Mojaxx from DJCity recently vented (in a good way) about why DJs should stop playing low quality Soundcloud / Youtube rips. Check out his video opinion piece and decide for yourself.
Apart from the obvious copyright legalities and the moral issues with ripping music, it's always going to be of questionable quality. We always recommend playing the best quality files available and Serato DJ supports the following file formats:
Fixed and variable bit rate (VBR) files are both supported.
Please note: Tracks protected by DRM are not compatible with Serato DJ. SEE DRM FOR MORE INFO