Why does this happen in my template for Django?
Try removing the space between the rec.artist_name and the |. So you should have this: 
{{ rec.artist_name|safe }}
That'll fix the autoescaping, but I think the other commentors are correct in saying that you're storing the %20 into the db. So you'll probably have to fix it on that end of things.
simple%20minds is displayed when do this:
{{ rec.artist_name }}
How do I remove the %20...and make it spaces?
When I put | safe as a fitler, the error is:
Could not parse the remainder: ' | safe' from 'active.artist_name | safe'
Thanks.