So if there is a big market for people to temporarily buy and resell something then there will need be be a fair number of original sales unless people are prepared to wait a long time to get their "turn".
With TBP in theory you can give the entire planet parallel access to something by seeding only one original sale.
On the other hand, by selling on the second hand market the original purchaser may make others less likely to buy the content first hand, harming the rights holder.
The latter effect is almost certainly more significant than the former, so the net result is negative as far as the rights holders are concerned.
There's also times when I've bought a game or something with the intention of playing it and then re-selling it, but I just never got around to the reselling part.
Of course there may be other indirect benefits, like pirating a game and then recommending it to a friend who buys it at full price and alternative business models.
When you say free distribution it is not quite clear whether you mean piracy or the IP owner providing some free content as a kind of "loss leader".
I have always had a feeling that piracy benefits certain types of goods more than others. For example an obscure indie band with fans exchanging mixtapes or torrents reducing their obscuring somewhat.
OTOH something huge and mainstream being pirated by people who just didn't want to pay for it is probably more harmful.
However, it's important to note that a lot of the content that is consumed for free wouldn't be consumed otherwise. Just because you are not going to pirate something, it doesn't mean you are going to pay for it. And from the producer's side, it's better if his product is consumed than if it isn't, if the distribution and duplication is free.
As far as free distribution goes, I don't think it makes a large difference whether or not it's through official or illegal means (though it certainly merits studying and testing). Having your product for free on your website and having it on a torrent site probably both make you a sort of "loss leader" in a very similar way. You may have different costs and the visibility to some demographics may vary, but I doubt it matters much.
I just think the benefits of free distribution need to be better weighted. We just have no idea how much companies are losing or winning by having their content pirated.
Although I do feel that this might insentivise draconian DRM. If you are going to buy $50 worth of content per month and then pirate everything else you are probably going to pirate the stuff that is most easy to pirate.
For example I know people who pirate just about every PC game because it is as simple as downloading the torrent, installing and sometimes cracking. OTOH they don't pirate iOS games because they don't want to jailbreak their iPhones.
The result is that iOS game developers get more money from them not because they like iOS games more but because iOS is the more locked down platform.