Writing a song is sometimes a pastime for many people and while most of the lyrics written are not of any great quality, there are some gems in there. For what it is worth everyone who writes songs for fun or is trying to get into the songwriting business should take a long hard look at what they are writing. It may just turn out to be a goldmine in the right hands.
No matter how personal the song is to you, the first step in making money from your songs is to realize that the song is a commodity. More importantly you should know that what you have written is intellectual property that belongs to you. There are two ways to make money from the lyrics of your song if it is picked up by an artist or a studio.
Mechanical Royalties – This is a payment method bound solely to the number of units (CDs/ Tapes) manufactured. The payment percentage is also regulated; in the U.S. it is set by a five member panel that is appointed by the President. Currently that figure amounts to $0.08 per song. So if 10,000 units are manufactured, the songwriter will receive $800 as payment. This amount is sometimes split with a publisher if such a person is involved in the deal.
Performance Royalties – This is where a songwriter gets paid for every time the song is played on TV or Radio. Payments are made through Performing Rights Organizations such as ASCAP, BMI, or SESAC and it is essential that the songwriter be a member of one of those groups to receive the royalties. However some research must be done in ascertaining which PRO is best suited for the songwriter.
While there are other methods which are contract and deal based, these two are the most popular and long lasting methods of payment for songwriters.