Cover Song Royalties: Who Actually Gets Paid

A cover song is your own new recording of a song somebody else wrote, released without rewriting the song itself. Cover song royalties split one way, every time: you own the recording and keep the master royalties it earns, and every publishing dollar the release generates, mechanical and performance alike, belongs to the writers of the original.

Someone in a comment section will tell you that a cover is free money, and someone else will tell you that you need permission from the writer. Both are wrong, and the division they are blurring is not negotiable and not a matter of who works harder. It follows from the fact that a released track is two separate copyrights stacked on top of each other, and a cover only ever gives you one of them.

The two copyrights, and which one you just made

Every song on a streaming service carries a composition and a sound recording. The composition is the melody and the lyrics. The sound recording is one fixed performance of it. Our explainer on the P line and the C line walks through the two ownership marks that sit on a release for exactly this reason.

When you record a cover you create a new sound recording. You paid for the session, so you own that master, and the streaming income attached to it flows to you through your distributor like any other release.

You did not create a new composition. The composition already existed, and it stays exactly where it was. So the mechanical royalty generated by every stream, and the performance royalty generated every time your version plays on radio or in a venue, route to the original writer and their publisher. This is why publisher and writer shares matter here: on a cover, both of those shares are somebody else's.

The compulsory license, and the sentence inside it that costs you

United States law is generous to cover artists in one specific way. Section 115 of the Copyright Act creates a compulsory license: once recordings of a nondramatic musical work have been distributed to the public in the United States with the copyright owner's authority, you can record and distribute your own version without asking anyone. The writer cannot refuse you. That is genuinely unusual, and it is why cover culture exists at the scale it does.

The same section then takes something back. Section 115(a)(2) reads:

A compulsory license includes the privilege of making a musical arrangement of the work to the extent necessary to conform it to the style or manner of interpretation of the performance involved, but the arrangement shall not change the basic melody or fundamental character of the work, and shall not be subject to protection as a derivative work under this title, except with the express consent of the copyright owner.

Read the last clause twice, because it is the part that decides your income. Your arrangement is not protected as a new work. You can move a song from stadium rock to bedroom folk, rewrite the chords, halve the tempo, and none of it makes you a writer of anything. Absent written consent from the copyright owner, an arrangement earns a zero percent writer share.

We say this to songwriters more often than any other single thing about covers, and it is worth being blunt: the belief that a distinctive arrangement earns a slice of the publishing is the most expensive myth in independent music. It costs people years of registrations that were never going to pay, and it occasionally costs them a relationship with a publisher they annoyed.

Do you actually need a license to put a cover on Spotify?

Here the law and your distributor give different answers, and you have to satisfy both.

The law first. The Music Modernization Act created a blanket mechanical license for interactive streaming services. The Copyright Office states plainly that it no longer accepts song-by-song notices of intention for digital phonorecord deliveries, whether a permanent download, a limited download or an interactive stream, and that those deliveries are now licensed on a blanket basis through The MLC. Song-by-song notices survive only for non-digital uses such as CDs and vinyl.

The practical consequence: Spotify is the licensee, not you. Spotify reports your cover's usage to The MLC and pays the mechanical, and The MLC passes it to the original writer's publisher. Nobody sends you a bill.

Your distributor is a different story. DistroKid requires that you buy a cover license through its own service every time you upload a cover, secured through the Harry Fox Agency, even if you already bought one somewhere else. It charges one dollar a month per cover song, billed as twelve dollars a year, and it warns that securing the license can take up to fourteen business days. Plan your release date around that window rather than discovering it the week of. The charge is per upload rather than per song: put the same cover on a single and then on an album and that is two licenses, because the deduction is tied to the upload rather than to the composition.

DistroKid also warns that its cover licenses apply only to releases it distributes, and that a release containing a cover will not be available for sale in India, Pakistan, Mexico or Canada, though it does stream in those countries. If a chunk of your audience is in one of those four markets, that is worth knowing before release day rather than after.

Whether the fee is fair given the blanket license already sitting underneath the stream is a reasonable argument to have. What is not up for argument is that your release does not go live until you pay it, so budget for it.

Playing covers live: who pays, and who gets paid

A cover band in a US bar does not buy a license, and this is the single most common misunderstanding about live covers. The venue holds it.

ASCAP answers the question directly in its general licensing FAQ: "Some people mistakenly assume that musicians and entertainers must obtain licenses to perform copyrighted music, or that businesses where music is performed can shift their responsibility to musicians or entertainers. The law says all who participate in, or are responsible for, performances of music are legally responsible. Since it is the business owner who obtains the ultimate benefit from the performance, it is the business owner who obtains the license."

Read both halves of that. The law reaches everyone who participates in the performance, so a band playing an unlicensed room is not automatically outside the problem. In practice the license sits with the business, because the business is the one profiting from the music, and in a licensed room ASCAP's own phrasing is that local artists can cover its songs in their sets without worrying about infringement. That is what a venue's annual blanket fee buys: a night of covers nobody has to clear song by song.

The money flows the other way from what most performers assume. ASCAP distributes live performance royalties out of the fees the venues paid, and it says it pays the ASCAP writers of every song performed on the top tours it surveys, cover songs included. The performance royalty your set generates belongs to the writers of the songs you played, not to you for playing them. You earn the door and the guarantee.

