I had same problem but I thought that was because I'm running on localhost.
I found a workaround that worked for me. Its very quirky and by no means ideal. You might be able to pull something from this for a live installation...
www.joomlamusicsolutions.com/en/forum/ge...eneral-problems.html
Basically put your sub folder in the scanner and play around with the number of "/" or "\". You might want to edit the songs folder too. In album manager>params. If your player does not play then use phpmyadmin and check paths to .mp3's are correct.