In the beginning -- all right, it was 1974 -- there was Burt & Dinah and Jackie O and Martha Mitchell and Faye Dunaway and Raquel Welch and Paul Newman and Mary Tyler Moore.

Some 2.6 billion copies later, the formula has barely changed: Famous names, inside gossip, lots of pictures, ringing cash registers. Last week's People magazine had Jackie O on the cover, with inside features on the likes of Michael Jackson and Mel Gibson and Jerry Garcia and David Letterman's mother.

People is celebrating its 20th anniversary, and in case you failed to notice, there is a 322-page double issue out today, two coffee-table books, a behind-the-scenes book, an $8 million advertising campaign and a two-hour ABC special next Monday.

What is most striking about the spectacular success of People -- a magazine that has put Princess Diana on the cover 55 times -- is how the rest of the journalistic world now shamelessly pants after the same kinds of stories.

"It's the celebrification of America," says Steve Friedman, executive producer of the "Today" show. "We've come into a world where everyone's treated like a celebrity, whether they're a politician or an author or whatever. How else do you explain Fabio?"

When Time Inc. launched the magazine two decades ago, there was no "McLaughlin Group," no "Capital Gang," no Rush Limbaugh, no Howard Stern, no "A Current Affair," no "Hard Copy," no "PrimeTime Live," no "Eye to Eye With Connie Chung," no Entertainment Weekly or Movieline or Premiere or Spin or Vibe or Wired. The great media beast has grown ever more insatiable, demanding more celebrities and pseudo-celebs to fill all those pages and all that air time. And People, whose choice of a cover subject can cause a million-copy swing in newsstand sales, has an unerring feel for who's hot and who's history.

"People is a must-read for me, has been for some time," says CBS News anchor Dan Rather. "I am a hard-news guy, but I'm also a hard-news guy trying to last. I won't do anyone much good if I'm fishing and drinking a fifth a day in Florida. A lot of our viewers read People and I should be reading at least some of what they read."

Landon Y. Jones, who has been with People since the beginning and is now managing editor, says his task has grown infinitely harder because of the explosion of media outlets -- particularly tabloid shows that pay for interviews -- chasing the same brand-name stars.

"When we had the field to ourselves, we could put anybody on the cover," Jones says. "Anybody in a hot TV show or hot movie, the public was really interested. Usually they had a product to push, and we wrote about it, and people bought it." Now, he says, "there's celebrity fatigue, celebrity clutter."

People recently lost the chance to do a cover on Tom Cruise, Jones says, because it would not agree to put certain areas off limits. "The excessive demand has driven up the price of access to the stars. What is the price of access? It's dollars -- we do not pay for stories -- or some aspect of control that's negotiated away: Who's the writer? What's the cover line going to say? Who's going to take the picture? What's not going to be talked about? There's this endless shopping list. ... The loser down the line is the reader, who doesn't know what kinds of compromises have been made."

Yet People remains a key cog in the starmaker machinery, offering a nonconfrontational forum for those mired in controversy. "The general presumption is it's going to be a 'friendly' interview," Jones says. "I recognize that if there's an unfriendly result, I'm going to have a PR problem with that publicist. It would be naive not to think that."

This gentle journalism has helped the magazine score some wide-ranging exclusives. It helps explain why Supreme Court Justice Clarence Thomas, in the wake of Anita Hill's sexual harassment allegations, posed for the magazine hugging his wife, Virginia, who defended him in an interview. And why Nancy Kerrigan granted an exclusive interview and photo spread ("At home with the injured skater as she renews her quest for Olympic gold"). It didn't hurt that Kerrigan had previously been named one of People's 50 Most Beautiful People.

From the beginning, founding editor Richard Stolley had a basic formula: "Young is better than old. Pretty is better than ugly. Rich is better than poor. TV is better than music. Music is better than movies. Movies are better than sports. Anything is better than politics. And nothing is better than the celebrity dead."

Stolley, now a Time Inc. executive, also decreed a focus on "ordinary people caught up in extraordinary circumstances," which broadened the weekly's appeal. "If we tried to be an all-celebrity magazine, we would've run out of celebrities and it would not have taken hold the way it did," he says now. Stolley once put Watergate conspirator E. Howard Hunt on the cover, but "we pretty quickly learned that we had to have celebrities who had a new movie or TV show or record."

