Losing My Virginity: How I Survived, Had Fun, and Made a Fortune Doing Business My Way

by Richard Branson

  For the first two weeks, sales of Tubular Bells were stillborn. Then I invited John Peel over to Alberta for lunch. We had known each other since I had interviewed him for Student. He had also started his own record label, Dandelion. He was the only person who played serious rock music on the radio, and his show was our only chance of winning air time for Tubular Bells. We all had lunch on Alberta and then settled down on the sofas. I put on Tubular Bells. He was amazed.

  ‘I’ve never heard anything like it,’ John finally said.

  Later that week we listened to John Peel’s laconic voice coming out of the radio. I was sitting on the deck of the houseboat with Mike Oldfield and everyone from Virgin.

  ‘Tonight I’m not going to play a whole lot of records. I’m just going to play you one by a young composer called Mike Oldfield. It’s his first record and it’s called Tubular Bells. I’ve never heard anything like it in my life. It’s released by Virgin, a brand-new record label, and it was recorded at Virgin’s own studios in Oxfordshire. You’ll never forget this.’

  With that, Tubular Bells started. I was lying on the sofa. Everyone was lounging around in deep armchairs or on the rug, and we passed round beer and wine, cigarettes and joints. I tried to relax. I could see everyone else lying there totally spellbound by the music. But I kept worrying. I find it impossible to stop my brain from churning through all the ideas and possibilities facing me at any given moment. I wondered how many people were listening to The John Peel Show; how many of those would go out and buy Tubular Bells the next day; whether they would wait until Saturday or would have forgotten about it by then. Would they come to the Virgin shops or order it from Smith’s? How fast would we receive the royalties? How many copies would we have to reprint? How should we break it in America? On one level I was absorbed in the music, but I felt like an outsider. I couldn’t lose myself in it like Simon or Nik, or my lovely new assistant Penni, who was a real beauty with long, black wavy hair and a generous smile. I was too aware that Virgin needed to sell a lot of copies to make money for next month’s tax repayment. I knew that Flying Teapot and The Faust Tapes were hardly going to knock The Rolling Stones or Bob Dylan off the charts. But Tubular Bells was extraordinary: something must happen from tonight’s broadcast. Virgin would never be able to afford to buy such a length of radio time to advertise it.

  Mike Oldfield sat in silence. He leant against Penni and stared straight at the radio. I wondered what was going through his head. I had wedged a sleeve of Tubular Bells – which showed a giant tubular bell suspended over the sea with a wave breaking in the foreground – above one of the picture frames. Mike stared at it as if he was staring out to sea. A greedy thought swam in the murky depths of my mind: perhaps he was already dreaming up another album?

  All the next day the phones rang with orders from record shops for Tubular Bells. As well as choosing to break all tradition by playing it in its entirety, John Peel reviewed Tubular Bells for the Listener:

  On the all too frequent occasions when I’m told that a record by a contemporary rock musician is a work of ‘lasting importance’ I tend to reach for my hat and head for the wide open spaces. Today these experts would probably tell you that in twenty years’ time collectors will still be enthusing over the records of such weighty bands as Yes and Emerson, Lake and Palmer. I’m ready to bet you a few shillings that Yes and ELP will have vanished from the memory of all but the most stubborn and that the Gary Glitters and Sweets of no lasting value will be regarded as representing the true sound of the 1970s.

  Having said that, I’m going to tell you about a new recording of such strength, energy and real beauty that to me it represents the first breakthrough into history that any musician regarded primarily as a rock musician has made. Mike Oldfield …

  John Peel had an enormous following, and what he said was picked up by thousands of people across the country.

  We arranged for both Gong and Faust to tour the country, but it was the grand Tubular Bells concert planned for 25 June which I hoped would bring the national press to witness the music celebrity of the moment. We made the Tubular Bells concert into an unmissable event. We managed to have Mick Taylor, then The Rolling Stones’ guitarist, Steve Hillage and Hatfield and the North all agree to play various instruments. Viv Stanshall from The Bonzo Dog Doo-Dah Band agreed to be on stage and announce the instruments as he did on the record.

