There should be a way for us to play private videos on Soundcloud (ie, the roll20 "bot" has a soundcloud account and we can give that account access to the files). I added a bunch of copyrighted gaming music a week ago and nothing has happened to it yet. I am hopeful that as long as no one reports it, it will stay there (I gave the music ambiguous names, so people won't find it if they are actually looking for music from the games).
I can understand why roll20 won't let us upload our own music to the jukebox as that would be a massive amount of bandwidth being used, but there should be some feature, at least in Google Hangouts, that let's us stream music from the DM's computer.
A possible workaround would be to just host an internet radio station and have all of your players connect to it. That's another additional piece to the puzzle though, if you are already using hangouts, so I don't know how many hurdles players should be expected to go through to get this functionality.