Ad 2, you’ll be surprised to hear the labels only held cumulative 20% stake up to the IPO and all of them subsequently wound it down. Their stake is now insignificant.

However, they had, have, and will always have, enormous leverage due to licensing-they’re monopolists and Spotify can either agree to whatever the terms are, or shut itself down.

Imagine if Netflix never started producing original content. They’d be at mercy of others or, more probably, already dead. Music doesn’t work that way and Spotify can’t just generate a bunch of pop hits to avoid paying the labels. They are trying to do that with podcasts.

Spotify here is the victim as much as the artists.

When you read artists' blog posts you can see they get peanuts. Not due to Spotify - due to the recording deals.

If you want an exhaustive but eye-opening account of all of the details, I recommend "All you need to know about the music business" by Don Passman.

A quick search suggests a very steep drop off from the top earners.

‘At 100 million streams, artists can earn approximately $300,000-$500,000 in gross royalties. However, the actual amount reaching the artist varies dramatically based on their contracts. Major label artists receive $90,000-$150,000 after the label’s cut, while independent artists could keep $255,000-$425,000 after distributor fees.’ https://rebelmusicz.com/how-much-do-artists-make-on-spotify/

That's basically how radio is accounted for in royalties, as well.

With Spotify knowing exactly who listened to what, it could be more precise (and arguably more susceptible to the fraud), but tbh what they do is standard (compulsory licensing) industry practice.