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Melody, too simple to notice the undue attention Josie receives, uses her uncanny behavioral perception and becomes suspicious of Fiona and Wyatt.
Mega Records have organized a giant pay-per-view concert, whereby they plan to unleash their biggest subliminal message yet.
Fiona suffers a breakdown and reveals that she had been a social outcast in high school.
Wyatt reveals that his appearance is a disguise—that he went to the same high school as Fiona, but was a persecuted and unpopular albino. The government agents colluding with Fiona arrive, but because the conspiracy is exposed, they arrest Fiona and Wyatt as scapegoats to cover-up the government’s involvement in the failed scheme.
They are flown to New York City where they are renamed “Josie and the Pussycats”, much to the girls’ discomfort.
All goes well and their first single climbs rapidly to the top of the charts, but Valerie grows increasingly frustrated that all media attention is focused on Josie rather than the band as a whole.