Electric Light Orchestra‘s sixth album, A New World Record, is released, featuring the singles “Livin’ Thing”, “Telephone Line” and “Rockaria!”; the record goes gold and then platinum by the end of the year. This is the group’s first album to sport artwork with the now-familiar ELO logo, created from a mirrored image of the upper part of a Wurlitzer jukebox; following the post-Star Wars science fiction revival, future albums render this logo as a flying saucer. 
RCA Records releases Isao Tomita‘s interpretation of Holst’s The Planets, a new recording of the famous orchestral suite recorded entirely with synthesizers.
Epic Records releases the compilation album The Argent Anthology: A Collection of Greatest Hits, gathering highlights of the group’s output from 1969-74.
Warner Bros. Records releases Fleetwood Mac‘s 11th album, Rumours, featuring the singles “Don’t Stop”, “Dreams”, “Go Your Own Way”, “You Make Loving Fun”, and “The Chain”. The album is an almost instant chart-topper, capitalizing on the huge following from the band’s 1975 album.
Charisma Records releases Peter Gabriel‘s first self-titled solo album, featuring the single “Solsbury Hill”. This is Gabriel’s first album after departing Genesis.
The Alan Parsons Project releases its second album, I Robot, including the singles “I Wouldn’t Want To Be Like You”, “Breakdown” and “Don’t Let It Show” (the latter of which is covered latered by Pat Benatar). The album is loosely themed around fear of the future and technology, a far cry from the original plan for a concept album built around Isaac Asimov’s story “I, Robot” (though Asimov allows the album’s title since it lacks the comma). This is the Project’s first album on Arista Records.
Casblanca Records releases the Meco album Star Wars and Other Galactic Funk, a disco interpretation of the soundtrack of Star Wars on one side, with original compositions on the second side. The single extracted from the Star Wars medley will reach the top of the charts.
Mercury Records releases 10cc‘s fifth album, Deceptive Bends, the first to be recorded after the departure of founding members Kevin Godley and Lol Creme. The singles “The Things We Do For Love” and “Good Morning Judge” originate from this album.
Sire Records releases the Annie Haslam album Annie In Wonderland, produced by Roy Wood (ELO, Wizzard, The Move).
Mushroom Records releases the third Split Enz album, Dizrythmia, the first of the group’s recorded output to feature frontman Tim Finn’s younger brother Neil as the new guitarist. This is also the first album to feature new recruits Nigel Griggs on bass and drummer Mal Green, both of whom will remain through the band at the peak of its success in the early 1980s.
Electric Light Orchestra‘s seventh album, Out Of The Blue, is released, featuring the singles “Sweet Talkin’ Woman”, “Turn To Stone” and “Mr. Blue Sky”. Perhaps reflecting the now-widespread fascination with science fiction, this is the first ELO album to depict the band’s logo as a giant spaceship, a theme which is carried over into the extravagant set for the world tour that takes up ELO’s schedule for the next year.
The Alan Parsons Project releases its third album, Pyramid, including the singles “Can’t Take It With You” and “Pyramania”.
Mushroom Records releases the fourth Split Enz album, Frenzy, recorded after a long period of unemployment for the band, which went to the UK to find fame and became stranded there, too broke to return home. Most members of the group are dissatisfied with the finished album, feeling that it lacks the spark of demos they recorded during their England downtime, but it yields a genuine hit: Tim Finn’s punk-styled anthem “I See Red”.
Casablanca Records releases Lenny & Squiggy present Lenny and the Squigtones, an album combining spoken-word comedy and ’50s rock pastiches performed by Michael McKean and David Lander in their characters best known to the general public from recurring appearances on Laverne & Shirley.
Electric Light Orchestra‘s eighth album, Discovery, is released, featuring the singles “Don’t Bring Me Down”, “Last Train To London” and “Shine A Little Love”. The album is later criticized for being the point at which ELO became part of the disco fad, and is significant in that it’s the first ELO album without the band’s usual resident trio of string players.
Arista Records releases Frogs, Sprouts, Clogs & Krauts, the first album by The Rumour, best known for being Graham Parker’s backing band.
A&M Records releases the self-titled solo album by Lenny Zakatek, a frequent Alan Parsons Project vocalist.
The Alan Parsons Project releases its fourth album, Eve, including the single “Damned If I Do”.
A&M Records releases the The Police’s second album, Reggatta de Blanc, featuring the single “Message In A Bottle”.
Epic Records releases Reality Effect, the second album by British new wave band The Tourists (featuring future Eurythmics Annie Lennix and Dave Stewart). The album features the singles “So Good To Be Back Home Again” and a cover of “I Only Want To Be With You”, which charts in the UK.
Mushroom Records releases the Split Enz compilation album, Beginning Of The Enz. Rather than a straightforward “greatest hits” album, this LP gathers nearly all of the band’s early singles and B-sides recorded and released in the early ’70s prior to their first album. At the same time this album hits stores, Split Enz is back in the recording studio working on their next album, True Colours.
Mushroom Records releases the first Split Enz album of the 1980s, True Colours. Produced by future Prince protege David Tickle, the album gives the band a new sound and includes what will become its signature worldwide hit, “I Got You” (written by Neil Finn, who now alternates songwriting and lead vocal duties with his older brother, Enz co-founder Tim Finn). The album is released with eight different color variations, and is the first laser-etched LP. The album also suddenly draws the attention of American labels, resulting in A&M signing up to issue the band’s future output in North America.
Peter Gabriel‘s third self-titled solo album is released by Charisma Records (and, in the United States, by Mercury). The album reunites Gabriel with former Genesis bandmate Phil Collins, and features his earliest collaborations with Kate Bush; the single “Games Without Frontiers” becomes a hit in Europe.
A&M Records releases Zenyatta Mondatta, the third album by The Police, featuring the singles “Don’t Stand So Close To Me” and “De Do Do Do, De Da Da Da”.
The Alan Parsons Project releases its fifth album, The Turn Of A Friendly Card, including the hit singles “Time” and “Games People Play”.
RSO Records, the label responsible for releasing the Star Wars movie soundtracks to date, releases the Star Wars novelty tie-in album Christmas In The Stars. Produced by Meco Menardo (of Star Wars disco cover fame), the album not only answers the age-old question of what to get a Wookiee for Christmas when he already has a comb, but is the first credited studio session work of future rock god Jon Bon Jovi (credited on the LP under his given name, Jon Bongiovi). 
Island Records releases Steve Winwood‘s second solo album, Arc Of A Diver, on New Years’ Eve. Featuring the singles “While You See A Chance” and “Arc Of A Diver” and “Night Train”, the album is performed and produced entirely by Winwood, working in his home studio.
A Split Enz album with identity issues, the group’s sixth studio album is released as Corroboree in Australia and New Zealand, and as Waiata in all other territories. Again produced by David Tickle, this album continues with the punchier True Colours sound and yields the international hit “History Never Repeats”, whose video becomes one of the very first ever played by a new American music video channel, MTV.
Decca Records releases the tenth Moody Blues album, Long Distance Voyager, featuring the singles “Gemini Dream” and “The Voice”.
Electric Light Orchestra‘s ninth album, the science fiction/time travel concept album Time, is released, featuring the singles “Hold On Tight”, “Here Is The News” and “Twilight”. For the first time, almost all of the album’s string parts are played on keyboards.