Earning from Cover Songs Legally
Navigate licensing requirements and royalty splits when performing or recording cover songs.
Performing or recording cover songs isn't illegal, but it does require licenses and involves royalty payments to the original songwriters. Understanding these requirements protects you legally and ensures songwriters get paid.
Mechanical Licenses for Recordings
If you record a cover song and distribute it digitally, you need a mechanical license. This is a compulsory license, meaning the original copyright holder must grant it to you. You pay approximately $0.091 per song per copy distributed (the statutory rate as of 2024).
Platforms like Distrokid, Tunecore, and CD Baby handle mechanical licenses automatically when you distribute. They take a small percentage and pay the Harry Fox Agency or MRI on your behalf. If you distribute independently, use Harry Fox Agency or MLC.com directly to obtain mechanical licenses.
Performance Licenses for Live Gigs
When you perform a cover song live in a venue, the venue must have a blanket license from a performing rights organization. In the US, that's ASCAP, BMI, or SESAC. These organizations collect royalties from venues and distribute them to songwriters.
As the performer, you typically don't pay directly. However, if you're organizing a show or renting a space (like hosting a concert in a private venue), you may need to ensure the proper license is in place. Most established venues already have these licenses.
Streaming Platforms
When your cover song is streamed on Spotify, Apple Music, or YouTube, mechanical and performance royalties are handled automatically by the platform. Spotify pays both mechanical royalties to the songwriter and performance royalties through performing rights organizations.
The catch: streaming royalties are minimal. A million streams might earn $4,000 to $5,000 total, split between all parties (you, the songwriter, your distributor). This is why covers alone rarely generate substantial income.
Cover Song Attribution and Credits
Always credit the original songwriter in your metadata. On streaming platforms, fill in the songwriter field accurately. This ensures royalties route correctly and respects the original artist.
YouTube Covers
YouTube has a special system. You can upload a cover without a license, but YouTube's Content ID system automatically detects it. YouTube then places ads on your video, and revenue is split between you and the copyright holder (typically 70/30 or similar).
You have no obligation to take down the video, but you won't earn money from it unless the copyright holder allows monetization. Some artists explicitly allow this to promote their work.
The Splits and Money Flow
Example: You record a cover and distribute it to Spotify.
- Spotify pays the aggregator (Distrokid, Tunecore) a combined mechanical and performance royalty.
- Your aggregator takes a cut (typically 20-30% for covers) and forwards mechanical royalties to Harry Fox or MLC.
- Harry Fox/MLC pays the original songwriter's publisher.
- Performance royalties go to the songwriter's performing rights organization (ASCAP, BMI, SESAC).
- The remainder reaches you.
In practice, a popular cover might earn $100 across all platforms. After aggregator cuts and royalty splits, you might see $30-50. This is why covers work best as marketing tools to attract fans to your original music.
Derivative Works and Modifications
If you significantly rearrange or modify a cover, you might need a derivative works license. This is less common but important if you drastically change the song. Always consult with rights organizations if you're unsure.
Building an Audience Through Covers
Many successful artists started by building audiences through covers. The strategy: use covers to grow a fanbase, then release original music to that audience. Your originals have no licensing complications and generate full revenue.
Covers are legitimate income for established musicians or situational (like a wedding band), but they're not typically a core income stream. Use them strategically as part of a broader music business that includes teaching, originals, and live performance.