It all started because of the discovery problem.
Too many things to choose from, more every day. No efficient way to alert the world about your service, your music, your book. How about giving it away to help the idea spread?
The simplest old school examples are radio (songs to hear for free, in in the hope that someone will buy them) and Oprah (give away all the secrets in your book in the hope that many will buy.)
There’s a line out the door of people eager to spread their ideas, because in a crowded marketplace, being ignored is the same as failure.