Apparently, director Cameron Crowe originally wanted an entirely different artist to sing the song in that scene and Peter Gabriel only came into the picture after the first choice declined.
Also, an entirely different song was actually used during filming.
John Cusack with a boombox over his head as Peter Gabriel sings “In Your Eyes.”
Even if you’ve never seen Say Anything… you almost certainly know the moment.
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Say Anything... (3/5) Movie CLIP - Boombox Serenade (1989) HD