Whats the deal with all those free item banners

1

Ive been cruising around the net and almost every site i get to has a banner or pop up talking about free items like Psp’s ps2’s, ds’, so just wandering, is at simple as it seems i have been to one of them where all you had to do was sign up refer 5 freinds and sign up for one of many offers,it doesnt seem right.i have taught myself that in life there is always a catch,almost nothing,if anything is as simple as it seems, but whats stopping these people from 5 friends getting together each refering each other and siging up for 1 month of blockbuster online($14.00) and each getting a psp,that seems simple,what are the websites gaining from this that allows them to keep doing it? to me it seem like their losing around $1430.00 in cash , is there some catch to this FREE PSP concept.Please post because i really want a psp an dont have 300 dollars.