In 1889 Sidney Story, a local politician, wanted to rid New Orleans of the bars and bordellos that existed to "service" the navy boys who were stationed in New Orleans. Thus he proposed that a district of the French Quarter be created where the bars and bordellos would be limited too. Much to his bemusement, this district became known as storyville.
Storyville became the center of nightlife in New Orleans, with your average john from all over New Orleans would come down to have a good time. Competition was fierce among the bars to cliental, thus they began to lure customers in with whatever means necessary. The most popular way was live music, and in 1900 New Orleans there were plenty of poor musicians who needed the money.
Thus the full time jazz musician was born in New Orleans. By paying the musicians to play, the musicians were allowed to cultivate there skills, not only through hours of playing a day, but the musicians would also gather after hours to listen to one another play, learning tricks and techniques from one another.
Soon the all the major players from the New Orleans marching bands were playing for the bars and bordellos. Buddy Bolden, Kid Ory, The Dods Brothers, and of course, Joe "King" Oliver, and Louis Armstrong. There are stories of Joe Oliver stepping outside the bar where he was playing and blowing his cornet so loud that it could be heard throughout Storyville, and people would pour out of the other bars and come to see the king play, for he was the best in New Orleans at the time.
A new sound started to emerge, New Orleans Dixieland Jazz. It was based on the principle of collective improvisation, with influence from the New Orleans marching bands. Unfortunately recording equipment at the time was a new technology and the poor musicians could not afford it so most of this sound has been forever lost, but a few recordings where made. A good example of this style is Joe "King" Oliver and the Creole Jazz Band - Dippermouth Blues.
Unfortunately Storyville could not last, do to political pressures for high up, and a few unfortunate incidents with some rowdy sailors, Storyvillle was closed in 1917. The entire scene fell apart, without bars to support them many performers where forced to find another source of income. They began to move north, to Chicago and started a new jazz revolution, Chicago Dixieland, but that my friends is another story.
thanks to templeton for the location of storyville