I cannot answer your first question.
Advertising revenues are just one possible source of income.
Another is sale of data collected from users. Think of all the times you are asked to provide your email address, your name, etc. Who cares what form the compensation takes - money vs. valuable info that otherwise you would have to pay for. While certain record co's might be a problem to get licenses from,the bottom line is that a license can generally be had for some kind of consideration. Note the attraction of investor capital that has now been infused into Napster.