How do I earn money from songwriting?

I understand there is some question about how publishing money is earned and split along the way.  I'll do my best to explain below.

At the foundation, as you know every song has 2 rights associated with it - a right for composition (those who wrote the song and/or the publisher) and a right for the master/recording of the song.

To determine how a song earns money you need to first consider how the song is used.  Depending on how it's used there will be different entities collecting money and the amount paid for type of use varies as well.  

The most common uses are listed below:

Public Performance of the song - When played on the radio, when streamed on Digital Service Providers (DSPs), when performed by a band live.  

Collected by: PROs like ASCAP, BMI, or SESAC.  The radio station, the DSP, the venues/festivals all pay an annual license fee to the PROs to be able to have music playing publicly.  

How payments are determined and made: This is a black box calculation.  It depends on the entity paying the PROs but they usually make a payment based on revenue.  Then the PROs do some kind of auditing throughout the year to determine how often songs are played and then based on that they make payments to the writers/publishers.  

Sale of a song or pressing an album - When an album is pressed or a track is sold digitally, a mechanical royalty is due on that track.  

Collected by: In the case of a song release on a major label, the label would typically pay the writers directly.  In the case of a self-release mechanicals may not get paid at all internally.  In the case of a song covered by someone else, the payments may get made to Harry Fox and then your publisher would collect them from Harry Fox.

How Payments are determined and made: Mechanical payments are $0.91/song and this can be negotiated a bit with a label but this is the gov't set statutory rate.  

Interactive Streaming on DSP - When a track is played on a DSP like spotify, two composition payments are made.  One for public performance and one for a small mechanical.

Collected by: the public performance payment is collected by the PROs.  The mechanical payment is made directly by the DSP and collected by your publishing admin or Harry Fox (which then is passed on to the publishing admin)

How Payments are determined and made: In the case of the public performance royalty, it's the black box calculation again as it goes to the PROs.  In the case of the mechanical paid, my understanding is that it's around $0.0008 per song.

Sync licenses - Half of every sync license is for the composition side.

Collected by - Usually these are paid directly to the artist or to the sync agent

How payments are made and determined - Once the money comes in, the payments made follow the splits of the song as it's registered.

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