Where your money comes from - the Performing Right
If you write songs or compose music, then every time your music is performed you can earn money.
In the music business, one of the sources of income is the exploitation of the performing right in original music and any associated lyrics. (In this context, 'exploitation' is a good word).
When you write a song or compose some music, then you are automatically and without having to do anything awarded copyright in that composition, whether or not it is recorded.
Copyright consists of a collection of rights of various kinds, one of which is the performing right.
The performing right allows you to authorize performances of your song, whether live, recorded or broadcast. You could do this for free, but you are more likely to want to ask for money in return.
For any individual writer, it would be very complex to administer the performing right on their entire catalog of compositions, therefore it is normal for a writer to assign the performing right in all of their compositions to a collection society. In the USA this would be ASCAP, BMI or SESAC. In Canada this is SOCAN, in the UK it is the Performing Right Society (PRS).
Once you have signed up with a collection society, they will collect royalties payable for the exploitation of your performing rights.
The types of performance that attract royalties are many and varied. Television is an excellent source, as is radio. Live performances at 'significant venues' also contribute. But the list goes on to include movie theaters, clubs and bars, and all the way down to dentists' waiting rooms, hairdressers and even buses and coaches that are fitted with entertainment systems (inclusion varies according to country).
Plainly, although it is possible to track performances by major broadcasters and in significant live venues, it is not feasible to account for every play on the tiniest radio stations, nor every song that is played in a hairdresser's salon.
So major music users are tracked 100% and you will be paid for every play. Small radio stations are 'sampled' meaning that their output is tracked on typically one day per month, and payments based on that information. Money collected from untrackable sources is divided according to statistics compiled from other sources.
The amazing thing about this is that it works incredibly well. Other copyright industries - photography for instance - would love to have something similar in place. And you get paid for foreign performances too - collection societies all around the world share their data.
All you have to do is write the songs, get them out there, then sit back and wait for the money to roll in!