Summeoyo,
Thanks for your input! Regardless, I was hoping maybe Brian could ask his best contact at OurStage about their cover song policy. They've probably got something in place with the PROs simply because the underlying song (copyright owner) still needs to be paid a performance royalty regardless of who created or owns the cover recording. For example, the 1st place winner in May was "Maybe I'm Amazed (McCartney cover)".
http://www.ourstage.com/charts/music/100-covers

So one of the PROs must collect the performance royalty for this famous Paul McCartney song and the band that covered it can possibly also collect something later from SoundExchange as well, because they own the recording that is being performed on the OurStage venue.

Either way, I don't think the artists or bands need to pay anything unless they will sell the cover song(s) in form of downloads or physical CDs. In such case they will need to purchase a mechanical license for any cover songs they will be selling.

Michael

There's nothing remarkable about it. All one has to do is hit the right keys at the right time and the instrument plays itself. -- Johann Sebastian Bach

MichaelBorges.com
LicenseQuote.com