Alternative rock is a broad umbrella term consisting of music that differs greatly in terms of its sound, social context and regional roots. By the end of the 1980s, magazines and zines, college radio airplay, and word of mouth had increased the prominence and highlighted the diversity of alternative rock, helping to define a number of distinct styles (and music scenes) such as noise pop, indie rock, grunge, and shoegaze. Most of these subgenres had achieved minor mainstream notice and a few bands representing them, such as Hüsker Dü and R.E.M., had even signed to major labels. But most alternative bands' commercial success was limited in comparison to other genres of rock and pop music at the time, and most acts remained signed to independent labels and received relatively little attention from mainstream radio, television, or newspapers. With the breakthrough of Nirvana and the popularity of the grunge and Britpop movements in the 1990s, alternative rock entered the musical mainstream and many alternative bands became successful.
By the end of the decade, alternative rock's mainstream prominence declined due to a number of events that caused grunge and Britpop to fade and led to the hiatus of the Lollapalooza festival.
Before the term alternative rock came into common usage around 1990, the sort of music to which it refers was known by a variety of terms. In 1979, Terry Tolkin used the term Alternative Music to describe the groups he was writing about. In 1979 Dallas radio station KZEW had a late night new wave show entitled "Rock and Roll Alternative". "College rock" was used in the United States to describe the music during the 1980s due to its links to the college radio circuit and the tastes of college students. In the United Kingdom, dozens of small do it yourself record labels emerged as a result of the punk subculture. According to the founder of one of these labels, Cherry Red, NME and Sounds magazines published charts based on small record stores called "Alternative Charts". The first national chart based on distribution called the Indie Chart was published in January 1980; it immediately succeeded in its aim to help these labels. At the time, the term indie was used literally to describe independently distributed records. By 1985, indie' had come to mean a particular genre, or group of subgenres, rather than simply distribution status.
The use of the term alternative to describe rock music originated around the mid-1980s; at the time, the common music industry terms for cutting-edge music were new music and post modern, respectively indicating freshness and a tendency to re contextualize sounds of the past. Individuals who worked as DJs and promoters during the 1980s claim the term originates from American FM radio of the 1970s, which served as a progressive alternative to top 40 radio formats by featuring longer songs and giving DJs more freedom in song selection. According to one former DJ and promoter, "Somehow this term 'alternative' got rediscovered and heisted by college radio people during the 80s who applied it to new post-punk, indie, or underground-whatever music". At first the term referred to intentionally non–mainstream rock acts that were not influenced by "heavy metal ballads, rarefied new wave" and "high-energy dance anthems". Usage of the term would broaden to include new wave, pop, punk rock, post-punk, and occasionally "college"/"indie" rock, all found on the American "commercial alternative" radio stations of the time such as Los Angeles' KROQ-FM. Journalist Jim Gerr wrote that Alternative also encompassed variants such as "rap, trash, metal and industrial". In December 1991, Spin magazine noted: "this year, for the first time, it became resoundingly clear that what has formerly been considered alternative rock - a college-centered marketing group with fairly lucrative, if limited, potential- has in fact moved into the mainstream". The bill of the first Lollapalooza, an itinerant festival in North America conceived by Jane's Addiction frontman Perry Farrell, reunited "disparate elements of the alternative rock community" including Henry Rollins, Butthole Surfers, Ice-T, Nine Inch Nails, Siouxsie and the Banshees and Jane's Addiction. That same year, Farrell coined the term Alternative Nation. In the late 1990s, the definition again became more specific. In 1997, Neil Strauss of The New York Times defined alternative rock as "hard-edged rock distinguished by brittle, '70s-inspired guitar riffing and singers agonizing over their problems until they take on epic proportions".
Defining music as alternative is often difficult because of two conflicting applications of the word. Alternative can describe music that challenges the status quo and that is "fiercely iconoclastic, anticommercial, and antimainstream", but the term is also used in the music industry to denote "the choices available to consumers via record stores, radio, cable television, and the Internet." However alternative music has paradoxically become just as commercial and marketable as the mainstream rock, with record companies using the term "alternative" to market music to an audience that mainstream rock does not reach. Using a broad definition of the genre, Dave Thompson in his book Alternative Rock cites the formation of the Sex Pistols as well as the release of the albums Horses by Patti Smith and Metal Machine Music by Lou Reed as three key events that gave birth to alternative rock. Until recent years (early 2000s) when indie rock became the most common term in the US to describe modern pop and rock, the terms "indie rock" and "alternative rock" were often used interchangeably; whilst there are aspects which both genres have in common, indie rock was regarded as a British-based term, unlike the more American alternative rock.