(Bloomberg) -- Looking at the roster of top-selling records, you could easily think greatest hits albums are doing better than ever. As of September, two dozen had made it onto the music industry’s list of the 200 bestsellers this year, compared with only 10 in 2010.
In reality, the cultural and economic might of collections like the Eagles’ Their Greatest Hits (1971-1975), the all-time bestseller in the US, has declined dramatically in recent years. Purchases have tumbled as streaming replaced CDs and digital purchases as the primary way people consume music. These once-mainstream releases are now viewed primarily as a novelty item — designed for superfans and their vinyl or CD collections, often with dressy packaging and a price that can top $100.
These records are for “someone who wants to own a product and support an artist in a different way than in streaming,” said Michael Kachko, a senior vice president at BMG, whose artists include Mötley Crüe and Jelly Roll. “This is your starting point.”
For decades, listeners stocked their shelves with greatest hits albums as a cost effective way to acquire the best of an artist’s music in one purchase. They became so prevalent that, even today, two of the 10 best-selling albums in the US are greatest hits compilations. In addition to the Eagles’ collection, Billy Joel’s Greatest Hits Volume I & Volume II ranks among the most-purchased ever.
At the music industry’s peak, from 1994 to 2000, compilations could sell millions of copies. Garth Brooks, for example, sold 5.49 million copies of 1994’s The Hits in its first year, according to Luminate, the data company behind the Billboard charts. The Beatles’ 1, from 2000, sold 7.69 million in 12 months, and record companies like Universal Music Group NV and Sony Music Entertainment came to rely on such compilations for revenue and profit, particularly as people transitioned their vinyl and cassette collections to the burgeoning CD format.
“The CD era, with the format coming in, gave us all a shot in the arm,” said Sig Sigworth, president of Craft Recordings, which is part of closely held Concord. Craft’s catalog includes Bush and Alice in Chains.
Now, however, fans no longer need to buy such albums to cherry-pick hits. Streaming services like Spotify Technology SA create playlists or auto-play a group’s most popular tracks. The result is that purchases of compilation albums last year in the US, based on ones appearing in the top 200 list, fell to 1.3 million, down from a recent peak of 3.7 million in 2011, according to Luminate.
In 2019, Tom Petty & The Heartbreakers sold just 78,000 copies (digital and physical) of The Best Of Everything (The Definitive Career Spanning Hits Collection 1976-2016), which it released that year. The Weeknd’s The Highlights, the artist’s second compilation, sold 94,000 copies in 2021, when it was issued, according to Luminate.
The appearance of greatest hits albums on the Billboard 200 today is essentially the result of a bookkeeping decision by Billboard that makes the collections appear to be selling better than they really are.
When a listener streams a song from a group, like the Eagles’ Take It to the Limit, it counts toward whatever Eagles album had the most physical sales that week. Especially with older artists, that’s usually going to be a greatest hits compilation, since the record industry pushes those so hard to customers of vinyl and CDs.
As a result of the streaming’s popularity, the music industry is rethinking how it markets such albums. Where greatest hits collections once converted casual listeners into avid fans, labels now view them as a prong in a broader strategy. Releasing a greatest hits album in 2024 might help an artist promote other efforts and businesses, like a book, biopic, new single or tour. Having an older artist’s compilation suddenly pop up on the Billboard 200 helps that effort.
Sony Music, for example, released a greatest hits collection of sorts – Evergreens: Celebrating Six Decades on Columbia Records – featuring Barbra Streisand’s favorite songs, leading up to her memoir release in 2023.
That also means a greater focus on physical products, like vinyl and boxed sets, trying to hype them as collector’s items.
“A lot of greatest hits on the physical side are signed off by the band,” BMG’s Kachko said. “A lot of streaming playlists are made by algorithms.”
Labels also might use a greatest hits record to promote a new song and market albums to superfans at higher prices. Universal reissued The Beatles’ Red and Blue albums last year to include their last song together, Now and Then, and new mixes. The six-record vinyl boxed set costs $174.98. A four-LP Aerosmith set costs $150, while Abba’s four-LP collection, The Singles: The First Fifty Years, sells for $140.
“In the ’80s and ’90s, [we were] trying to reach that casual consumer that literally spent $20 a year on music,” said Richard Story, president of Sony’s commercial music group. “Now, because everything is accessible on streaming services, you are serving the fans.”
(Updates with Craft Recordings’ ownership in sixth paragraph.)
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