Why wouldn't it scale? It is the same strategy that Apple uses: build a compelling base product, and then sell additional services.
You could still have a free service that displays ads.
You could still have a free service that displays ads.
Apple's track record of not needing to track me or sell my personal information to prop up its business models, because they launch products that have real "get the end users to pay money for it" business models, is one reason why I stick with their products.