Good thread!
I've been running my label for 10 years now and for the last few years although sometimes it might make a little money (mainly with the represses), it pretty much just sustains itself so it's not like i profit from it anyway, if i could press vinyl and give it away for free without losing money then i would, but obviously that's not possible..
I'd completely go the route of giving the ep's away for free as i'm sure it would reach a larger audience (maybe) except for the fact that it would mean going digital only and i do love me vinyl...
I'm sure the day is looming when it will become almost impossible for smaller labels to release vinyl but i'm clinging on to the edge of that cliff by my fingernails waiting for the big man to stamp on my hands .. and i have to say, enjoying the suspense ...