It was first recorded as a demo at Pathway Studios, North London, and quickly acquired a following after it was put on rotation at Radio London. It did not take long for its popularity to reach record executives, and Dire Straits were offered a contract with Phonogram Records. The song was then re-recorded and released in both the United Kingdom and the United States, though the demo version remained on the original UK Vertigo single.The song was originally released in May 1978 but did not chart. Following re-issue in January 1979, the song entered the American music pop chart. Unusually, the success of this single release came more than six months after the relatively unheralded release of the band's debut album in October 1978. BBC Radio were unwilling to play the song due to its high lyrical content; after it became a U.S. hit, their line softened. The song reached the top 10 in both the UK and the U.S., reaching number 8 on the UK Singles Chart and number 4 on the Billboard Hot 100 and helped drive sales of the album, which also became a hit.