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It’s interesting looking back on this period. Some may think that it was all about Nirvana and grunge but, as you mention, the reality was much different. It was more a rock era of “alternative” music than it was grunge. Artists like XTC, Tori Amos, Matthew Sweet, Sarah McLachlan, and yes Peter Gabriel were being played regularly on rock radio stations. While not in any way “grunge” their music was definitely an alternative to what was being played on mainstream pop radio. This is what characterized the era. Grunge was a part of the movement but not the defining feature of alternative rock radio.

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Analysis-wise, you’ve touched on some very real points, relevant to Gabriel’s mental state at the time. I believe he was going through a divorce, which can certainly have an effect on your songwriting style. I also (IMHO) believe he was trying to commit to a mainstream audience that had given ‘So’ the attention it deserved. I like ‘Dirt’ for various and sundry reasons - his cadence is varied, angry then complacent and complicated as well. Perhaps that’s what ended his time on the charts? In any case, his most recent work is an absolute stunner and I think it’s safe to say that Gabriel has always been ahead of us musically… for the better.

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