...mostly from radio airplay and so forth, as well as digital performance royalties (which increase markedly if you own the underlying copyright, though there is provision for even the backup singers on the record to get a piece of that action). Those streams are why guys like Liberty DeVitto sue Billy Joel... if you write a song that manages to become a core song for a nostalgia-based radio format you can probably count on at least $30k a year for a couple of decades without having to lift a finger.

The limiting factor for this is, of course, the continued existence and health of said radio format. Given that advertisers have not historically been willing to spend much to court the 55-plus demo and that musical taste tends to get fairly fixed between the ages of 12 and 15 and that interest in active discovery of new artists, etc. peaks around 18 to 20, the nostalgia portion of a station's playlist is thus roughly governed by looking at the end-points of the station's target demographic. Oldies radio, for instance targets 40-54. The bulk of the playlist will thus be newer than 42 years old (because the 54 year-olds were 12 42 years ago) and older than 22 years old (because the 40 year-olds were 18 22 years ago).

When you look at it this way, you see why Oldies radio is in "crisis". The core of the playlist now covers 1965-1985, roughly, and probably the best output of the period is the older stuff which doesn't gel well with the good stuff from the later period. I've maintained for a while that CBS flipped most of their Oldies stations to Jack because Jack skews a little younger (the format is basicaly '70s & '80s hits with stuff from other decades that works within that; a song from 1970 to 1992 or thereabouts only needs to have charted to justify itself in that format) and solves the problem of going from the Beatles to Bon Jovi by abandoning any claim to format consistency. Where the Oldies stations have returned, they've essentially gone to the 1965-1985 playbook; anything pre-British Invasion has been tossed out.

Classic Rock will be dealing with this question next. Hendrix, the Stones, the Who, the Doors, Zeppelin, etc. will probably be spared from the purge, but less well-known classic rock from pre-1975 will be gradually deemphasized over the next few years. The question is whether the format's programmers can find a way to integrate grunge into the mix without pissing off the legacy listeners or whether they'll stick their head in the sand and ride the dinosaurs into the sunset. In that event, we'll probably see a '90s-based classic rock format sweep the country in the coming years... using the 12/18 rule the oldest listeners for that format are now about 35 and the youngest are on the cusp of 18. The question is whether mainstream/active/alternative will contort itself into that format before the classic rock formats do.

However, returning to the original point, those streams earn revenue at a statutory rate, so you're not giving them up by going independent.