  On the day of the concert Mike came round to see me on the houseboat.

  ‘Richard,’ he said quietly. ‘I can’t go through with this concert tonight.’

  ‘But it’s all arranged,’ I said.

  ‘I simply can’t go ahead,’ he repeated in a deathly whisper.

  I felt a wave of despair. I knew Mike could be as stubborn as me when he wanted to be. I tried to forget that the whole concert was arranged, the tickets sold and even television coverage agreed. I couldn’t use any of that as leverage since it would only strengthen Mike’s resolve. I had to be cunning.

  ‘Let’s go for a drive,’ I said innocuously, and led the way along the towpath and to my old Bentley parked outside. I knew that Mike had always admired this battleship-grey car with its faded red-leather seats. I hoped that a soothing drive past the Queen Elizabeth Hall would put Mike in a different frame of mind. We drove off with Mike sitting bolt upright. After a monosyllabic drive we reached the Queen Elizabeth Hall and I slowed down. There were Mike Oldfield posters everywhere. Already a crowd of people were making their way to the concert.

  ‘I can’t go on to the stage,’ Mike repeated.

  I couldn’t tell him that it was in his best interests, that this concert might catapult him into a different league and put him up alongside Pink Floyd. I stopped the car.

  ‘Do you want to drive?’

  ‘All right,’ Mike said cautiously.

  We drove on, over Westminster Bridge, past Victoria. I watched Hyde Park flash past the passenger window. Mike turned down Bayswater Road and drove near to the church where I had edited Student magazine.

  ‘Mike,’ I said. ‘Would you like to have this car? As a present?’

  ‘A present?’

  ‘Yes. I’ll get out here and walk home. You just keep on driving and the car’s yours.’

  ‘Come off it! It was your wedding present.’

  ‘All you have to do is then drive it round to the Queen Elizabeth Hall and go up on stage tonight. It’s yours.’

  A silence fell between us. I watched Mike as he held the steering wheel and imagined himself driving this car. I knew he was tempted. I hoped he would agree.

  ‘It’s a deal,’ Mike said.

  I would have to tell Kristen and then my parents what I had done with our Bentley, but I knew they wouldn’t mind too much. For all its charm and sentimental value, the Bentley was just a car. It was vital to get Mike up on stage and sell copies of Tubular Bells. If he was successful, I would be able to pick up any car I wanted. My mother would have approved.

  As the last bars of Tubular Bells died away at the Queen Elizabeth Hall, there was a momentary silence as people digested what they had just heard. They seemed mesmerised and nobody wanted to break the spell. Then they leapt to their feet in a standing ovation. I was sitting between Kristen and Simon and we stood up and cheered and applauded. Tears ran down my cheeks. Mike stood up in front of the organ, a tiny figure, and just bowed and said thank you. Even the band applauded him. He was a new star.

  That night we sold hundreds of copies of Tubular Bells. Mike was too shattered to speak to the press. Looking at all the people cheering and crowding round to buy his record, he said, ‘I feel as if I’ve been raped,’ and disappeared off in his new Bentley. Mike refused to go back on stage for many years afterward. Kristen and I walked home. From that night onward, Mike Oldfield’s Tubular Bells was set to become the most celebrated album of the year. Virgin Music was on the map, and the money started rolling in.

  Word of mouth spread and on 14 July Tubular Bells entered the album charts at number twenty
-three. By August it was number one. For the next fifteen years, whenever Mike Oldfield released an album it reached the top ten. Tubular Bells eventually sold over thirteen million copies, making it the eleventh-bestselling album ever released in Britain. The sacrifice of my Bentley was worth it. I never got round to buying another one.

  Although overnight Virgin was an established record label, we were a tiny company with a staff of seven and no ability to distribute records to all the record shops across the country. We had two options open to us. The first was to license our records to another, larger, record label. This would work only for fairly successful bands. The other company would give us an upfront payment for the right to promote the record, distribute it and keep the bulk of the profits. If the record recouped its advance, the record company would pay us a royalty, typically around 16 per cent. This was the traditional arrangement for a fledgling record company like Virgin.

