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"I’m certainly not the best of you," he said. "But looking around, I’m not the worst, either."
He performed "Father and Son," "Wild World" and "Peace Train," joined by a robed choir in the final song.
Peter Gabriel wasn’t around for his last induction in 2010, for his work as a member of Genesis. "It feels better when you’re here," he said backstage.
Gabriel said aspiring musicians should surround themselves with brilliance and, noting his early failures as a drummer, shouldn’t be afraid to try different things.
"Dream big, and let your imagination guide you, even if you end up dressing as a flower or a sexually transmitted disease," said Gabriel, known for his theatrical outfits during early Genesis days.
Coldplay singer Chris Martin credited Gabriel with creating a cathedral of sound and "he helped John Cusack get back his girlfriend in the movie ‘Say Anything.’" That movie’s climactic moment featured Gabriel’s song "In Your Eyes," and Gabriel performed a soaring version to celebrate his induction.
The first two artist managers were inducted into the Hall: the late Brian Epstein, of the Beatles, and Andrew Loog Oldham, of the Rolling Stones.
Associated Press correspondent John Carucci contributed to this report.
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