We7, who have been in the business of giving away ad-supported downloads, have signed up a whole slew of major labels (only Universal have failed to join in so far). At the same time, they're moving away from the download model to concentrate more on streams instead.
The implication is clear, of course: ad-supported downloads aren't attractive to anyone and you're never going to get rich offering them to punters. This is further shown by the withdrawal of ad-supported downloads outside the UK altogether. The company says:
“Outside the UK, we will be suspending the ability to download free tracks with ads.”
“Our dream is to eventually give you the choice to stream or download any music you want, for free. The barriers are many, but we are confident that we eventually deliver on our dream, even though it may be in small patient steps.”
The longest journey starts with a single step, it's true; on the other hand, if you're taking a single step while the kid down the street has stolen a car and is offering a free ride for everyone, you might find yourself walking alone.