You might know that I'm a science fiction novelist and that I release all my books online for free (using the excellent, free and simple Creative Commons licences) simultaneously with their print publication by mainstream publishers (HarperCollins in the UK, Tor in the US).
I've explained at length elsewhere exactly why I do this, so I won't go into detail here, except to summarise by saying I don't think we can stop others from copying – it's a lost cause. Copying is actually wonderful, and I have copied my head off since I first snuck into the photocopy room at my dad's office in 1980. My problem isn't piracy, it's obscurity, and free ebooks generate more sales than they displace.
With that out of the way, let's get down to cases.
First, why do we need publishers if we can just release ebooks and make the print available through one of the many excellent print-on-demand houses such as lulu.com? Well, a traditional publisher does a lot for you that is unrelated to printing books, from preparing the manuscript to ensuring that the book connects with an audience by wooing reviewers to talk the book up, booksellers to put it in the path of readers, librarians to put it on the shelf and, of course, by paying for a certain amount of marketing in the speciality and general press.
Releasing a book as a free download isn't newsworthy in and of itself. It was, once upon a time, especially when that book had the backing of a major publisher. Publishers are often characterised as being conservative about the net, so it was surprising when it happened. These days, many writers have convinced their publishers to dip their toes in the water on this, and it's simply not notable when it happens again.
Which is not to say that free downloads have no role when it comes to promotion, publicity and marketing. Their main effect is to magnify any good feeling your book has generated, by making it simple for people who love the book to get it under the nose of their social circle.
I've had readers email their friends the whole book with a choice titbit at the top, "Doesn't this remind you of ...?" or "I knew you'd go crazy for ..." Ebooks are small: they're text-blobs. One reader pasted a copy of one of my novels into a mailing list with 60,000 like-minded (I hope) souls on it.
Booksellers – I'm a former one myself – know that personal recommendations from friends are the best way to sell books – better than reviews, better than covers, better than store-placement. A publisher's publicity and marketing for a book is an excellent way to get it into some readers' hands, and the word of mouth enabled by freely copyable ebooks then acts as a force-multiplier to expand the publisher's efforts. Whether your "natural" audience is small or large, free downloads generally expand it, by letting readers make informed guesses about who else will like it, and giving those readers a persuasive tool for closing the sale.
Which is not to say that there aren't writers who have other means of getting their work into some pool of readers' hands initially, writers who might benefit from going it alone, or using a publisher for limited services, augmented by the writer's own in-built megaphone.
But publisher or no, the important thing to remember is that a free ebook isn't publicity, it's a tool for expanding your existing publicity and marketing.
It follows that the right time to do a free ebook release is when the printed book is available, so that the deal can be consummated quickly. Asking internet users to remember how intriguing that download they found all those months ago was until the book hits the shelf is impractical.
The internet's attention span is about five minutes, so unless the reader can do something affirmative to acquire the book within five minutes of being enticed by the ebook, there's a good chance they never will.