  The second option was more risky. Virgin would forego the upfront payment and the royalties, and simply pay another record label to manufacture and distribute the records as and when they were ordered by shops around the country. Virgin would be responsible for all the promotion of its records, and carry all the risk if the record failed. Correspondingly, we would have all the upside if the record sold well.

  Most small record labels licensed their records since it was easy money: they received 16 per cent royalties from the other company and paid out whatever they had agreed to the artist, say 5 or 10 per cent. But Simon and I decided that we would go for a manufacture and distribution deal (called ‘Pressing and Distribution’ or ‘P&D’). It was a bold move but even then I knew that it is only by being bold that you get anywhere. If you are a risk-taker, then the art is to protect the downside. It seemed to us that Tubular Bells was so good that we could promote it ourselves. I felt sure that it would sell enough copies to pay back our investment. With the idea of asking for a P&D deal rather than a straight licensing agreement, we went to see Island Records.

  I had first come across Island Records when I was editing Student magazine. It had been set up by Chris Blackwell, who was brought up in Jamaica and had almost single-handedly introduced reggae into Britain. Island released Bob Marley, who became the first reggae superstar, and among others they also produced Cat Stevens and Free.

  Predictably, at first Island refused to do a P&D deal. They already licensed Chrysalis and Charisma (which had Genesis), and they wanted Virgin too. So they offered us a highly attractive licensing deal with royalties of 18 per cent. We were paying Mike 5 per cent, which meant that if we accepted Island’s offer we could collect 13 per cent of the sales of Tubular Bells for ourselves. At £2.19 this was 28.5 pence a record, which would mean a total profit to us of around £171,000 if Tubular Bells did astoundingly well and sold, say, 600,000 copies – that is to say reached double platinum. A record goes gold at 200,000 copies and platinum at 300,000 copies. If it reached a million copies, then Virgin would make £285,000 without having to pay for any of the costs of promoting and marketing the record. To a seasoned eye Island were far better placed than Virgin to promote this record to all the shops across the country. Most small record companies in our place would have accepted it, and certainly both Island and our lawyers urged us to do so.

  But Simon and I felt differently. We had fourteen Virgin shops across the country which could promote Tubular Bells. The experience of selling 100,000 copies of Student across the country had given me confidence that we could get this record out in quantity. Of course, our job was made much easier because Tubular Bells was so good that people wanted to buy it as soon as they heard it.

  To an outsider this looked like an enormous gamble. If sales of Tubular Bells had faded, Virgin Music would have been dead in the water. But, if we managed to sell 600,000 copies, worth about £1.3 million, Virgin would receive around £920,000 after the shops’ retail margin. Of this, we would pay £65,700 to Mike Oldfield as the artist, and £197,100 to Island Records for pressing and distributing the record, leaving us with around £658,000 to divide between promoting the record and keeping as profit to reinvest in other artists. This was the upside.

  The intellectual copyright of Tubular Bells was our birthright, and we were determined to build on it. So we turned down Island’s offer and insisted that we stick to a P&D deal. They would press and distribute the record and we would pay them between 10 and 15 per cent for this. They still held out for a licensing deal until we threatened to go to a rival record company, CBS. So we signed a P&D deal and sacrificed an immediate cash payment which would have been welcomed by Coutts, since the Manor was still in debt. We committed ourselves to selling Tubular Bells with our own resources.

  Island unwittingly fostered a cuckoo which grew up in their nest: Virgin Music. We became rich beyond our dreams as the sales of Tubular Bells shot through silver, gold, platinum, double platinum and then up over a million copies. We grew into a major force in the record industry and eventually became the rival to Island Records. Although the royalty rates we paid Mike Oldfield and Island changed over time, as did the price of the record, Tubular Bells went on to sell millions of copies and still sells around the world today. Our gamble that we could promote it ourselves made us our first fortune.

  8 ‘To be second choice means nothing.’

  1974–1976

  WHEN MIKE OLDFIELD DROVE away in my old Bentley after the concert at the Queen Elizabeth Hall, he was already spinning out of orbit. During all the months in which he had been incarcerated at the Manor with Tom Newman, working in complete privacy and achieving his perfect album, he had been dreaming about everyone buying Tubular Bells. But, when he stood up at the Queen Elizabeth Hall and saw the audience giving him a standing ovation, something inside him gave way. He found that, although this adulation was something he had yearned for, now that he had it he couldn’t cope with it.

