Advertising on the free version, subscription income on the premium version. The free version can only be used on a PC. With premium you can listen on mobile devices and also download tracks for offline listening that are DRM-controlled to be available only while you're an active subscriber.
Yeah, I'm lucky. I got in on the ground floor in the U.S. You had to request an invite, and a few days later you'd get an activation email. I guess that's no longer an option. Sounds like an antitrust issue to me, frankly.