A while ago, Neil Gaiman’s publishers made his wonderful book American Gods available as a free ebook for a limited time. They have now collated sales figures for the period of the promotion and sales were up during that time. Read Gaiman’s own comments about this.
On the same topic, Cory Doctorow is a big fan of making his books freely available as ebooks and has a good explanation, part of which is because it drives hard copy sales. I particularly like his comment that obscurity is a far greater danger for writers than piracy.
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