Everyone in Radio rolls their eyes when they get serviced a greatest Hits CD. Usually it has 1 or 2 singles, a couple unreleased cuts then filler. Lots and lots of filler. I recently read a convincing anecdote for the release of the first greatest hits record. It's difficult to certify the claim. Just because I can't find an earlier best of or greatest hits doesn't mean there wasn't' one. "The absence of proof is not proof of absence" as William Cowper once
First of all a greatest hits wasn't possible until the LP. before that it would have to have been a box set of 78s. There was no other long playing format unless you want to get into obscure wire recorders. So with this tidbit we wantonly assume a a fifty year time line that takes us from one seminal greatest hits album to an almost weekly schedule of redundant releases.
So the story goes that in 1956 Johnny Mathis had just signed to Columbia records. He released a series of bland, non-intrusive singles and LPs. Ray Coniff was producing him and together they were pretty deliberately aiming for just being inoffensive background music. Adults bought his albums, but kids bought the singles. 45s were new and very popular with kids at that time. RCA had developed the 45, so Columbia was trying to win kids over to the LP, their innovation.
In 1958 Johnny's Greatest Hits was released on LP. It was the number one selling record for months, it sold half a million copies that year, and stayed on the Billboard top 100 for 490 weeks! (that's over 9 years) In 1959 the magazine identified it was a outright trend. In august of that year the mag claimed that it and the follow up More Johnny's Greatest Hits were the reason that Fats Domino and Elvis had released their greatest hits albums.
Today the Best-of collection is just a cheap release for a label to thrown on the schedule. There's no tour support, no recording budget; just a little remastering and a little work for the art department. Britney Spears dropped her first best-of after only a 6 years in music; The Backstreet Boys did the same after only 8. Hilary Duff not to be under done, released a best-of after only 2 records and zero top-10 singles. Labels blame Walmart and shrinking retail space. I suggest they blame themselves. More here.