Background
Nirvana was a band from Aberdeen, Washington, formed by Kurt Cobain and Krist Novoselic, that had signed to Seattle independent record label Sub Pop. The group released its debut album Bleach in 1989, with Chad Channing on drums. However, Channing left Nirvana in 1990, and the band was in need of a permanent drummer. During a show by hardcore punk band Scream, the group's drummer, Dave Grohl, impressed Novoselic and Cobain. When Scream unexpectedly disbanded, Grohl contacted Novoselic, made his way to Seattle, and was soon invited to join the band. Novoselic said in retrospect that when Grohl joined the band, everything "fell into place".
Meanwhile Cobain was writing a number of new songs. At the time Cobain was listening to bands like R.E.M., The Smithereens, and the Pixies. Feeling disillusioned by the heavy detuned rock popular in the Seattle grunge scene upon which Sub Pop had built its image, Cobain—inspired by his contemporary listening habits—began writing songs that were more melodic. A key development was the single "Sliver", released on Sub Pop in 1990 (before Grohl joined the band), which Cobain said "was like a statement in a way. I had to write a pop song and release it on a single to prepare people for the next record. I wanted to write more songs like that." Grohl said that the band at that point often made the analogy of likening their music to children's music, in that the band tried to make its songs as simple as possible.
By the start of the 1990s, Sub Pop was experiencing financial difficulties. With rumors that Sub Pop would sign up as a subsidiary for a major label, the band decided to "cut out the middleman" and start to look for a major label. A number of labels courted the band, but Nirvana ultimately signed with Geffen Records imprint DGC Records based upon the recommendation of its management company Gold Mountain, who also managed the band's idols (and recent Geffen signings) Sonic Youth, and Sonic Youth's Kim Gordon.
Read more about this topic: Nevermind
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