Virgin Records 1972-1983
With limited growth in the mail order business, Virgin is now concentrating on opening more record shops, with one in every major city around England, and attracting big artists to record at The Manor – including Paul McCartney.
The next logical business step? A record label. If Virgin can offer somewhere to record and somewhere to promote and sell records - surely they should be able to publish their records? Everything a rock star needs.
Richard’s buyer for Virgin Records, Simon Draper, has been the key to the success of the shop. His discerning antennae had established Virgin Records as the shop buy music. He has picked out the hippest bands that don’t sell in the mainstream shops. So it is with Simon that Richard sets up Virgin Music in 1972. Their first signing? Mike Oldfield. Spotting Mike as a session musician for a singer recording at the Manor, Richard and Simon send Mike to live there so he can record when the studio is free.
Richard rents Mike the complete set of instruments he needs – from guitar to glockenspiel, and mandolin to mellotron – as well as a set of tubular bells for £20.
May 25 1973. Amid the likes of David Bowie, Suzi Quatro, Stevie Wonder, The Jackson 5, Lou Reed, Roxy Music and Pink Floyd, Virgin releases its first four albums: 'Flying Teapot' by Gong, 'The Faust Tapes' by Faust, 'Manor Live' sessions featuring Elkie Brookes, and Mike Oldfield’s 'Tubular Bells'.
At first, no radio station takes any notice of a 45 minute piece of music without any words but, after Richard has personally played it to him, influential Radio 1 DJ John Peel broadcasts Tubular Bells on his late-night Top Gear show. Now the phones start ringing with orders.
Bucking the industry trend by not doing a licensing deal with a larger label, Richard & Simon take a gamble and instead retain the copyright and do all of the marketing, promotion and selling themselves. The gamble pays off, sales of 'Tubular Bells' shoot to over a million copies and the team makes a lot of money. Richard then secures a $1 million dollar deal with a massive royalty to sell the record in the States. Richard is 23 years old and Tubular Bells is the most celebrated album of 1973.
‘Virgin began to sign up new bands on the back of Mike Oldfield’s success. The bulk of these would inevitably fail. We still paid ourselves tiny wages; we still all lived in each other’s pocket and we reinvested all the money we earned in new artists and building up the company.’ Richard Branson, Losing My Virginity
But over the next couple of years, Virgin fails to sign more big sellers and runs out of cash. Assets are sold, staff laid off and artists dropped.
Richard is determined to sign bands at the forefront of the new music revolution: Punk. Everyone knows The Sex Pistols and the furore they are causing in the British press, and they have just been dropped by their second scandal-wary record company. It is the eve of the Silver Jubilee and Richard knows the band want to release 'God Save The Queen'. Virgin is the only record label who will sign them. Over 100,000 copies sold in one week and Virgin is back in business.
November 1977 and Virgin releases 'Never Mind The Bollocks, Here’s The Sex Pistols' – proudly on display in the windows its record shops. One Virgin shop manager is arrested under the Indecent Advertisements Act, but the case is dismissed in court.
Virgin has become the smart choice for punk and new wave acts to sign to and the record label picks up The Motors, XTC, The Skids, Magazine, Penetration and The Human League, as well as a host of reggae acts Richard signs on a trip to Jamaica.
Run by a skeleton staff in a small mews house in Vernon Yard, London, Richard’s ambition sees them successfully launch in to the French market with Julien Clerc and Telephone. However, Virgin is still struggling.
Margaret Thatcher is now prime minister and the UK economy is in recession. An attempt to launch Virgin in America fails and the company looses £900,000.
But soon the home-grown roster of Japan, Ian Gillen, XTC, China Crisis, Heaven 17 and Simple Minds all become bestsellers. Phil Collins debut 'Face Value' and The Human League’s 'Dare' turn’s Virgin’s fortunes around. Then in comes Boy George and Culture Club.
‘The BBC refused to interview Boy George, calling him a transvestite. Then we heard about a cancellation on Top Of The Pops. We did everything we could to get Boy George into that slot and when Top Of The Pops finally agreed we suspected we had a sensation in the making. The next day the telephones rang off the desks and the orders for the single came pouring in. 'Do You Really Want To Hurt Me?' Reached number one and when George announced that he preferred a cup of tea to sex he became an international icon.’ Richard Branson, Losing My Virginity
Virgin makes a £2 million profit.
Virgin makes an £11 million profit. 40% of profits come from Culture Club.
Richard spends the next few years launching Virgin in to the travel industry with Virgin Atlantic and Virgin Holidays.