In order to understand the phenomenon of the Phantom, you have to put yourself back in the period in which "he" emerged. It's the mid-1970s, and a lot of the most compelling rock stars of the previous ten years have been dropping like flies -- Hendrix, Joplin, Brian Jones, Jim Morrison, etc. Basically, rock is mellowing out, except for a few arena acts, but for everyone who's getting off on Yes and ELP, as well as the surviving Allman Brothers, there are a lot of people who think the '70s suck.
The result was the first real effort to market rock music's "ghost bands," following in a tradition begun by the Glenn Miller Orchestra in the years after Miller's death. Some entrepreneurs did this the legitimate way in productions like Beatlemania, while others took a more roundabout way of tapping into this market. One could probably also lump the so-called "Masked Marauders" -- an anonymous group assembled in the wake of a fictitious review of a nonexistent super-session album that ran in Rolling Stone, to re-create the album as reviewed -- into this category.
Among the slightly more legitimate outfits was Klaatu, a Canadian-based (but otherwise anonymous) group that mimicked the sound and feeling of the Beatles' post-1966 era. Maybe they were actual musicians with real musical goals, but they played this supposed Beatles connection to the hilt, never revealing their identities. Capitol Records milked the press coverage for all it was worth. The Phantom was the next most familiar (curiously, also a Capitol act) of the '70s' unofficial "ghost" rock bands, imitating the sound of the Doors. Not that the lead singer really sounded all that much like Jim Morrison, except maybe as Morrison sounded at the end of his performing career, on lots of drugs -- he just delivered very pretentious and pseudo-profound lyrics in a kind of deep, druggy monotone, anticipating the voice that David Bowie used in "Putting Out Fire" from Cat People, while the guitar player worked the volume pedal and the keyboard man (and these all might have been the same guy -- it's not like this group was going to tour) handled the spook-house organ arpeggios and played chords on the piano.
Some of the more dubious practitioners of rock journalism even suggested in their writings that either:
a. That the work was closer to the late Jim Morrison than anyone would admit.
b. That while nobody could guess at the origins of the Phantom album, the whole matter raised questions about whether Jim Morrison were really alive (a lot of these "journalists" likely took their lead from slightly older colleagues who, five years earlier, had gotten weeks of column space filled with practically no work or effort over the notion that Paul McCartney was dead).
The whole affair was something of a corporate embarrassment to Capitol, showing how far they'd sunk in the years since the Beatles had been cutting records for them -- the company was happy to keep silent while revenue came in from this and the Klaatu album, and it was easier than trying to sign up and nurture music performers that actually had a future. The "group" and the album vanished without a trace by 1976, as though they'd never been there. Bruce Eder