Promotional merchandise for a band, record label, or other entity in the
music business, usually distributed at concerts.
May include
t-shirts, stickers, promo CDs, posters, etc. Often
free, but not necessarily; a t-shirt or record purchased at a concert might still be considered swag, especially if it is a design or release that is not readily available in the mass market.
Many independent record labels throw in a handful of free swag when they
ship out mail-order packages (stickers, sampler CDs, etc).
The chief difference between swag and regular merchandise is that its purpose is not to make a profit, but to promote the band/label, and reward its supporters by giving them something cool and
unique.