Furthermore, Beethoven's PRO has sent an elite selection of bouncers to his grave, according to people familiar with the matter. "They're very concerned about 'Ode to Joy' and 'Fur Elise,'" sources said.
Hahaha, I know that's not how it works. In case you feel left out of this half-developed joke, let's start over.
When an artist writes and publishes a song today, he is owed money when the song is performed - such as on the radio, television, at a venue, etc. If he has a publisher for his song other than himself, the publisher is owed 50% and the songwriter is owed 50% for the use of the composition. Lots of songwriters self-publish and can therefore get 100%. Where does the money come from in the first place? The fees those venues pay for the right to broadcast. (So a songwriter wouldn't get performance royalties from, say, a house concert.) To collect what is owed, the songwriter should register with a performing rights organization (PRO). ASCAP and BMI are the best known PROs in the United States. You might have seen those initials in the copyright footnote of a lyric slide at church.
So this post's headline is a joke about composers who aren't around anymore to profit from their runaway hits. But, according to a music distributor, "There is no set rate for performance royalties – they vary quarter-by-quarter depending on variable factors, such as the total amount of license fees collected by the Performing Rights Organization." So even if Pachelbel did a Lazarus and overcame public domain law and showed he'd been registered with a PRO the whole time...no bankruptcy imminent.
Let me continue to guide you, however, into the labyrinth of how recording artists and songwriters get paid. Be warned, we might never emerge. (Please e-mail corrections if you spot errors.) I wanted to move backwards from the song - "When a song is downloaded on iTunes, X gets Y% and T might get V%." If such an analysis is possible, I don't have the time to make it.
[UPDATE: Songtrust has a very clear guide to a lot of this here - check it out.]
So let's put it this way. The songwriter and publisher should get revenue for the composition everywhere, whether streamed, downloaded, played on the radio, licensed to TV, sold on CD, or covered by somebody else. If a songwriter is his own publisher, boo-yah. Whoever owns the recording ("master rights") gets royalties whenever the recording is streamed, bought, or aired. For many big names, that's the record label. Indie artists generally own their own recordings, so they get to keep this share, too. What about the featured performing artist who didn't write or publish the song? He or she gets a cut of streaming license fees and download revenue. There's also a distinction made between interactive platforms (e.g., Spotify) and non-interactive platforms (e.g, regular Pandora).
To collect all these sources of revenue, artists, songwriters, publishers, and labels often use music distributors (such as CD Baby or Distrokid); PROs (ASCAP/BMI); and SoundExchange for Internet radio, depending on their role in the music making process and agreements with other parties. So if you write, perform, and record your own music by yourself, you're due a whopping percentage for your work. Then again, if you write, perform, and record your own music by yourself, it's possible no one knows about you.
Other sources of revenue include licensing to film, TV, and churches. The film-and-TV strategy is known as sync licensing. "The experts" say it can be very rewarding for even obscure artists, but it requires quality, research, and hustle. CCLI partners with songwriters, labels, and publishers to give churches a simpler and legal way to use songs in their worship services. This is why you might have seen a CCLI # on your church lyric slides. By the way, has your conscience ever troubled you about watching unofficial YouTube videos with other artists' songs? Actually, music distributors and YouTube (and Facebook, and Instagram, etc.) have a way of attaching a digital fingerprint to the song so that anywhere it is played on those platforms the rights holders get credit.
Of course, there are all sorts of other ways artists can profit from their music. They can sell CDs at creative prices and work out their own performance opportunities. Because the direct retail connection to their music has been lost, more and more artists are embracing a micro-patronage model in which fans are supporting them with voluntary payments for merchandise, shows, Kickstarter campaigns, or just because they love their work so much. See JJ Heller's breakdown of one of her songs here.
For further information:
All your music revenue sources (and how to collect the money) - CD Baby DIY Musician Blog
How to Get All Your Music Royalties - Ari's Take (may contain foul language)
The TRUTH About Music Licensing with Michael Elsner - Rick Barker podcast