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All he did was take he age old model that the music industry has perfected (well, at least until the last several years) and he applied it to books. He gave one of his books away for free for 1 month and saw a bump in sales from it. Great. That is just like a record label releasing a single. They play it on the radio, make a video you can watch on TV and many of them give you the single for free on their site. You hear the song, you like it and go buy the album. It's pretty much the same thing.
What he did is give people a taste, just as he says, most people hear about authors through friends and other people loaning them books or telling them about books. He didn't give away his entire catalog of books, nor is he giving away his new books. He sounds like he isn't caring if people do put up his old stuff for free out there, because he knows he can use that free publicity to sell his new stuff.
As others have said, he is also very well known and can do things like this. If some unknown writer put out two books, one for sale and one for free, most people would not download the free on nor buy the for sale one because they have no idea who he is.
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