Aren't you in the perfect position to establish a premium subscription for users, establishing a market place for musicians without the labels? Say, a user could choose the ad-supported model or a model where he deposits some money in a soundcloud account. A musician can then have some songs available for free, some songs available with ads played beforehand or some soungs available easily for a micropayment from the user's soundcloud account (say 5 cents). Soundcloud gets 30%, the musician 70%. If you love the song or album, you sell unlimited access (and download) to the song or album for something decided by the musician.
Just because ads are a horrible way to monetise a web endeavour.
From the linked article: "Eventually, [SoundCloud] plans to introduce a paid subscription that will let listeners skip those ads, as they can with Spotify and other licensed services."
Subscriptions and rev shares are generally far less friction than charging up an account and explicitly giving a micropayment to an artist. I think SoundCloud already is a "marketplace" where independent artists can function without labels (if they want to do all the other work that labels cover), just that currently all transactions happen outside of the platform. That said, I don't have any more info about how a premium subscription for users would function.
Just because ads are a horrible way to monetise a web endeavour.