Tapulous head of business development Tim O’Brien made headlines after disclosing during a panel discussion at MIDEM that 1 million of the 2.5 million downloads the iPhone game Tap Tap Revenge 3 saw in its first two months of availability were the result of piracy.

Even more interestingly, O’Brien says Tapulous deals with the problem by serving ads to the pirated versions of the game even more aggressively than to those that paid for it, hoping to salvage some profit out of the situation.

O’Brien shared those same reflections with Billboard earlier as part of a column on mobile app piracy that will print in the next issue (in fact it was Billboard’s questioning that led O’Brien to dig up the stats he eventually disclosed to all at MIDEM). Putting the issue of piracy aside, the strategy brings up some interesting questions about how to use free apps to drive revenue.

Leaving aside the notion of giving away free music to make money on other things like merch and ticket sales (that’s actually a whole different model and discussion). This is about giving away free apps through which music and other products can be sold. The Tapulous model has always been a freemium one. It gives away the mobile-based rhythm game and makes money by serving ads through the game and by selling news music to play. The only reason Tap Tap Revenge 3 carried a charge is because at the time of release Apple would only allow paid apps to feature additional in-app commerce.

Once Apple changed that rule, Tapulous soon removed the 99-cent fee for Tap Tap Revenge and made it a free game (rendering the whole piracy issue largely irrelevant).

O’Brien tells Billboard it has now sold more than 2 million songs through Tap Tap Revenge 3, with Ke$ha emerging as the best-selling artist with more than 66,000 downloads since Jan. 9.

Shazam is another mobile app that’s proven its ability to make money from a free app. It offers both a limited-use free version of its music ID software and a $5 premium edition. The company revealed at MIDEM that 13% of users who ID a song using the service click the “buy” link that comes with it to visit the iTunes store (or about 300,000 a day). The company cannot track how many actually buy the song once there, however, but it’s still a decent indication of how a free service can drive potential sales.

But before using these figures as proof that the music industry should be giving away more stuff, let’s take a closer look as what’s actually being provided for free. Tap Tap Revenge 3 is free, and it includes licensed music, but much of the music that comes with the game are from emerging and unsigned artists. The ads served through the game can easily cover the licensing costs for both these and the minority of better-selling acts included. The extra downloadable content—which is primarily coming from bigger-name acts—all carries a fee.

The Shazam app meanwhile doesn’t contain any content and requires no music licensing to provide. It’s no skin of the music industry’s nose if it gives away 50 million copies, as they profit only where their music is accessed, such as the sales it drives.

Simply put, neither carry any sort of content or offer any type of service that could be considered as potentially cannibalizing to music sales. In fact they only help potentially drive music sales, so offering those for free is a no brainer.

But pricing down music so ad-supported services can offer free streaming more affordably, or somehow using P2P as a marketing tool with no revenue arrangement in place, is an entirely different matter.