I think one reason is that the big record companies rely on each other for discoverability. Consider two artists in a similar genre both signed to a different

I think one reason is that the big record companies rely on each other for discoverability. Consider two artists in a similar genre both signed to a different label. Label A couldn’t profit from people who would have discovered their artist A by listening to artist B signed to the competitor label B. Also they can just demand more from Spotify etc. by threatening to pull their catalog. This would hurt Spotify a lot because people like to listen to playlists that include all their favorite tracks and not just the ones that aren’t from Universal Music. A lot of people would probably cancel their membership the next day because the value of it just sunk a lot.