this Wired.com article is a good insight on the benefits and models that exist within the FREE economy...we dont condone giving all you have away, but can verify it has worked for us on occasion.
a few years back we did what some saw as unthinkable and released some new album projects for free on the internet(How About A Game Of Chess? & It's Right To Be Civil).
no catch, a giveaway, not old material that was previously signed to other labels either, that doesnt count...1st time your hearing this it was a free giveaway, dj's that played it on their shows, did so as a result of receiving it the same way fans on our mailing list did...and there was a large discussion about this type of giveaway with many speculating that it was crazy, seriously hurting sales etc.
it wasnt all true, we'd do the same again, it took Radiohead to do pretty much the same thing for people to take notice on a global scale, Prince was in on it giving away an album as a covermount CD with a Sunday newspaper, however the 'music industry' didnt greet his generosity with the same enthusiasm as they did Radiohead even though it was essentially the same thing.
for the record, many hiphop producers have been doing this for years and within drum & bass although it wasnt intended to be this way, the AIM revolution has turned 'giving dj's your tracks' into 'giving away your tracks', as sales have declined but everybody has your tune playing out???
if anything, Radiohead needed zero marketing budget when they finally released the CD which probably got more PR as a result of their giveaway than if they'd gone down the traditional marketing route...but it's not for everyone this approach, you should start with good material/music as if the product isnt up to par, you cant even give it away for free.