When you write a new song you automatically have an intangible, yet potentially valuable, right called “the right of first release.” It simply means you have the right to determine the when, where and who of the song’s first public release.
After that first public release that right is forever lost. From that point on it’s open season. Anyone who wants to record the song after the initial release can simply notify you of their intention and request that a mechanical license be issued. You do not have the right to refuse that request. If you fail to honor it, and they have proof they requested a license but were ignored, they can proceed without it, and if you pursue them, pay you at that point.
You have the option to grant a license for up to 10.000 copies with a small sum paid in advance to cover the first 2,000 copies downloaded or sold. The current statutory rate is 9.1 cents per copy so it totals $182.00. Get it, if it’s an independent release it may be your only payment from that version.
Yes, this means if you are a singer and want to record a cover of a hit song by a famous artist you may do so provided you obtain the mechanical license.
Giving up your right to first release can affect your options later. It may limit the number of outside artists who will be interested in your song. If you have a “big name” artist interested, but a less popular artist releases it just prior, the big name may lose interest. That situation isn’t common, just possible; many songs have a first release plus multiple covers by many different artists. Some songs have been recorded by hundreds of artists.
Also rare but possible, a music publisher may decide to pass on signing a song that doesn’t have the right of first release attached- b.e.