I just have to say....

Here is a blog post worth mentioning; Compared to perfect: the price/value mismatch in content
To cut to the chase here is the bit that grabbed me;
In fact, I do think it's probably true that a low price increases the negative feedback. That's because a low price exposes the work to individuals that might not be raving fans.
Free is a valid marketing strategy. In fact it's almost impossible for an idea to have mass impact without some sort of free (TV, radio, webpages, online videos... they're all free).  At the same time, it's not clear to me that cheaper content outperforms expensive in many areas. As the marginal cost of delivering content drops to zero (all digital content meets this definition), I think there are valid marketing reasons to do the opposite of what economists expect.
Free gets you mass. Free, though, isn't always the price that will help you achieve your goals.
Price is often a signalling mechanism, and perhaps nowhere more than in the area of content. Free enables your idea to spread, price, on the other hand, signals individuals and often ends up putting your idea in the right place. Mass shouldn't always be the goal. Impact may matter more.
This post was common (business) sense. However my view is if you write stand alone novels, don't offer free content/books unless you have an established backlist to rival Nora Roberts. It wont work otherwise (resists urge to roll eyes to make grandmother proud of manners). If you are a series writer, I am of the opinion free for xyz time is better than cheap forever.
Seriously, there is a key difference between free and cheap. He's mixed the two up; low price and free are not interchangeable in this context. With free you do get mass, and with the masses comes dead weight - people simply surfing for a free read, and ready to vomit thoughtless reviews all over the place. But ... there is a strong likeliness you will reach your target audience who you can (who has the answer ready?) ... upsell to. Here is where your backlist, or second, and third books, yada blah, comes in.
Cheap *shudder*. I dislike seeing Indie Authors marketing books using this word. Your work is NOT cheap. You are forced to undervalue it for a number of reasons, but it is not cheap. 
Anyway, this was a bloody good post. Unbalanced in evaluating the free marketing model, but good, yes?