Downes claimed the group's name derived as a pun on the rock band the Beatles, saying: "It was originally called the Bugs ... studio insects--imaginary creatures who lived in recording studios creating havoc. Then somebody said as a joke that the Bugs would never be as big as The Beatles. So we changed it to the Buggles." Horn later spoke of its name: "I know the name's awful, but at the time it was the era of the great punk thing. I'd got fed up of producing people who were generally idiots but called themselves all sorts of clever names like the Unwanted, the Unwashed, the Unheard ... when it came to choosing our name I thought I'd pick the most disgusting name possible. In retrospect I have frequently regretted calling myself Buggles, but in those days I never really thought much about packaging or selling myself, all that really concerned me was the record."  Horn began his career producing jingles and punk rock groups. Downes was a keyboardist in She's French and graduated from Leeds College of Music in 1975, after which he moved to London for keyboard work. The two first met in 1976 at auditions for Tina Charles' backing band and worked with her producer, Biddu, whose backing tracks had an influence on their early work as the Buggles. Horn met musician Bruce Woolley while playing the bass guitar in the house band at the Hammersmith Odeon. Both expressed an interest in Kraftwerk and Daniel Miller, leading them to read Crash by J.G. Ballard. Said Horn, ""We had this idea that at some future point there'd be a record label that didn't really have any artists--just a computer in the basement and some mad Vincent Price-like figure making the records ... One of the groups this computer would make would be the Buggles, which was obviously a corruption of the Beatles, who would just be this inconsequential bunch of people with a hit song that the computer had written ... and would never be seen."  In 1977, Horn, Downes and Woolley got together and began recording a selection of demos in a small room above a stonemason shop in Wimbledon, south west London, including "Video Killed the Radio Star", "Clean, Clean" and "On TV". Though unsure on what they wished to do with them, Downes remembered that "we knew even then ... there was some distant goal that had to be reached", and proceeded to re-record the songs at a 16-track recording studio in north London. Initial searches for the right record label to record and release an album failed, but Horn, having begun a relationship with Jill Sinclair, a co-founder of Sarm East Studios, managed to secure plans for a potential deal. However, the demo of "Video Killed the Radio Star" caught the attention of producer Chris Blackwell of Island Records and, on the day Horn and Downes were due to sign with Sarm East, Blackwell offered them a more lucrative deal, which they accepted. Downes claimed Island rejected them three times before a final deal was agreed upon.

Answer this question "what happened in 1977?" by extracting the answer from the text above.
In 1977, Horn, Downes and Woolley got together and began recording a selection of demos