The premise of your post is flawed. No one said “I’m going to use Spotify because they underpay artists!” Pandora and other services predated it but Spotify had the biggest catalog and was on-demand. The only streaming alternative at the time was piracy. So labels chose low income over no income
Regardless of how they paid artists, Spotify's consumer appeal was always in the convenience of it. It was more convenient to just stream music whenever you wanted to rather than being spoonfed a soundtrack at a time.
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