Soon after radio stations began to broadcast music during the 1920's, they ran into opposition from the American Society of Composers, Authors, and Publishers, which insisted that broadcasting stations pay for the privilege of playing copyrighted music. Because almost no one in broadcasting was then paid for services and there was no advertising revenue, payment for music would have visited a real hardship upon the stations. In an attempt to set up a music licensing agency of their own, the broadcasters formed the National Association of Broadcasters in 1923, which attempted over nearly two decades to find a method of counteracting ASCAP pressures.
Finally in 1939, after another failure to negotiate with ASCAP, NAB proposed that a music licensing organization be formed which would be supported by the broadcasting industry as a whole. Although the plan differed only slightly from previous efforts to establish an industry music pool, the 1939 proposal was drawn on a much larger scale. Under this proposal, an industry-owned corporation charged with providing a large supply of music, both in sheet form and transcription was to be created. It would acquire agreements with existing publishing houses, encourage independent composers to submit compositions, develop sources of public domain music, and establish a program of industry education. By February 1940, over a million and a half dollars worth of stock had been sold and pledges received, and with that backing Broadcast Music, Incorporated was declared operative. Soon after, an effective compromise with ASCAP was arranged, which resulted in two sources of music for broadcast purposes. Since then, BMI has become a corporate entity in itself, with no official relationship to the National Association of Broadcasters.
