There are music performance licenses for venues, such as restaurants and bars. People will come up to you and threaten to sue if you don't pay for a blanket license. And they will do this even if you insist on playing completely original music.

Many of these license fees are done in bulk. The same with countries that automatically collect a tax on USB sticks and optical media. You pay a volume license, but it never filters down to the artists because it's not collected based on which songs are actually stored or played.

This is hardly all of it. There's a huge mass of corruption under the surface. Such as them not actually forwarding over license fees for song collections, or including songs they don't actually have the rights to include.

I'm not an expert but I believe the industry gets paid a chunk for "radio play" in general (and things like radio play) on a per station/location basis, and then that chunk gets divided up not on the basis of what was actually played, but on the basis of how popular it is. Not saying it works, but that type of scheme sort of works for the hits, and much less well for obscure music, but obscure music probably does not get played too much.

but anyway, something like that is how they'd get paid for music they don't own.

These arrangements were worked out back when "radio" was "disrupting" the live music and recorded music industries, and people were trying to "monetize" the "eardrums"