(FORTUNE Magazine) – With album sales flagging, digital-piracy issues lingering, and EMI dumping artists, bad news has been in heavy rotation for the recording industry lately. But Big Music has managed one hit: a series of CDs put out through an unusual multilabel collaboration titled Now That's What I Call Music.

Volume 9 in the series--featuring Top 40 hits from acts like Mary J. Blige and 'N Sync--was released in late March and promptly debuted at No. 1 on the Billboard 200-album chart. Two weeks later it was in striking distance of hitting the one million sales mark, which gives it platinum status. That's become the norm. Since Now debuted in the U.S. in 1998, every release has gone double-platinum or better. Including last year's Christmas edition, the ten disks have shipped more than 30 million copies. At up to $19.99 a pop, that comes to several hundred million dollars.

The Now brand is owned by Virgin/EMI, and a similar series has been around for years in Britain. (Volume 51 just came out there.) As in Europe, responsibility for releasing each volume rotates among the partner labels--EMI, Universal, Sony, and Jive. Profits are divided according to a partnership agreement (the labels don't disclose the details or revenue figures). A division of Universal called UTV Records is handling Now 9. "It's a collaborative partnership with some serious power behind it," says Jeff Moskow, a vice president at UTV. Warner and Arista are in a similar collaboration that puts out the Totally Hits series. An even newer wrinkle, Totally Country, is put together by Warner, BMG, and Sony. (All package tunes while they're still hot, breaking from the more familiar tradition of K-Tel, which repackaged what used to be.) To sign of-the-moment acts, the Now contingent also strikes deals with third-party artists and labels. Examples on Now 9 include Nelly Furtado (DreamWorks) as well as Pink and Adema (both Arista).

Such joint ventures are relatively new in the U.S., and they're happening against the backdrop of a much bigger shift: The labels are backing away from the business of releasing individual singles. "Singles are not profitable" in most cases, says Michael Nathanson, an analyst at Sanford C. Bernstein. "They also undercut album sales." Big Music's approach lately has been to take away the cheaper single option entirely. In one recent week, half the top ten was made up of songs like "Ain't It Funny" by Jennifer Lopez that were never released as singles in the U.S. But that backfires if consumers--unwilling to pay for the whole album--simply steal the song off the Net. The Now alternative offers a middle ground, and record companies can still pocket a slice of the Now sticker price.

Is there a downside? U.S. labels resisted the idea initially, partly out of concern that the strategy might undercut artist development. That's not an issue for monster acts like Britney Spears, but inclusion on a compilation may well take a bite out of potential album sales for a lesser-known artist such as BB Mak. Geoff Mayfield, director of charts for Billboard, says his research suggests that most of the albums by artists represented on a given Now disk take a slight dip on the week that volume is released. And the last few Now releases have posted slightly less impressive debuts than earlier versions. Given the music industry woes of the moment, however, those are what anyone would call minor complaints.