How the Mechanical Licensing Collective Affects Your Cover Song Royalties

The Mechanical Licensing Collective (MLC) is the US organization that collects and pays out mechanical royalties for streaming and download activity, but it does not issue the mechanical license that lets you release a cover song in the first place. Those are two separate systems that happen to use the same word, and confusing them is one of the more common misunderstandings among artists releasing covers in 2026. Understanding where each one starts and stops explains why your cover royalties get paid the way they do.

What is the Mechanical Licensing Collective, exactly?

The MLC is a nonprofit created by the Music Modernization Act of 2018 to administer blanket mechanical licenses for digital streaming and download services operating in the United States. Services like Spotify, Apple Music, and Amazon Music pay the MLC, and the MLC matches that money to the correct songwriters and publishers based on musical work ownership data, then pays them out. It was built to solve a specific, longstanding problem: streaming services were accumulating huge sums of unmatched mechanical royalties because nobody had a centralized, reliable way to identify who wrote which song.

The MLC represents the songwriter and publisher side of the equation — the composition. It has nothing to do with the sound recording (the master), and it has nothing to do with granting permission to record a new version of someone else’s song. That permission is a separate legal step that happens before distribution, not after streaming activity generates royalties.

Where does your cover song’s mechanical license actually come from?

Your mechanical license comes from a compulsory licensing mechanism under US copyright law (or a direct license from the publisher), obtained at the moment you choose to record and release a cover — not from the MLC. In the US, Section 115 of the Copyright Act gives any artist the right to record a cover of a previously released song without asking permission, as long as they pay the statutory mechanical royalty rate to the rights holder. Distributors like Globex Music streamline this by securing that license on your behalf as part of the release process, which is why automatic mechanical licensing is bundled into every cover song release rather than sold as a separate add-on.

Once that license is in place and your cover is live, the MLC’s job begins: it tracks the streaming mechanical royalties generated by your recording and routes the songwriter’s share to the correct publisher or self-published songwriter. Your distributor handles the recording (master) royalties directly with the platforms. These are two parallel royalty streams, not one combined payment, and that split is exactly why a single cover stream generates two different types of payouts to two different parties.

Does the MLC pay artists who record covers?

Generally, no — the MLC pays songwriters and publishers, not the performing artist who recorded the cover, unless that artist also happens to be the songwriter of the underlying composition. If you cover a song you didn’t write, the composition royalty the MLC processes goes to the original songwriter’s publishing administrator, not to you. What you earn as the covering artist comes from your master recording royalties, paid through your distributor from the streaming platforms’ per-stream payouts on your specific recording. This is a frequent point of confusion: artists sometimes expect a payout from the MLC directly, but unless you wrote the song, that specific pipeline was never meant to reach you.

Why this distinction matters for your release strategy

Because the MLC only governs US mechanicals for musical works, its scope is narrower than many artists assume, and it has zero bearing on getting your cover live on 200+ platforms globally. The practical bottleneck for cover artists has never been the MLC — it’s securing the mechanical license before release and getting through moderation quickly so the recording royalties (the part you actually collect) start accumulating. That’s the part a distributor controls directly, and it’s where cost and speed differ enormously between services.

What this costs in practice: a real comparison

Licensing structures aside, the fee you pay to distribute a cover varies sharply by provider, and that variance compounds over time. Globex Music charges $1 per release with automatic mechanical licensing included and no annual fee. DistroKid charges $44.99 per year regardless of how many covers you release. TuneCore charges a $24.99 base fee plus separate per-cover licensing fees, and takes a 20% commission specifically on social platform revenue. CD Baby charges $9.95 per single up front and then takes a 9% royalty commission forever, on every stream, for the life of the recording.

Run the math over three years for an artist releasing four cover singles a year — 12 releases total. At $1 per release with no annual fee, that’s $12 total. DistroKid’s annual fee alone runs $134.97 over three years before any per-release consideration. CD Baby’s up-front cost for 12 singles is $119.40, and that’s before the 9% commission has taken anything from three years of accumulated streams — a cost that never stops accruing, unlike a flat annual or per-release fee.

How fast do covers actually start earning once licensed?

Moderation speed determines how quickly your composition starts registering with the MLC and generating recording royalties in your distributor dashboard. Slow review times delay both sides of the royalty pipeline: the longer a cover sits in moderation, the longer before streaming activity begins and the later the MLC has anything to match against your song. Fast-moderation distributors that bundle mechanical licensing into the submission step — rather than requiring you to source it separately — cut that delay meaningfully, since license verification is usually the step that stalls a cover release the longest.

What this means for payout thresholds

Because MLC-administered songwriter royalties and your recording royalties are separate streams, your ability to withdraw earnings depends on your distributor’s payout threshold for master royalties, not on anything the MLC controls. Globex Music sets that threshold at $10, which is reachable quickly for an active cover catalog spread across 200+ platforms, since even modest per-stream rates accumulate faster across a wide platform footprint than on one or two major services alone.

The bottom line: the MLC keeps the songwriting side of the industry’s royalty math honest at a national level, but it doesn’t touch the license you need before releasing, the fee you pay to distribute, or the speed at which your cover reaches streaming platforms. Those three variables remain entirely a function of which distributor you choose.