Howard Applebaum, head of Kemp Mill Records, was one of the lucky 50 invited to Michael Jackson's Encino, Calif., home recently for a preview of the "Bad" album, due out next month (Kemp Mill happens to be one of the nation's top 25 retail accounts for CBS Records). Guests were flown to Los Angeles by CBS and put up at the Beverly Hills Hotel; after a listening party there, they were taken to Encino by limousine for an elegant dinner and given the run of Jackson's estate, though apparently no one took it upon himself to go up to the second floor of the house to inspect Jackson's living quarters.

At the dinner, Jackson sat with label executives including Walter Yetnikov, president of the CBS Records Group, and Al Teller, president of the CBS Records Division. Jackson, described by Applebaum as "smiling and quite animated," didn't address the group, but later, when he was taken around and introduced to his guests, he did shake hands (his right one was gloved, of course) and offer some quiet "you're welcomes" to the accumulating "thank-yous."

"We really had free access to grounds and the two houses," said Applebaum, adding that he was quite impressed by the unguided tour of the estate.

"Down by the front gate there were about 30 or 40 kids. I hear there are always that many there, hoping to catch a glimpse of him -- and he occasionally invites one in." Applebaum also noted uniformed guards on the roof with walkie-talkies and "a guardhouse that has about 15 television monitors.

"Next to the five-car garage, there's a flower store -- no cash register, just a shop for flowers for the house, which is stunningly decorated. Next to it is a candy store with a Mixmaster for milkshakes and lots of candy -- a kid's fantasy come true." Around desert time, Jackson's pet chimp, Bubbles, sat in Michael's lap and was spoon-fed ice cream.

There is also a game room filled with pinball and video games -- "kids come by here pretty frequently, apparently," said Applebaum. Nearby are the llama pen, Bubbles' retreat, an aviary for exotic birds and a fish pond. "You got the impression it was inspired by Disneyland and was set up for kids," said Applebaum, recalling street signs with inspirational messages along the walkways.

Above the garage, there's a small gallery with a life-size wax figure of Jackson, cases filled with gloves and stage jackets and costumes, photo blowups on the wall. In the house itself is another "trophy room" with gold records (mostly from overseas), a special display -- peopled with Disney characters -- that salutes Jackson as "the world's most popular entertainer" and a map of the world with miniature gold records pinned to those countries where Jackson's had gold and platinum sales (it must be a very crowded map).

"I was knocked out by it all," said Applebaum, adding that he felt the same about "Bad," though "a lot of its success will depend on whether people want to like it or not." He cited the five years that have elapsed since the release of "Thriller," the possible burnout of Michaelmania and the media fascination with Jackson's eccentricity (he has been pictured sleeping in an oxygen-fed capsule, reputedly to preserve his youth; has gone out in public wearing a rubber mask and a wig; and has provided a field day for the press with his persistent bidding for the remains of the "Elephant Man").

Applebaum describes "Bad," which hits the market Aug. 31, as "kind of a stretch within the genre of contemporary hit radio and urban music. It's cooler sounding, a little more jazzy in spots, and his projection is a knockout. There's some great dance stuff on it, and the best song may be the one inspirational number."

The album's first single, "I Just Can't Stop Loving You," is doing well both on radio and in the stores, even though it has no supporting video. There was supposed to be an airplay embargo on it until last Wednesday, but after New York's Z-100 broke that embargo on Tuesday, everyone else followed suit. Local stations quickly putting "Loving You" into medium-to-heavy rotation include WKYS, WHUR, WPGC, WAVA, Q-107, WOL and WDJY (which played it last Tuesday for one solid hour).

The follow-up single, "Bad," will be released when "Loving You" cools off. For that one, there is a gargantuan 20-minute shades-of-"Thriller" video, directed by Martin Scorsese. Look for a world premiere via network special around the time the album ships. Although "Thriller" sold 38.5 million copies worldwide, initial shipments on "Bad" will be less than 2 million, according to one reliable industry source. Incidentally, the CD version of the "Bad" album will include an extra cut, "Leave Me Alone," written by Jackson. And, according to Billboard, Jackson will recut as many as four songs in Spanish for the huge Hispanic market.

Among those for whom "Bad" is good news is Pepsi-Cola, which paid Jackson $10 million in an endorsement deal last year and which subsequently spent several million dollars producing spots that no one has seen yet. Pepsi had originally planned to premiere them during last February's Grammy Awards (as it had in 1984 with the Jackson Victory Tour spots), but had to pull them when the album was delayed. Pepsi won't say which of "Bad's" 11 tunes it will be using for one of the spots; Jackson's contract allows the corporation to use one song off the album and another tune written especially for the commercials.