Cover songs are becoming big business. Bands like Pomplamoose record entire albums of cover songs, then sell the albums and tour based on the popularity of their arrangements and performances.
The copyright laws in the United States include something called a mechanical license for cover songs. That means that anyone can record and sell (or stream) a cover song by paying a fixed licensing fee. You don’t need to negotiate a price with the original artist; you don’t even need to track them down for permission before you record a cover.
The easiest way to obtain a license for your cover is to estimate the number of sales and streams and obtain the license from SongFile. The licensing fees are set by statute, and there is an additional processing charge per song – so it often pays to overestimate a bit, and avoid having to repay the processing fee.
Importantly, this licensing fee only permits you to sell or stream covers of the song. Including the original recording of the song in a video, such as a movie or advertisement, is a different fee and must be negotiated with the artist or record label.
This is an easy and relatively inexpensive process, and an easy way to protect yourself from a potentially expensive copyright infringement fight.