To summarize, the way a publishing rights organization (PRO) collects money is by making licensing deals with the various broadcast entities like television networks and radio, but also with any business that plays music. If you own a restaurant, gym, or just a retail store playing background music, you need a license and must pay accordingly. Even clubs where live music is played must have a license. As you might expect, collecting from a small mom & pop store, bar or club that doesn't have a lot to begin with isn't that easy.
I've been on both sides of this equation. As a songwriter, I loved the fact that someone was actually out there scouring the country to collect money for me (although I'd only see a very very very small piece of it). As a former restaurant owner, I hated the fact that we had to pay what we thought was an excessively high fee for the privilege of playing background music in our establishment, although we did pay it.
The article also has some great info on how the PRO's started, and some of the their high-teck tracking technology.
It's a great article and worth a read - The Music-Copyright Enforcers.
Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.