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.
I picked up some great swag at the concert last night.
Prices shown in USD.
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