An original song is a great example of copyrighted material. A cover song is a new performance of an original song or recording, like what we see on popular TV shows “Glee” and “American Idol.”
So, if your band wants to cover another artist's song, what do you have to do? The answer depends on whether you want to simply play the song live, or record it.
Performing a live cover version of another artist's song
According to SESAC, one of the three big Performing Rights Organizations (PRO) in the US, “Anyone who plays copyrighted music in a public establishment is required to obtain advanced permission from the copyright owner or their representative.” A PRO, sometimes referred to as Performing Rights Society (PRS), is a licensing agent for songwriters and their music publishing companies, and it coordinates royalties for the appropriate parties. (Amazingly, “SESAC” is not an acronym—the name doesn't stand for anything.)
However, the responsibility for procuring this license usually falls on the venue or organization hosting the band. Owners of performance venues purchase license agreements from one or all of the big PROs. In addition to SESAC, the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI) also coordinate performance licensing for such venues.
So, if you perform cover songs at weddings or nightclubs, the venue would need to have the appropriate licensing agreement or face legal exposure. (The same obviously goes for venues hosting tribute bands—bands that cover many songs by the same bands.)
Each of the three PROs covers certain artists, so the entity depends on the songs being performed. Many locations get performance rights from more than one PRO, as different licensing agents cover artists whose work might be performed.
The rates a venue can expect to pay for performance rights can vary: costs depend on the type of venue, type of performance, frequency of performances, entrance fees, and other factors. Certain venues are exempt from royalty requirements altogether: churches and other worship places often qualify for an exemption, as can non-profit educational venues (so long as the songs are part of an in-person teaching activity). Anyone considering whether a performance will be exempt should check with the appropriate PRO in advance.
Recording cover songs
A different situation is presented if your band, instead of simply wanting to cover a song live, decides it wants to record a cover version of another artist's song. If you're interested in a license for recording or selling a copyrighted song, you'll need what's called a mechanical license—a license that allows one artist to create a new version of another's copyrighted song.
A mechanical license is so named because the original song author does not have to give his or her permission for you to get one—it's “mechanical.” The Harry Fox Agency is the largest in the music business for such licenses, coordinating the royalties between the various constituents (music publishers, performers, etc.). Note that while you are guaranteed a mechanical license for the asking (and paying), the one thing that the original artist can block is another artist releasing the first recording of that song—under certain circumstances, that artist can even block his or her own record company from doing so!
It's a thrill to perform a song you've long held dear to your heart. But if that song is copyrighted and you're performing it at a venue that makes money, make sure they have the right licensing agreement squared away before you get on stage. And if you want to record that homage to your favorite power ballad, remember that it's you who is on the hook for the licensing fees.
For more information:
The American Society of Composers, Authors, and Publishers (ASCAP)
Broadcast Music, Inc.
The Harry Fox Agency
Find out more about Intellectual Property Basics