The LQS buys the patterns and gets a shop kit that tells them what they need to cut each month. Sometimes it includes extra patterns like shams and table toppers to coordinate with the quilt. Rather than pass a lot of the cost onto the customers my LQS that buys these packages, it charges for the pattern and then the blocks are free each month when you return with a finished block. The owner has about 4 new kits in the shop for each BOM day and specials for the BOM'ers. She makes her money on the extras by getting people in the door, not the BOM program.
As a new quilter, I enjoyed the BOMs at the shop. The comraderie and just chatting with other quilters. However, I haven't finished my first two. One LQS uses Marti Michel's BOMs and I found I was spending 2-3 hours on each block. With the internet and quilt alongs on blogs, I get to use my stash (which is fun) and I get to do projects that interest me more than piecing a 70-piece 12.5" block.