Compilation LPs of the hits of the day had been released in the UK since the late 1960s. Such collection were primarily released by K-Tel and similar marketing companies, who sold not only records but anything else which might sell in large quantities via television advertising.
Although various labels had attempted to release their own hits compilations, the marketing giants who had established relationships with virtually every major label found it easier to license individual hit tracks, probably because their specialist operation was not in direct competition.
Everything changed when EMI – one of the biggest labels – and Virgin – the fastest growing of the smaller labels – agreed to a joint venture at the end of 1983, whereby they would release a double album of hits under the title Now, That’s What I Call Music.
Of its 30 tracks about half were already the province of the two labels and, by offering a share of the profits (rather than simply a licensing fee) to labels from whom they wished to license other tracks, the Now, That’s What I Call Music series quickly changed the face of TV hit compilations.
The first three double albums in the series all reached #1 in the UK chart, amassing sales of around two and a half million copies between them, while an accompanying series of videotapes (titled, of course, Now, That’s What I Call Music Video) also became prodigious sellers.
By the end of the year two major American companies, CBS and WEA, realised that major profits were there for the asking and produced their own version of Now, called The Hits Album. The LP topped the British chart and in doing so actually prevented the fourth volume of Now from reaching its expected position at #1.
Virtually every notable newcomer appeared on one of these albums, and the producers maintained that the albums stimulated interest in pop music via the convenient way they were packaged.
Other labels argued that sales of records by individual artists fell since their most successful tracks were available on the compilations.