Similar to how it works with physical reproductions (i.e. CD or vinyl manufacturing), a mechanical royalty is owed to the songwriter and publisher for all downloads of the song you are covering. This includes free and promotional downloads.
Securing a mechanical license through CD Baby grants you the right to sell digital downloads of a cover song through our distribution service within the United States. Important: in many territories outside the United States, this royalty is paid by the download store to a collection society that distributes mechanical royalties to publishers and songwriters. However, in the United States, the owner of the sound recording (which is most likely YOU or your label) is responsible for paying the mechanical royalty for any and all cover song sales.
Instead of having to pre-pay for reproductions that may or may not sell, CD Baby will withhold the required royalty from your sale and redirect those royalties on your behalf to the original rights owner — one less thing for you to worry about so you can focus on making new music.
Please note that this only covers digital download sales via store.cdbaby.com and partner platforms (such as iTunes, Amazon, etc.) delivered by CD Baby on your behalf. If you are selling direct to fans through another platform or selling physical formats, you will need to acquire another license and pay those royalties to the agency you secured the license through.
Need some step by step help? Check out this article.