https://en.wikipedia.org/wiki/Criticism_of_Spotify
I can't really disagree with anything you said. I just view it from a different perspective.
(1) Inflation adjusted, per capita we spend 5x less for music now than we did 20 years ago. Is that because Spotify doesn't charge power users more? Is it because users won't accept higher rates for song rentals? Regardless of the cause, there's less money to distribute.
(2) Popular music is more popular than ever. For a variety of reasons (some potentially Spotify-induced -- e.g., it's pretty hard for me to get it to recommend somebody who isn't soundly leading a genre it thinks I might be interested in), the top X% of artists are more listened to than ever, and that's going to exacerbate any other problems for the long tail of artists.
(2a) That idea is affecting a lot of industries right now. At some point in recent decades it was easy to be the best <thing> in your local small town or group of peers and get all the business. Plenty of formerly in-person industries are now competing globally though. E.g., I would have a hard time recommending the best ML practitioner in my hometown as a teacher rather than just taking Andrew Ng's courses. I'm not sure how that's going to play out in general, but if the top 1% of the population in any field can make everything we want/need then the idea of having to work for a living might need to be revisited? Maybe we'll eventually all transition to biomedical research when nothing else is scarce? In any event, in the short term a lot of professions are being disrupted.
I have actually read the article, and that's wholly compatible with my take on things (that before and after Spotify artists are paid roughly proportionally to how much their music is "used"). There are two interesting points that can create the apparent problem/paradox you're seeing:
(1) It's interesting that a typical power user before Spotify would pay more money for more music, and now there's a flat rate (or counting ads, two flat rates).
(2) The definition of "usage" has shifted a bit. Skipping a lot of details, before recordings people paid per performance, with the introduction of CDs and whatnot people are able to pay per unique song listened to (with power users typically though not necessarily buying more CDs), and Spotify shifts things back so that artists are compensated in terms of total listen time.
It's probably true that power users should pay more (if not, and if artists are appropriately compensated, then everyone else is subsidizing their use), and there can be an interesting discussion around how listeners actually derive value from music and if unique songs matter more than total minutes (or if a more complicated but less explainable metric ought to be used), but the big guys dominating everything is not a new phenomenon.
As an aside, the advertising, distribution channels, and network effects enabling the big guys to dominate everything to the extent they do _is_ moderately new on a human timescale, but that would be true independent of the payment scheme and doesn't seem super relevant to the discussion.