Memphis bank teller Jim Stewart started the Satellite record label in 1958 after years of attempts at making it as a country fiddler. He made recordings of local singers in a two-car garage using an inexpensive reel-to-reel tape machine. His sister, Estelle Axton (also a bank employee), became his partner, putting several thousand dollars into the enterprise to buy the proper recording equipment and set up shop in a legitimate location that turned out to be in Brunswick, Tennessee, about 20 miles northeast of Memphis, an odd rural setting for a record company with such a celestial name. After a year or so with no success, their investment money dwindling, they moved back to the city, leased the abandoned (but basically intact) Capitol movie theater on East McLemore Avenue, and kicked things up a notch. Rufus Thomas, a WDIA radio personality (and recording artist who'd hit big in 1953 with "Bear Cat" on another Memphis-based label, Sun) and his daughter, aspiring teenage singer Carla, began recording for the label, signaling an abrupt switch for Satellite from a C&W label run by country folk to one that dabbles in a bigger city type of rhythm and blues. Here, then, was an environment where white and black artists worked together, turning out rough-edged but promising R&B music (which wasn't a first, as Sam Phillips had fostered the same kind of atmosphere at Sun a decade earlier and had become quite successful in doing so).
Young Carla Thomas scored the company's first hit late in the year, "Gee Whiz (Look at His Eyes)," first a Satellite single, then a major hit nationally on Atlantic. Stewart's operation was strictly regional, necessitating a distribution deal with Atlantic, but that kind of small-mindedness would soon change. They converted part of the front lobby area of the modestly remodeled theater into the Satellite Record Shop, which Estelle ran on a daily basis; the auditorium section, with all the seats removed, served as the recording studio, its large, sloped floor providing a big acoustic sound that was quite unique. The record store helped generate cash for running the label and came in handy as a place to sell their product to customers locally. The shop inadvertently served another purpose: many of the people that came in off the street were musicians, songwriters and the like, making it a hangout for some of the label's future recording stars.
The financial situation got a little better when the Thomas record hit, though Atlantic was pulling in the lion's share of the profits. The next time around, Jim and Estelle opted to take more control of the situation. "Last Night," a driving instrumental jam by The Mar-Keys, was the record that did the trick. Guitarist Steve Cropper and bassist Donald "Duck" Dunn, both just 19 at the time, lived on the same block in Memphis as kids. During the late '50s they played around town in a group they called The Royal Spades (the name inspired by faves The Five Royales) with guitarist Charlie Freeman and others at various school events, church functions and parties. Freeman dropped out and in 1959 the duo of Cropper and Dunn added keyboard player Jerry Lee "Smoochie" Smith and drummer Terry Johnson. Charles "Packy" Axton, who went to school with Steve and Duck at Messick High, had just begun playing tenor sax and wanted to be in the band. Seeing as how his mom had her own recording studio, they let him join regardless of any musical skill he may have lacked.
The band expanded to seven with the addition of Don Nix on sax and Wayne Jackson on trumpet; singer Ron Stoots, who called himself Ronnie Angel, was the eighth member. There they were, a pack of young white guys obsessed with rhythm and blues, sneaking into nightclubs like the Plantation Inn in West Memphis, across the Mississippi River, to witness this wild music scene for themselves. When their big shot with Satellite arrived, the Royal Spades as a name didn't set well with Estelle; she demanded they change it. Taking inspiration from the ever-present theater marquee, she came up with Mar-Keys as a piano-related play on words.
All the group members offered ideas during the creation of "Last Night," taking weeks to come up with a finished piece of music (built around a one-note hook with "horn blasts," as Cropper called them). A stop-and-start approach added to the record's appeal, with session saxophonist Floyd Newman, who played on the finished take, supplying spoken lines when the music stopped: 'ohhh, last night!' and 'ohhh, yeah!' The third and fourth stops had silence, giving disc jockeys a chance to join in the fun, spouting their own sometimes outrageous or unintelligible phrases. Recording sessions went on for days, yet the completed take just didn't come together. On the day the finished master was laid down, some of the guys weren't present; black session musicians filled their spots (including bassist Lewie Steinberg, drummer Curtis Green and Gilbert Caple, who supplied what should have been Packy's big sax solo).
Jim Stewart didn't have much faith in the group's chances despite a solid demand for the band's performances in smaller River City venues. He disliked the finished take, baffled by all the hard work that went into making such a simple, repetitous finished product. He just couldn't hear the infectious brilliance of this haphazardly-assembled gem and was sure it would bomb. Good thing the public recognized what he couldn't. A tape of the song was dropped off at one of the city's top stations; it broke so quickly in Memphis that people were coming into the Satellite shop asking for it before a single had even been pressed. It was all over local radio in the summer of '61 and soon afterwards became a smash hit on the national pop and R&B charts, reaching number one on the Cash Box R&B chart in August. The silver lining burst a bit when a west coast label called Satellite, unaware of the Memphis company until "Last Night" exploded, contacted them about the name. Three more singles (the last of which, "Cindy" by Hoyt Johnson, was the company's country swan song) had already been released, but Jim and Estelle found an easy solution to the problem. They had already made plans for a subsidiary label, Stax (taken from the first two letters of each of their surnames). They changed the identification of the entire company; eventually the name became world famous.
The Mar-Keys' follow-up, "Morning After," appeared on Stax (a variation on "Last Night," it was a minor hit in the fall) and was followed by a series of singles and albums. "About Noon" completed the time-of-day trilogy at the end of the year. "Foxy" preceded "Pop-Eye Stroll," which made the charts in March '62. A few more 45s failed to make any noise, after which the group began to splinter. Cropper and Steinberg joined keyboard player Booker T. Jones and drummer Al Jackson; as Booker T. and the MG's they had a series of instrumentals with food titles (starting with the smash "Green Onions" in the fall of '62) and, with Dunn replacing Steinberg as the band's bassist in '65, put together an impressive run of hits lasting into the early 1970s. The success of "Last Night" led to a proliferation of instrumentals originating from the sloping Stax auditorium-turned-studio (by Newman, The Triumphs, The Van-Dells, The Cobras, Johnny Jenkins, Sir Isaac and the Do-Dads, Art Jerry Miller and Little Sonny) but only Booker T.'s outfit had hits.
The Mar-Keys settled into a steady routine as session players, providing backup for most of the label's singers (Rufus Thomas, Otis Redding, Sam and Dave, Eddie Floyd, and the list goes on), until a few years later when The Bar-Kays came on board to help with the workload (and, on Stax subsidiary Volt, wound up being the first of the label's instrumental bands to have hit records since Booker T.'s combo). The Mar-Keys went through many changes; Packy Axton, the "loosest cannon" of the bunch, went off to do his own thing when a chance session in Los Angeles with members of The MG's resulted in "Hole in the Wall" becoming a hit credited to The Packers. Later Mar-Keys members included "Last Night" session men Floyd Newman and ousted MG Lewie Steinberg. During all this time the band did their fair share of touring with a varying lineup and continued releasing records including "Banana Juice" and "Grab This Thing" in 1965 and "Philly Dog" in '66, a Stax theme song of sorts and a top 20 R&B hit. Newman, Wayne Jackson and saxophonist Andrew Love comprised the core of Mar-Keys musicians in the mid-'60s; they changed the name to The Memphis Horns and continued backing Stax acts, though "Double or Nothing" appeared under the Mar-Keys name in 1969.