PROs:
Songwriters and publishers depend on the royalty money received from performing rights organizations (PROs) for their most significant source of long and short term income. In the USA, presenters, TV, and radio have to buy blanket licenses from the three PROs (ASCAP, BMI, and SESAC). They then split the money between the songwriters and the publishers. The three PROs are concerned with music on TV, radio, and live performance where either admission is charged or the artist is paid. The fees to presenters are usually based on seating capacity. The fee is the same if you use 1000 ASCAP songs or just one. The payments to songwriters and publishers, however, are based entirely on TV performances and computer samples of mostly commercial radio airplay during drive time. The PROs believe that this is an accurate model of what is performed live, which is nonsense. The USA is the only country with more than one PRO and the only country where performers may not submit their set lists to the PROs so that live performance is factored into the sample. For a music festival such as Merlefest on the campus of Wilkes Community College, the presenters purchase from the PROs a blanket license fee based on the size of the venue for the live performances of songs. These live performances are conveniently not counted when it comes time for the PROs to make their payments to the songwriters and publishers.
CDs:
The above is a visual breakdown of how the money is divided from a $17 retail CD purchase. It's easy to see that the artist, songwriter, and producer receive very little of the overall "pie." It can also take around two years for an artist to actually receive any of the royalty money from an album. Here is a link to a royalty calculator that is preloaded with some typical values. The calculator shows how truly difficult it can be just for an artist to break even on a record deal.
