Confusing fact: Spotify and similar services pay out 3 types of royalties. And because not artist knows this, many are missing out on the royalties they've earned.

Remember, there are 2 copyrights in every piece of recorded music: the composition (words and notes as you could write on paper) and the sound recording (a performance you could capture to tape or hard drive)

Money from the composition goes to the songwriter(s) and publisher(s). Money from the sound recording goes to the recording artist and the sound recording copyright owner (often a label, sometimes the artist herself).

Often, especially in this DIY era, a single person can wear multiple hats- a techno producer, singer-songwriter, or solo instrumentalist may be performer, composer, publisher and label all at the same time. But she's gotta think about all the different revenue streams.

Royalties for sound recordings are the most straightforward. The digital service pays the sound recording copyright owner (or the distributor) which in turn pays the artist according to their contractual deal.

Royalties for compositions are more complicated. There are two different royalties: mechanical royalties and composition performance royalties. Many songwriters/composers aren't collecting both!

To get performance royalties, you need to sign up with a performing rights organization, like ASCAP, BMI, or SESAC. These entities collect your money from services (and also radio stations, restaurants, clubs, etc) and send writers/publishers a check.

If you write material for yourself or others that is played on digital services and you don't have a PRO, you are leaving money on the table. You have earned that money!

Finally, mechanical royalties: these are collected by publishers or publishing admins that pay songwriters/composers. But what if you don't have a publisher or admin? You're a self administered composer, and it used to be hard to collect those royalties.

As a result of the Music Modernization Act, it's getting easier, but you have to make sure the MLC (new organization charged with collecting and distributing mechanical royalties) has the necessary info about you and your songs/compositions. Go to http://www.themlc.com 

And that's just how it works for interactive royalties. Non-interactive services (digital radio, Sirius XM) work differently! To earn sound recording royalties from those services, you have to sign up with @SoundExchange

Q: Is this complicated?
A: Yes.

Q: Does navigating all this stuff amount to a form of invisible uncompensated labor that musicians and songwriters are expected to perform as a condition of working in this business?
A: Yes.

Nonetheless, as we all work to make creator compensation more reasonable and transparent, one good place to start is by making sure we're collecting every cent of what we've rightfully earned. And we're always here to answer questions.

Visual learners may benefit from this puppet-based version of this thread, as broadcast on CSPAN2 last year: https://www.c-span.org/video/?c4811079/role-congress-music-licensing-copyrights