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Digital Performance Right in Sound Recordings Act of 1995 (DPRSRA), Pub. L. No. 104-39, 109 Stat. 336 (Nov. 1, 1995) (full-text), amending 17 U.S.C. §§114-15.
Until 1995, the sound recording copyright did not include any right in public performances of sound recordings. While the public performance of a sound recording would most likely require a license from the owner of the musical composition, no permission was required from the holder of the copyright in the sound recording itself. However, the emergence of new methods of digital music delivery caused sound recording copyright holders to fear that the ability to make perfect copies of music and the ease of distribution of those copies would damage revenues from record sales.
The law Edit
As a result, in 1995 the Digital Performance Right in Sound Recordings Act (DPRA) was enacted. The Act expanded the scope of copyright protection afforded to sound recordings by including a new right for public performances of sound recordings by digital audio transmission. Section 106(6) of the U.S. copyright law grants “the exclusive right to do and to authorize:
|“||(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.||”|
The new public performance right applied only to subscription and interactive services and specifically exempted broadcasting and related transmissions. Congress expressly refused to create a more general performance right:
|“|| . . . the Committee has sought to address the concerns of record producers and performers regarding the effects that new digital technology and distribution systems might have on their core business without upsetting the longstanding business and contractual relationships among record producers and performers, music composers and publishers and broadcasters that have served all of these industries well for decades. Accordingly, the Committee has chosen to create a carefully crafted and narrow performance right, applicable only to certain digital transmissions of sound recordings.
The motivating force behind Congress’ creation of the limited public performance right was the desire to protect record companies and recording artists from a reduction of record sales threatened by technological developments, specifically interactive and subscription services made possible by the emergence of digital audio services capable of delivering high-quality transmissions of sound recordings. Such transmissions would enable subscribers in their homes to obtain direct, time-certain transmissions of specific sound recordings. Interactive and subscription services are capable of providing a consumer with the ability to hear specific recordings on demand, thereby providing a potential substitute for record ownership. The Senate Report also notes that the underlying rationale for the creation of the limited right was the impact on record sales posed by subscription and interactive services "but not by broadcasting and related transmissions.” 
In order to protect against the displacement of record sales while simultaneously protecting the ‘longstanding business and contractual relationships among record producers and performers, music composers and publishers and broadcasters that have served all of these industries well for decades,’ the DPRA included a three-tiered system for categorizing digital transmissions based on their likelihood to affect record sales.
Those transmissions which posed the greatest risk to record sales, such as those engaged in by interactive services, became subject to discretionary licenses from individual rights holders. Entities wishing to transmit a recording through an interactive service were required to obtain a license from the individual rights holders on mutually agreed terms. The individual rights holder was authorized to refuse to license the transmission. Under the DPRA, those subscription services which make digital audio transmissions were entitled to the statutory license.
In a second category were transmissions which posed a lesser risk to record sales. Transmissions in this category, such as non-interactive, subscription digital transmissions, were subject to a statutory license. Under the statutory license, copyright owners were compelled to grant permission for a qualified transmission. In those cases in which copyright owners and transmitters were unable to agree upon a license rate, an interested party was permitted to apply to the Library of Congress for a determination of a reasonable rate for the intended performance. In such a situation, the Copyright Office was empowered to convene a Copyright Arbitration Royalty Panel (“CARP”) to arbitrate proper rates and terms.
Section 114’s final category exempted certain transmissions from the sound recording performance right. These transmissions were exempted because they were viewed as posing little threat to sound recording sales. Within this final category, Congress specifically exempted "nonsubscription broadcast transmissions.”
Section 114(d)(1) also exempted ‘nonsubscription transmission[s] other than  retransmission[s],’ as well as "initial nonsubscription transmission[s] made for direct reception by members of the public of a prior or simultaneous incidental transmission that is not made for direct reception by members of the public.”
In order to qualify for the statutory license, the transmitters were subject to technical requirements, including requirements that they: (1) not be ‘interactive;’ (2) not use a signal that causes the receiver to change from one program channel to another; (3) not pre-announce the broadcast of particular songs; (4) not violate the ‘sound recording performance complement’ and, (4) must, if feasible include various information about the recording being transmitted. See 17 U.S.C. §114(d)(2).