Steven Baker, vice president of product management at Warner Bros., remembers where he was two weeks ago when he heard that R.E.M.'s latest album, Out of Time, had reached the top of the pop albums chart. ''I was standing in the hallway near my office, and the head of promotion came up to me and said, 'Congratulations, buddy No. 1 album!' And I said, 'What album?'''
A week later, R.E.M. was bumped from No. 1 by Michael Bolton's Time, Love & Tenderness. But Baker should still be surprised. Five years ago, alternative-music fans would have traded in their black clothes for a world in which R.E.M. ruled the charts. Now Out of Time the Athens, Ga., band's eighth and most experimental release is approaching sales of 2 million, and its luminous single, ''Losing My Religion,'' has cracked the top 10 as well.
Baker says such figures are ''a testament to the good taste of the American public.'' But the album's good fortune is also due to the band's growing following and to astute marketing. Although R.E.M. will not tour this year, they did visit radio stations, make themselves available for extensive press interviews, and appear on Saturday Night Live and MTV's Unplugged.
Still, the main key to the album's success is ''Losing My Religion,'' which was chosen only after ''long, drawn-out discussions'' about releasing what Baker calls such an ''unconventional track'' as the album's first single. The gamble paid off, though. Warner Bros. first established the song at alternative, college, and album-rock radio stations and on MTV before sending it to Top 40 stations which, smelling success, were by then more willing to play a brooding single that features a mandolin, an instrument that hasn't been anywhere near the pop charts since Rod Stewart's ''Maggie May'' in 1971.
''The record crosses the boundaries of being just an alternative record,'' says Jay Taylor, program director of Tampa's Q105, which plays ''Losing My Religion'' alongside more standard Top 40 fare by Color Me Badd, Guy, and Amy Grant. Taylor admits that ''Losing My Religion'' is ''a hard record to program; you can't play L.L. Cool J behind it. But it's a real pop record you can dance to it.'' Still, the song's acceptance might reflect a much-discussed backlash against synthesizer-based, Top 40 dance music. Ratings at many Top 40 stations are down, and fatigued listeners seem to be more receptive to less conventional hits like ''Losing My Religion'' and Queensrÿche's ''Silent Lucidity.'' ''Music runs in cycles,'' says Taylor. ''The audience is ready to move into the next phase of music, bands like the Cure, the Divinyls, and R.E.M.''
Jefferson Holt, R.E.M.'s manager, thought something was up when a friend heard ''Losing My Religion'' in a gym in Athens. Says Holt dryly, ''It was a hit with the aerobics class.'' He says the unexpected success of the record ''isn't going to change anything''; R.E.M. still plans to take time off this summer before they start their next album. As for the band's reaction to hitting the top of the pop charts, Holt recalls, ''We all laughed and hugged each other.'' They didn't find it silly or unhip? ''We're not that jaded,'' he says with a laugh.