Yep, sounds like that's exactly it.

“Virtually every new dollar of revenue went directly to music companies as royalty payments, evidencing the fact that the more members Spotify adds, the more money the company loses. In almost a one-for-one scenario, every dollar Spotify is generating immediately exits the company due to licensing fees.”

This predatory relationship has to stop if the record companies want to exist at all in the future. I don't think they realize that they're pointing the gun at their own foot.