The biggest problem I see with the pay-per play rates is that it creates misaligned incentives. Theoretically, if you had infinite ad inventory that monetized at consistent rate your costs would scale linearly with your revenue. The reality is that pay-per-play causes you to disincentivize the exact behavior you want – more listening. This is particularly killer for the subscription services that are stuck with penny per play with no cap. Not to mention startups…

This leads me to the conclusion that revenue sharing is going to have to be a key component of any model, advertising supported or not.