Most people already know what's on an album before they buy it. Your fanbase isn't going to change by giving out free CDs. If people like your music they will go to your concerts whether you give your CD's out for free or not. But most artists do give out some free stuff anyways. Whether it be the artist or the label.
However there is a balance to dealing with fans. You can go the Metallica route and make fans hate you or you can go the Dave Matthews way and lose a ton of money because you want to make friends. Neither is a good business model.

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