Recording Cover Songs: CDs and MP3s
If you intend to record (CD, digital downloads, etc.) a cover song of a work that is already published and commercially available then you need to obtain a compulsory mechanical license (CML).
Things to know
- there is no such thing as a CML for videos - instead one needs a synchronization license;
- a CML allows one to adapt the work to some extent. Can't change the basic melody or the fundamental character of the music - that requires permission;
- you pay a CML fee for every sell or gift. see http://www.harryfox.com/public/StatutoryReports.jsp
You can legally play any cover song live at any venue and the copyright
owner of such song cannot stop you. But the copyright owner does have the right to be compensated.
The "Place" where you perform the live cover song has the obligation to pay the licensing fee. However, if the "Place" does not pay the fee, you both become liable for the fee. But law suits are expensive and Lawyers go for the deep pockets so the performer is usually safe from suit.
So yes, you can perform cover music, and charge a fee, and the venue where the music is performed has the obligation to pay any licensing fee due the copyright owner.