a while back blockbuster was in the news about how it's so easy for these video rental places to fix the books because of the depreciation on their inventory

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    It's called a creative accounting.. do a search on it in google.. it's all legal, unless the GAAP's are bend into unethical actions.

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    accounting

    cooking the books or creative accounting is done quite openly and widely in corporate Canada (just not on a such a big scale like Enron or WorldCom)...it is just that they don't get noticed like the others...it works great for Rogers because Rogers Video was created for the purpose and this purpose alone...the more money Rogers Video loses the more happier Rogers (parent company) would be because they could write off more of the R&D and development; construction costs and also Canadian GAAP is not a strict as US GAAP now.

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    i know about most scheme to avoid taxes... even using the wireless division as a loss leader.. but how can you claim videos are depreciating capital and therefore a loss, unless you sell them for a loss?

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    A company can only lose so much money. Its nice to be able to use your loses as a tax write-off. There comes a point where you lose investors or shareholders. Take a look at the Blue Jays. They are losing money hand over fist. It is not going to be too much longer where the tax write-off is not economically viable and they must unload the team at a huge loss.

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