It actually depends on the bar and the clients that frequent it.

Some bar/club owners do prefer originals only. Some clubs/bars actually prefer cover bands becuase the clients tend to stay (and buy more drinks and food --this is where the money is for the owners, not cover charge etc) if they hear songs they know. Some patrons may not prefer to hear original music.

I have personally never heard of any kind of fees an owner has to pay to have a cover band play, except paying the band. I worked on 6th street in Austin in my youth and not once heard any owner mention additional fees etc. (but that was over 10 years ago) maybe things have changed.