> If they can make the average song listened to by a user just 1 second longer, they reduce that by about 0.5%.

This isn't how music royalties work - rather, Spotify (and most other on demand streaming services) pay out a % of their net revenue to rights holders. This % does not change based on how many streams there are in total, but it IS distributed proportionally based on the number of streams, so it's more profitable for a music rightsholder to have more streams (the topic of the article).

Some high level information: https://support.spotify.com/us/artists/article/royalties/