I price downloads as Pay What You Want, so you can have that for whatever price you'd like to pay. For the physical CDs, I'm charging $10-12 so that I can recoup the cost of making the CDs (mostly paying the musicians, licensing fees, recording, mastering, replication, etc.). Plus, they're going to come with a real spiffy package!
I would SO love it if my music was torrented 100,000 times. The more the merrier!
And AC...there's no way that it equates to 100,000 missed sales. Most people who torrent fall under two categories: those who would never buy the music anyway, and those who are looking to see if they like it before purchasing more. The former category is worthless, and the latter category are the potential fans that free downloads capture.
That's why all my music is on Bandcamp and fully streamable before purchase. I'd much rather have people be able to listen and decide if they are fans before spending any money. This way, I know that the people purchasing my music are fans and potential long-term backers. I'll take that over one-time disappointed purchasers anyday!
Sander's comment above makes me happy and encouraged about the state of things. It's precisely this kind of connect that I'm after as an artist and a human being. It's a bit sad that he was so surprised by my email response to him. That just speaks to the fact that we've gotten SO far away from personal connection that it is now the exception, not the rule. I hope that will change and am doing my part!
And LC...I don't think it's so much that you need to have a solid fan base as that you need to have the willingness to search out your would-be fans. The internet makes that so much easier. Artists willing to put some time into it are reaping the benefits!
And I can tell you that it is definitely a cumulative effect so far. What Mike didn't talk about was my Micropatronage (fan-funding) programs that have helped me raise fund for my last album and my tour. About 85% of the people who gave to my first program (CD) also gave to my second program (tour). They were also my biggest advocates in getting the word out the 2nd time around. So far so good!
And I think the key is that PWYW allows the consumer to decide what the product/service is worth TO THEM. The CD may be worth $1 to one person and $50 to another. I'm just giving them the opportunity (and the prodding) to make that decision. As you say, people generally do want to support things they like and will do so if asked.