With one real caveat about how little of that reaches anybody from a small room: a performance only pays once it has been reported. ASCAP surveys the top tours, and for everything smaller it relies on members submitting their own set lists through its OnStage program. A Tuesday night of covers in a licensed bar that nobody reports pays the original writers nothing in practice, even though the venue paid its fee.

Which cuts in your favor for your own songs. If your set includes originals, the performance royalty on those is yours, and claiming it means telling your performing rights organization what you played rather than waiting for it to notice.

The 2026 rate, and a number worth checking on your own statement

For physical copies and permanent downloads, the rate is set by law rather than by negotiation. The Copyright Royalty Judges publish a cost of living adjustment each year, and the 2026 final rule sets it at 13.1 cents per work, or 2.52 cents per minute of playing time, whichever amount is larger, for every physical phonorecord and permanent download. That is up from 12.7 cents in 2025.

Where the rate goes next is unusually settled for this business. The current period ends in 2027, and a 2027 figure is due before that year begins, because the rules oblige the Judges to publish each adjustment at least 25 days ahead of January 1. For the five years after that, the Judges published a proposed settlement in July 2026 covering 2028 through 2032, reached between the publisher and songwriter participants, meaning the NMPA, NSAI and the Music Artists Coalition, and the major record companies with A2IM. Its terms are that the physical and download rates carry forward exactly as they are, annual inflation adjustment included, with nothing else amended. Comments closed on August 10, 2026 and the Judges had not adopted it as of October 2026. Four of the copyright owner participants, the Songwriters Guild of America among them, declined to sign. If it stands, the penny rate owed on a cover pressing in 2031 is this year's 13.1 cents plus whatever the CPI has done in the meantime, and nothing more.

One detail worth knowing if you release covers through DistroKid: its help pages still describe the deduction as 12.7 cents per song sold in the US. That was the 2025 figure, it is now a full year behind, and it sits on both the cover upload article and the one explaining why the license has to be bought there. It only touches download and physical sales rather than streams, so the gap is small in dollars. It is still worth checking your own statements against the current figure rather than assuming, and the direction of the error is not in your favor.

Streaming works differently. There is no per-copy rate for an interactive stream; the mechanical comes out of a percentage-of-revenue formula, which our piece on what a mechanical royalty is breaks down. The destination is the same either way. The original writer gets it.

The mistake we see most often

Do not register your cover at The MLC or your performing rights organization as a work you wrote.

It is an easy mistake to make, because the registration form does not know the difference and will accept whatever you type. What happens next is not income. You have claimed a share of a composition owned by somebody else, so your entry lands as a conflicting claim against the real publisher. Conflicts freeze money rather than release it, and they hold up the original writer's payments alongside your own registrations. Our guide to registering a song covers what does belong in a filing.

This leads somewhere awkward for a company that sells publishing administration, so we will say it directly: a cover is the one release type where a publishing administrator earns you nothing. There is no publisher share for us to collect, because you do not hold one. Anyone who tells you they will collect the publishing on your covers is either confused about the difference between the master and the song, or counting on you being confused. We tell songwriters this before they sign. Our pricing is commission-only, so if there is nothing to collect, there is nothing to charge.

Covers still earn. They earn on the master, and for a lot of independent artists that is a real and sensible income stream. Just do not build a registration strategy on top of a share you do not have.

Covers this route does not reach

The compulsory license is narrower than most people assume. It applies to an audio-only recording of a song already distributed to the public in the US with the owner's authority. Outside that, you need a direct negotiated license, which the writer is free to refuse:

• Tracks that sample the original recording. Playing a song yourself is a cover. Lifting the master is a sample, and it needs clearance from the recording owner as well as the publisher.
• Remixes. A remix works from someone else's recording, so it needs their permission.
• Translated lyrics. A translation is a derivative work, and the compulsory license does not extend to it.
• Medleys and mashups. Both alter the fundamental character of the works involved.
• Songs never commercially released. The license only opens once the owner has put recordings of the song out to the public. A leaked demo does not count, and neither does a song you heard live.
• Anything set to picture. Video is a synchronization right, which Section 115 does not grant at all. Your audio cover being cleared on Spotify tells you nothing about the same performance on YouTube, where Content ID claims the composition for the original writers.

Public domain songs sit outside this entirely. No license is required, and no mechanical is owed, because there is no longer a copyright owner to pay.

Before you release

1. Confirm the original was commercially released in the US. If you cannot find it on a store or service, the compulsory license may not be open to you.
2. Confirm your version qualifies. No samples, no translated lyrics, no fundamental rewrite of the melody.
3. Buy the license your distributor requires, and start early enough to absorb a two-week turnaround.
4. Mark the release as a cover in your distributor's metadata, and credit the original writers accurately. Getting the writer names right helps the money reach them, which is the entire point of the system.
5. Leave the composition registrations alone. File your own songs at The MLC and your PRO; leave the covers off both.
6. Watch the master side instead. That is where your money is, and it behaves like any other release.

A cover is a promotional and revenue decision about a recording, not a publishing one. Treated that way it is a perfectly good move. Treated as a shortcut into somebody else's publishing, it is a slow way to accumulate registrations that pay nothing and irritate people. If you are trying to work out where your publishing income actually is, the unclaimed royalties piece is the better place to start, because it deals with songs you genuinely wrote.