  The music industry can make people rich beyond their dreams in a matter of months. Whether he liked it or not, Mike was now caught in that spiral which would make him one of Britain’s wealthiest men. The success was devastating to him, and I had to learn to live with that responsibility. I found it impossible to answer the question as to whether I should have pushed him into doing that concert. Mike went to live in a remote part of Wales with a girlfriend, and refused to talk to anyone else except me.

  When I first drove down to visit him, I could hardly find the house. It was a tiny stone cottage built on a range of hills called Hergest Ridge. The house had its back to the prevailing winds but it was so remote it was like Wuthering Heights. The whole of the front room was taken up with a grand piano. He took me up on to Hergest Ridge with a six-foot balsawood glider he had made. I watched him as he ran carefully down the hill and then gently launched the huge plane. It hardly seemed to move at first, and appeared suspended above Mike’s head, but then the wind caught it and it banked, soaring up and flying away from us down the ridge towards the fields below. Mike watched it, the wind blowing his hair back from his eyes, and for the first time I saw him smile.

  I drove back to London and left Mike living on Hergest Ridge. In a sad reversal of my having Kristen’s clothes brought round to Alberta so that she would have to move in with me, Mike went to the local pub one night and asked a friend to pack up his girlfriend’s clothes and take her to the station. For the next ten years, Mike Oldfield lived as a recluse and did no promotion for any of his albums. Fortunately, we had made a film of Mike playing Tubular Bells. We made it into a documentary and intercut it with pictures of abstract William Pye sculptures. The BBC showed it three times. Each time this film was broadcast, the sales of Tubular Bells and Mike’s other records soared. Had Mike spent the next ten years touring, like Pink Floyd, I am sure that he would have become one of the biggest rock stars in the world and John Peel’s prediction would have come true. As it was, Tubular Bells became more famous than Mike Oldfield, and, although he recorded many other beautiful albums, such as Ommadawn, my own favourite, none of them matc
hed the success of Tubular Bells.

  The other record companies were mystified by Mike’s reticence to perform. Ahmet Ertegun, who had eventually, after much negotiation, licensed Tubular Bells in America, couldn’t understand it:

  ‘You’re telling me that you have a film of sculptures for the promo?’ he snarled at me. ‘I don’t get it. I’m not sure anyone over here will get it either. We can all visit the Met if we want to.’

  As usual, Ahmet managed to come up with a solution: he sold Tubular Bells as the soundtrack for the film The Exorcist. As the film became a hit in America, so did the album. It finally reached the top of the American charts a year after it had done so in Britain.

  Simon and I developed three key aims when negotiating with bands. We never formally articulated them to each other, but our negotiations over Mike Oldfield taught us these general principles.

  First, we set out to own copyright for as long as possible. We tried our hardest never to agree a deal where the copyright reverted to the artist, because the only assets a record company has are its copyrights. We also tried to incorporate as much as possible of an artist’s back catalogue into our contract, although often this was tied up with other record labels. Beneath all the glamour of dealing with the rock stars, the only value lay in the intellectual copyright in their songs. We would thus offer high initial sums, but try to tie the artist in for eight albums. Over the life of Virgin Music, we prided ourselves that we had never lost a band. We never lost a band because we always renegotiated their contracts after a few albums, although, ironically, Mike Oldfield was one case where I was too slow to renegotiate and I almost lost him. The vital thing with a new band was, if you built them up, it would often be their third or fourth album that would be the most valuable. One good example of this was The Human League, who had made two albums on Virgin, each of which sold progressively better, but who then broke into the big time with their third album, Dare, which sold over 2 million copies. The last thing we wanted was to lose them after a couple of albums only to see them become successful with another record label. After we signed the artist up, we would soon try to extend the contract and, although we might give away 2 or 3 percentage points in royalties, it was a small concession in comparison with the potential of adding another two albums on to the end of the contract.