Royalties are licensing fees collected by an outside company, which are then redistributed to the license holding artists and songwriters.  In the United States, The American Society of Composers, Authors and Publishers (ASCAP) is one of the primary performance-rights organizations and is responsible for distributing $817 million in royalties to artists in 2008 alone.

On this day, February 13th, in 1914, ASCAP was founded in New York City by composer Victor Herbert.  Songwriters in New York’s Tin Pan Alley were some of the country’s most prominent composers in the early 20th century and it was through their status that Herbert realized the necessity of protecting copyrighted compositions.  ASCAP’s earliest members included Irving Berlin, Otto Harbach, and James Weldon Johnson.

The emergence of radio in the 1920s drastically increased ASCAP’s revenue. After a brief period of only airing live performances, the radio format started to shift towards using prerecorded performances.  The evolution of radio allowed ASCAP to collect licensing fees at dramatically increased rates. ASCAP continued its success in the 1930s by gaining members at the forefront of the jazz, blues and swing era, such as Louis Armstrong.