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The band Beatnik Turtle has published an excellent Indie Band Survival Guide. Free (Beatnik Turtle's New & Improved Attribution-NonCommercial-ShareAlike-Don'tMakeItSuck License) on the web.
We're going to break distribution into two areas; first, how to sell your music, and second, how to get your music heard. As you think about how to get your music out there, you need to consider how much of your music to give away, compared to how much you want to sell. We, as independent bands, operate in a strange part of the industry and are constantly deciding how much of our best music to give away, compared to how much of it that we are going to keep. We need to put our best foot forward by giving people our best songs in order to entice them to listen to our music. But then we're removing their desire to purchase them, which is especially true as more people buy from digital services that sell music by the song rather than the album. In general, we suggest erring on the side of giving away too much of your music rather than the opposite. A non-paying fan is better than no fan at all, because you might be able to interest them in T-Shirts, future albums, or shows.
(From Lawrence Lessig's blog.)