How Cover Songs on Apple Music Generate Revenue: A Clear Breakdown

Streaming platforms like Apple Music host millions of songs, including numerous cover versions of popular tracks. While listeners often enjoy these renditions, the business model behind how cover songs generate revenue remains a common point of confusion. A recent episode of Side Hustle School—Ep. 3556—addresses this question directly, offering a grounded explanation of how cover songs function within the music industry’s financial ecosystem.

What Happened in the Episode

The episode begins with a listener’s question: Can someone profit from releasing cover songs on Apple Music? The host, Chris Guillebeau, responds with a clear, fact-based analysis. He emphasizes that while cover songs are legally permissible, they do not generate direct income for the cover artist in the same way as original compositions. Instead, revenue flows through a complex system of licensing, royalties, and rights management.

Key Facts and How It Works

Apple Music, like other major platforms, operates under a licensing framework that requires all music to be cleared through a music rights organization. For any song—original or cover—there are two primary types of rights:

Master Rights: These belong to the original recording. The rights holder (often the original artist or their label) controls the master recording and receives royalties from streaming platforms.
Publication Rights: These cover the song’s composition. The songwriter or publisher holds these rights and earns royalties from any performance or use of the song, including covers.

When a cover is released, the cover artist must obtain a license from the original master rights holder to legally use the recording. This license is typically granted through a music publisher or a rights management organization such as ASCAP, BMI, or SESAC. Without such a license, the cover is considered unauthorized and may lead to legal action.

Once licensed, the cover song appears on Apple Music, and streaming revenue is distributed according to standard royalty agreements. However, the cover artist does not receive a share of the master royalties. Instead, they may earn a small portion of the performance royalties—only if they are credited as a performer and if the composition rights are properly assigned to them.

Background: The Legal and Financial Framework

The music industry has long recognized the value of covers. Historically, artists have used covers to build audiences or pay homage to classics. However, the financial structure has remained unchanged: original creators retain the lion’s share of revenue.

For example, if a cover of a Beatles song is streamed on Apple Music, the original Beatles master rights are held by the Beatles’ estate or their record label. The cover artist must pay a licensing fee to use that master. The streaming platform then pays royalties to the rights organization, which distributes funds to the original songwriter and publisher. The cover artist receives no direct share of the master royalties, only a potential performance royalty if they are listed in the song’s metadata.

Apple Music does not offer a separate revenue stream for cover songs. The platform operates under a unified royalty model where all songs—original or cover—are treated similarly in terms of distribution. This means that cover artists do not benefit financially from the popularity of the original track.

The Apollo Media Center, 1348 Jefferson Avenue, Buffalo, New York, April 2022. An eye-catching landmark in the Cold Spring neighborhood of the city's East Side with its gleaming white tile façade and LED marquee, the Apollo opened its doors in April 1941 on the site of an earlier theater, the Liberty. In this first incarnation, the facility was operated by the local Basil Brothers chain in partnership with the upstart theater magnate Nikitas Dipson, and along with a projection room and executive offices, it comprised a 900-seat auditorium with seats upholstered in velour and elaborate interior murals depicting events in Greek history. It was quite a sumptuous environment in which to enjoy the latest big-budget Hollywood opuses from Metro-Goldwyn-Mayer Pictures, such as Gone with the Wind, Thirty Seconds Over Tokyo, and The Philadelphia Story (the theater's inaugural feature). The theater was located at the epicenter of what was fast becoming the main business district of Buffalo's African-American community, and after a fire of undetermined cause swept through the building in October 1966, it was therefore most likely the discriminatory policy of redlining that lay behind Basil's decision to close the theater rather than making the $30,000 in needed repairs. After a three-year renovation accomplished mostly by volunteer labor from community members, the Apollo reopened three years later as Buffalo's first Black-owned and operated theater, and for the next decade-plus under the ownership of the Ethiopian Orthodox Fellowship and later of young impresario Ray Moss (the latter of whom famously redecorated the interior in an Afrocentric theme, complete with zebra-skin tapestries and African-style paintings) it hosted live dramatic productions and screened Black-oriented movies until its closure some time in the 1980s. The Apollo's third act began in 1995, when a task force including Masten District councilman David A. Collins, architect Bob Coles, local media personality Sandy White, and community organizations such as the Langston Hughes Center and the African American Cultural Center teamed up to renovate the building into a public access television production facility. Today, the Apollo Media Center produces a broad range of community-sourced religious, public affairs, and entertainment programming viewable on Digital Channel 1302 of the local Spectrum cable service. by Andre Carrotflower, CC BY-SA 4.0, via Wikimedia Commons. · Source · License

Why This Matters for Creators and Listeners

Understanding how cover songs are monetized is essential for independent artists and content creators. It highlights a key principle in creative economics: performance and ownership are not always aligned.

For aspiring musicians, this means that releasing a cover without proper licensing can result in legal exposure. It also underscores the importance of understanding music rights before launching any creative project. For listeners, it clarifies that streaming platforms do not reward reinterpretation with financial returns—only original creators and their rights holders benefit directly.

Moreover, this dynamic raises broader questions about creative equity. If covers are not financially rewarded, does that diminish the cultural value of reinterpretation? While the episode does not explore this, it sets the stage for deeper conversations about how the music industry values different forms of artistic expression.

Limitations and Open Questions

The episode provides a clear but limited picture. It does not address:

How rare it is for cover artists to receive any financial benefit through performance royalties.
Whether there are any exceptions—such as fan-made covers or non-commercial uses—where revenue sharing might occur.
How emerging platforms or independent distributors might change this model in the future.

Additionally, the episode does not discuss the role of artificial intelligence in generating cover songs or the ethical implications of AI-created versions of copyrighted music. These are growing areas of concern in digital content creation.

What to Watch Next

Listeners interested in this topic may want to explore related content on the amsterdam bike tour case study, which illustrates how a side project can evolve into a profitable business. Similarly, the ROAS attribution article offers insight into how ownership and credit matter in creative industries.

For those exploring music creation, the AI content assessment provides a relevant context about how technology is reshaping creative work—though it focuses on writing, the principles of attribution and ownership remain transferable.

As music platforms continue to evolve, the question of how covers are monetized will remain a critical issue. While current systems do not reward cover artists directly, future developments in licensing, blockchain, or decentralized music platforms might change that landscape.

Sources & further reading

Featured image: Jesse B. Foerster in his Frankfurt (Germany) studio in 1992, early in his career as a producer and DJ. The analog recording equipment and tape machines reflect the era’s club music production setup. by Erica Foerster, CC BY-SA 4.0, via Wikimedia Commons. Image source · License