Can someone explain how this works to me :P

There's no average price for Indie Royale. There's a set minimum (varies based on the bundle) which goes up the more people who buy it unless you pay over a certain amount, at which point you knock the price down for everyone else.

Well I guess "free" music isnt that bad since its getting the newer artist music out there

I'm curious about it occasionaly. If I like the music, I'll be more inclined to buy it again some other time.

I always download the music. Some of it is quite good. And I'm too lazy to go out and steal my own music, so it works out nicely for me