The free option will stay in place. CEO Steve Purdham will hope the mobile pricing, similar to Spotify’s own, will be successful, just as Spotify’s has driven up its paid subs - the other option, which removes ads, may not be enough to convince many users - We7 says each of its songs has 3.7 ad opportunities, but it doesn’t have that many ads anyway.

We7 first tested subs in April 209. The site claims 2.5 million monthly users, but it’s likely many of those are occasional listeners of the service’s off-site music embed widgets.

This could be a make-or-break year for We7 - launched in 2007 with funding from investors including Peter Gabriel, the original idea was to offer free downloads with embedded audio ads, but that didn’t work out; now it offers both streaming and a la carte purchases, and visual ads in those embeds - a great idea because ad agencies are more used to ad banners than audio pre-rolls and because, if We7 can make itself a platform for embedding music anywhere, its potential outgoing ad impressions could spiral up.

But the sector is challenged by whether income covers royalty outgoings. Purdham told Midem he has to pay a penny per stream. And he said at our October mixer: “There’s a mismatch—we know mathematically we can make it work, but when and whether we have enough money to do that are two different questions altogether. There’s a basic disparity between ... the cost of a stream and of an advertising impression.” He bemoaned a penny-a-stream royalty rate.”

Last.fm has also been forced to charge €3 a month for non-on-demand streaming outside the UK, US and Germany. We understand We7 has raised a funding round to take it through this next phase.