I release my own music for free. That's a choice that I am happy to have.
It actually amazes me now that it is even possible
to get hold of something for free that many years ago would have cost money regardless of how it is distributed.
The main issue I have is the inflation that record companies put on their product. I can go into a local store and buy DVDs for £3. Just yesterday, I bought Terry Gilliam's 'Brazil', 'Full Metal Jacket', 'Philadelphia' and the latest 'Rambo' (just for kicks). Sum total? £16. That averages £4 a film. That's four pounds for sound, for video, etc (and often higher-quality sound). CDs were being sold in the same shop. Some were two for ten pounds (fine) but the majority were at the £9 and even up to £25.
Having spent some time studying the music industry, it frustrates me that record companies think that is acceptable. Very little goes back to the artist. What has happened is that people now have the option to pay nothing or pay a vastly inflated price. If CDs were actually priced fairly - and more went to the artist - then record companies wouldn't be in this position and instead of large piracy amongst adults with disposable incomes, the piracy would be more limited.
Record companies were very slow to adapt to a changing marketplace. Had CDs been available for just a few pounds in the late 90s then piracy would never have taken off online. Quite simply, they never saw it coming and have been paying every day since then for their lack of foresight. The writing was on the wall and they just didn't read it. It wouldn't have been easy to change things but the business model was the same business model that had been run some twenty years previously - when the only 'outside' distribution was radio and low-quality cassette tapes.
Now iTunes is selling songs for what I consider to be just about the top-end of fair. I'm now happy to pay a little for the convenience of downloading, Apple (and indeed Amazon) have a good model going that gives you a viable alternative to piracy if you don't own huge amounts of cash. The price is still a little high but we've seen that the industry is starting to adapt. Is it too late? Possibly.
When Radiohead released 'In Rainbows' in 2007 with no fixed price attached, the average price was not 'free'. The average price was £4 (http://en.wikipedia.org/wiki/In_Rainbows#Reception
for citation). That tells me that the public think this is the fair price. I would largely agree with that analysis. The real crime here is how little goes back to the artist and it would be more than possible for all bands to make more money by avoiding those channels if they could. The difficulty is, of course, advertising your name and that's just about the only thing record companies are good for now that their distribution model has been largely surplanted.