[Wyoming23]

Your guess is close to correct but with some critical differences regarding the power dynamics and incentives between Spotify and record labels.

The record labels pulled off the ultimate coup right when technology was making them irrelevant. Ethically, they should have negotiated for a larger revenue sharing with the artists, and then taken their percentage from that. But they realized they could make far more money by forcing Spotify to give them equity in exchange for screwing over the artists.

The end result is that the record labels simultaneously were negotiating supposedly on behalf of the creators against the streaming platforms, while simultaneously becoming owners of the streaming platforms. They agreed to terrible terms for the artists, in exchange for making themselves the beneficiaries of the crooked deal.