Music Marketing Author and Course Instructor
Of course giving away a free record is nothing new huge bands who've had major label support throughout their careers (Radiohead, Prince, Nine Inch Nails, etc) have the luxury of releasing free music to their massive fanbases with the understanding that doing so will fill the seats in the stadiums when they are on tour. But how does a band capitalize on free music when they don't have this built in community, when they are not a household name?
Although Mercury Rev was signed to Columbia for their first two records, the bulk of their material was released by then-independent V2 (Richard Branson's post-Virgin label). The band has fluttered close to mainstream success (1998's Deserter Songs is a masterpiece), but has remained an indie favorite playing mostly mid-sized venues in the US.
Indie Label Yep Rock (who signed Mercury Rev for their latest, Snowflake Midnight) has put together a great plan to leverage free music to build up the bands fanbase, and draw interest to their new release. Promotion for the new record draws folks back to their Website (not their Myspace!), where the band is giving away Snowflake Midnight's companion release Strange Attractor, another full length record. Folks that sign up for the Mercury Rev mailing list get a link to download Strange Attractor as a high quality DRM-free mp3 that can be played on any device. The free release became available on the same day as their paid release hit the stores.
I think this is good marketing: they're providing a value add for old fans, giving new fans a reason to get on board, and most importantly, collecting a ton of email addresses that they can use down the line to announce tour dates, sell merch, sell tickets etc. And the fact that they are providing music that people can own outright, share, play at parties etc is huge. The fans are part of the action, and are playing a part in making the release of the proper record a true event (via word of mouth). There is SO much music out there, that it is easy for folks to get distracted. Bands need to take special care in keeping their existing fanbase interested, providing incentives for potential new fans, and above all continuing to build their community.