> Spotify could break even by increasing their prices/fees by 25% or by reducing their overhead by the same amount.
It's not obvious this is the case. If the record companies see Spotify increasing their revenue, they may just demand higher fees.
That's the crux of the problem here. Spotify need the record companies, but the record companies don't need Spotify. For now the record companies are squeezing Spotify for all their revenue, but it's no trouble to them if Spotify goes out of business. It's a tiny revenue stream for most of these companies.