Parsons asked Woolfson to become his manager and Woolfson managed Parsons' career as a producer and engineer through a string of successes including Pilot, Steve Harley, Cockney Rebel, John Miles, Al Stewart, Ambrosia and The Hollies. Parsons commented at the time that he felt frustrated in having to accommodate the views of some of the artists, which he felt interfered with his production. Woolfson came up with the idea of making an album based on developments in the film business, where directors such as Alfred Hitchcock and Stanley Kubrick were the focal point of the film's promotion, rather than individual film stars. If the film business was becoming a director's medium, Woolfson felt the music business might well become a producer's medium.
Recalling his earlier Edgar Allan Poe material, Woolfson saw a way to combine his and Parsons' respective talents. Parsons would produce and engineer songs written by the two, and the Alan Parsons Project was born. Their first album, Tales of Mystery and Imagination, including major contributions by all members of Pilot, was a success. The song "The Raven" features lead vocals by actor Leonard Whiting, and, according to the 2007 remastered album liner notes, was the first rock song ever to utilize a digital vocoder, with Alan Parsons speaking lyrics through it. The claim seems spurious, however, as Kraftwerk's "Autobahn" predates "Raven" by two years, although it can be argued that that particular case escapes the qualifier of "rock music".
Arista Records subsequently signed The Alan Parsons Project for further albums. Through the late 1970s and early 1980s, the group's popularity continued to grow (although they were always more popular in North America and Continental Europe than in their home country, never achieving a UK Top 40 single or Top 20 album), with singles such as "I Wouldn't Want to Be Like You", "Games People Play," "Time" (Woolfson's first lead vocal), and "Eye in the Sky", making a notable impact on the pop charts. After the #3 success of the latter in the US (and #6 in Canada), however, the group began to fade from view. There were fewer hit singles, and declining album sales. 1987's Gaudi would be the Project's last release, though they did not know it at the time, and planned to record an album called Freudiana next.
Although the studio version of Freudiana was produced by Alan Parsons (and featured the regular Project backing musicians, making it an 'unofficial' Project album), it was primarily Eric Woolfson's idea to turn it into a musical. This eventually led to a rift between the two artists. While Alan Parsons pursued his own solo career and took many members of the Project on the road for the first time in a successful worldwide tour, Eric Woolfson went on to produce musical plays influenced by the Project's music. Freudiana, Gaudi and Gambler were three musicals that included some Project songs like "Eye in the Sky", "Time", "Inside Looking Out," and "Limelight." The live music from Gambler was only distributed at the performance site (in Moenchengladbach, Germany).
In 1981 , Parsons/Woolfson and their record company Arista were stalled in contract renegotiations when on March 5th the two submitted an all-instrumental atonal album tentatively titled "The Sicilian Defence" (the name of an aggressive opening move in chess), arguably to get out of their contract. Arista's refusal to release said album had two known effects: the negotiations led to a renewed contract and the album has remained unreleased to this day.
"The Sicilian Defense was our attempt at quickly fulfilling our contractual obligation after I Robot, Pyramid and Eve had been delivered. The album was rejected by Arista, not surprisingly, and we then renegotiated our deal for the future and the next album, "The Turn Of A Friendly Card." The Sicilian Defense album was never released and never will be, if I have anything to do with it. I have not heard it since it was finished. I hope the tapes no longer exist." Alan Parsons
However, in recent interviews, Woolfson announced he is considering releasing one track from the never-released "Sicilian" album as a bonus track on a future Parsons Project CD re-issue.
Parsons released titles under his name (Try Anything Once, On Air, The Time Machine, and A Valid Path), while Woolfson made concept albums named Freudiana (about Sigmund Freud's work on psychology) and Poe - More Tales of Mystery and Imagination (continuing from the Alan Parsons Project's first album about Edgar Allan Poe's literature).
Tales of Mystery and Imagination was first remixed in 1987 for release on CD and included narration by Orson Welles which had been recorded in 1975 but arrived too late to be included on the original album. On the 2007 Deluxe Edition release, it is revealed that parts of this tape were used for the 1976 Griffith Park Planetarium launch of the original album, the 1987 remix, and various radio spots, all of which are included as bonus material.
Grand Funk Railroad paved the way for Jefferson airplane, which cleared the way for Jefferson starship. The stage was now set for the Alan Parsons project, which I believe was some sort of hovercraft. -- Homer Simpson
The group was notable for using several vocal performers instead of having a single lead vocalist. Lead vocal duties were shared by guest vocalists chosen by their vocal style to complement each song. Woolfson sang lead on many of the group's hits (including "Time" and "Eye In The Sky") and the record company pressured Parsons to use him more, but Parsons preferred "real" singers, which Woolfson admitted he was not. In addition to Woolfson, Chris Rainbow, Lenny Zakatek, John Miles, David Paton and The Zombies' Colin Blunstone made regular appearances. Other singers, such as Arthur Brown, Procol Harum's Gary Brooker, Dave Terry aka Elmer Gantry, Vitamin Z's Geoff Barradale and Marmalade's Dean Ford, have recorded only once or twice with the Project. Parsons himself only sang lead on one song ("The Raven") through a vocoder, and can be heard singing backup on a few others, including "To One in Paradise". Both of those songs appeared on Tales of Mystery and Imagination.
Although the vocalists varied, a small number of musicians worked with the Alan Parsons Project regularly. These core musicians contribute to the recognizable style of a Project song in spite of the varied singer lineup. Together with Parsons and Woolfson, the Project originally consisted of the group Pilot, with Ian Bairnson (guitar), David Paton (bass) and Stuart Tosh (drums). Pilot's keyboardist Billy Lyall also contributed. From "Pyramid" on, Tosh was replaced by Stuart Elliott of Cockney Rebel. Bairnson played on all albums and Paton stayed almost until the end. Andrew Powell appeared as arranger of orchestra (and often choirs) on all albums except "Vulture Culture", when he was busy composing the score of Richard Donner's film Ladyhawke. This score was partly in the Project style, recorded by most of the Project regulars, and produced and engineered by Alan Parsons. Powell also composed some material for the first two Project albums. From "Vulture Culture" onwards, Richard Cottle played as a regular member on synthesizers and saxophone.
The Project never played live during its career. This was due to the fact that Woolfson and Parsons saw themselves mainly in the roles of writing and production, and also because of the technical difficulties of reproducing on stage the complex instrumentation used in the studio. In the 1990s things changed with the technology of digital samplers. The only live performance where the band was introduced as "The Alan Parsons Project" was at Night of the proms 1990 (at the time of the group breakup), featuring all Project regulars except Woolfson who was present but behind the scenes, while Parsons stayed at the mixer except during the last song where he played acoustic guitar. Since 1994 Alan Parsons performed live acoustic guitar, keyboards and vocals, with various lineups called "Alan Parsons Live Project" distinctly from "The Alan Parsons Project" due to the breakup with Eric Woolfson.
Behind the revolving lineup and the regular sidemen, the true core of the Project was the duo of Parsons and Woolfson. Eric Woolfson was a lawyer by profession, but was a composer and pianist as well. Alan Parsons was a successful producer and accomplished engineer. Both worked together to craft noteworthy songs with impeccable fidelity, and almost all songs on Project albums are credited to "Woolfson/Parsons."