Let's be honest, you aren't required to use a record label. Record labels just advertise, which definitely blow up some musicians.
In contrast, take the rapper Tom McDonald, his music actually hit the top 100 charts[1][2] and he's not signed to anyone. Just him and his girlfriend creating music. Was trending as the #1 download on iTunes for a couple weeks, etc.
Artists make a deal with the devil, make more money, then complain. Yet, with today's ability to distribute - it's not required.
I do think there should be an update to the spotify payout system, but Spotify doesn't have negotiating power; they need the record labels. With the record labels Spotify can get improved music, etc. Spotify is paying for the privilege that's why the smaller artists aren't making very much (the premium payments go to record labels).
In fairness, Tom MacDonald gets a lot of external publicity from conservatives; he's mostly a right-wing political rapper.
I've seen a big rise in conservative rappers on YouTube. I've got a conspiracy theory that the GOP is funding them like a record label. If so, it's a sweet deal for artists. The GOP cares far more about cultural effects than they do the money from the music.
I don’t doubt there is some of that, probably from all sides frankly.
However, the major point is that you don’t need the distribution.
Louis CK famously released a comedy special online with a download and just asked people to pay and not copy and share. He said he made more money off that than any other special he’d done.
That and copyright. If spotify didn't have to pay anyone to stream the music I listen to by dead artists there would be a lot more to go around with the people writing music today.
The unfortunate part is that the artists have basically no power when bargaining with the record labels.