When People was launched, the media culture still had a veneer of high-mindedness in those days. In 1977, according to "The House that Roone Built," a new book by Marc Gunther, the journalistic Establishment chided ABC for leading its newscast with Elvis Presley's death, while CBS and NBC focused on Ronald Reagan coming out against the Panama Canal treaty.

"We at CBS sneered," says Daniel Schorr, now with National Public Radio. "Then we found out this had helped ABC's ratings, and at CBS you began to see that the death of a personality would be a big story. The bottom line on celebrity journalism is that it does sell." Of course, many media figures have themselves become top-drawer celebrities, as underscored by Diane Sawyer's new contract for up to $7 million.

In this personality-driven environment, such seamy tales as the Michael Jackson allegations, the Heidi Fleiss allegations, the Lorena Bobbitt trial, the Tonya Harding saga and the charges about President Clinton's sex life quickly make their way up the media food chain.

"A People cover alone won't do it," Rather says. " 'Hard Copy' or 'Inside Edition' alone won't do it. But if you have a People cover and one of the three networks, that makes it hard to ignore. If the New York Times or Washington Post or L.A. Times or Wall Street Journal goes with it, then the pressure becomes impossible."

Fortunately for People, many famous-for-being-famous folks can be endlessly recycled. The 20th anniversary issue, recalling the fuss over "jiggle TV," offers a reunion of "Charlie's Angels" in a cleavage-baring centerfold featuring Farrah Fawcett, Kate Jackson and Jaclyn Smith.

Some of People's obsessions over the years now seem rather trivial. In 1975, according to Judy Kessler's book "Inside People," Cher left Sonny and moved in with David Geffen; left Geffen and married Gregg Allman; filed for divorce after nine days, then tried to patch things up with Allman. She made People's cover three times in the process.

The coupling and uncoupling of actresses remains a People passion. In 1991 the magazine paid $175,000 to Elizabeth Taylor's favorite charity for the right to photograph her wedding to eighth husband Larry Fortensky. Last year People went bananas obtaining pictures of Julia Roberts's marriage to Lyle Lovett, two years after its cover story on her breakup with Kiefer Sutherland. Such story selection is no accident, for women account for two-thirds of the average weekly circulation of 3.1 million.

Jones says People's serious side is overshadowed by its star-studded covers. The magazine has abandoned Stolley's edict -- "anything is better than politics" -- by doing pieces on Bill and Hillary Clinton, Al and Tipper Gore, George Stephanopoulos, Dee Dee Myers, David Gergen, Janet Reno, Ruth Bader Ginsburg, Bob Dole and other Washington types. In the expanding People galaxy, politicos are now bona fide stars.

No one understood this better than Clinton media adviser Mandy Grunwald, who needed a sympathetic vehicle in the summer of 1992 after her candidate had been savaged by the press. Jones wanted a cover story on Hillary; Grunwald pitched a piece on the couple's family life. People even got a cover photo of the couple curled up with daughter Chelsea in a back-yard hammock, a portrait of domestic bliss.

"I was certainly aware it was going to be a good bounce for them, but I really wanted to do the story. ... It felt like a valid exercise," says Jones, who conducted the interview.

The patented approach paid off again when People put the new First Lady on the cover during Inauguration Week, billing her as a "Super Mom" who is "humorous, warm, sensitive, intelligent."

"I was euphoric when Hillary Clinton became the bestseller of the year," Jones says. "I thought we'd found our new Diana. Diana was starting to disappear from the radar screen. I really need a new Diana."

Princess Diana ....... 55 times

Elizabeth Taylor ..... 26

Fergie ............... 19

John Travolta ........ 19

Madonna .............. 17

Cher ................. 17

Michael Jackson ...... 15

Farrah Fawcett ....... 14

Prince Charles ....... 14

Jackie Onassis ....... 12

Princess Caroline .... 10

Jane Fonda ............ 9

Source: "Inside People," by Judy Kessler

1. John Lennon: A Tribute (1980)

2. Princess Grace: A Tribute (1982)

3. Fifth Anniversary Issue (1979)

4. Wedding of Prince Andrew & Sarah Ferguson (1986)

5. Princess Diana & Prince William (1982)

6. Wedding of Prince Charles & Lady Diana (1981)

7. Olivia Newton-John (1978)

8. Karen Carpenter's Death From Anorexia (1983)

9. Brooke Shields (1980)

0. Priscilla Presley Talks (1978)

Source: People magazine.