The independent 2 Tone Records label was founded by Jerry Dammers of The Specials in 1979. Dedicated to dance-floor music performed by racially mixed bands, the label released The Special's own Gangsters in 1979.
Signing an innovative distribution deal with Chrysalis Records, 2 Tone enjoyed further hits in 1979 with The Prince by Madness and On My Radio by The Selecter. Madness then moved on to Stiff to take care of their own affairs.
The Selecter left 2 Tone in March 1980, claiming the business side was in chaos and the bootleggers had exploited their fans with pirated merchandise bearing the black and white 2 Tone graphics. They split 12 months later.
2 Tone branched out into film-making in 1981 with Dance Craze (1981), combining live footage of 2 Tone bands with politically-charged news commentary of the day.
In summer '81, on a return flight from another demoralising American tour, Messrs. Hall, Golding and Staple announced they were leaving to form Fun Boy Three and The Specials were instantly dissolved.