Agent to the Stars. How to give a book away free and make money from it
The original freebie in 1999 earned him $4000+ That would be more than a remaindered novel would have gotten him in royalties. In 2005, there was a limited edition of 1500 books, some of which are now selling for $100+ on eBay. In 2008, it came out as a trade paperback. In 2010, it finally went to mass market paperback. What creative people need more than anything is exposure, and freebie = exposure. Naturally he doesn't want downloaders selling his book to someone else, or to have it downloaded without attribution. However, the existence of these possibilities have not at all stopped him from making a nice chunk of change on the book.
http://www.scalzi.com/agent/archives/003068.html
Agent to the Stars is a novel by John Scalzi. It tells the story of Tom Stein, a young Hollywood agent who is hired by an alien race to handle the revelation of their presence to humanity.
Scalzi started Agent to the Stars in 1997 as his "practice" novel, to see if he could write a novel. He published it as a shareware novel on his web site in 1999, requesting that readers send him $1 if they liked the story.[1] After five years, during which he reports he made about $4,000, he stopped asking for further donations.
After the publication of Scalzi's second book, Old Man's War, by Tor Books, a limited edition of Agent to the Stars was published in 2005 by Subterranean Press, with a cover by Mike Krahulik of Penny Arcade fame. Tor later released a trade paperback edition in November, 2008, and a mass market edition in December, 2010.[2] An audiobook version narrated by Wil Wheaton was released on December 7, 2010.