Snippets from an interesting piece in Wired UK on cover songs and copyright:
“Cover songs on YouTube [and elsewhere] are, almost universally, non-commercial in nature. They’re created by fans, mostly amateur musicians, with no negative impact on the market value of the original work. (If anything, it increases demand by acting as a free promotional vehicle for the track.)…
…Copyright law was intended to foster creativity by making it safe for creators to exclusively capitalise on their work for a limited period of time. Cover songs on YouTube don’t threaten that ability, and may actually prevent new works by chilling talent that could go on to do great things.”