I'm covering the growing business of tribute bandsthis week, as musicians who cover classic rock 'n' roll songs discover how to fill the void on iTunes for acts who don't allow digital downloads of their music.
Is it legal? Yes.
Attorney Dan Johnson specializes in copyright law and explains its various forms this way:
If you make and sell an audio only "sound alike" recording of a song that's been commercially exploited, the songwriter has to give you permission to do so, as long as you pay a pre-set royalty. "It's a compulsory license under the copyright act," Johnson says. So even though Bob Seger won't put his songs on iTunes, he can't deny that privilege to Sam Morrison—who does a Seger tribute band. And every time Morrison sells a song online, Seger, the song writer, gets paid a set royalty.