Time-Life made its name with books, but sequestered behind the name in Alexandria is a record company that wins industry awards and critics' hosannas, and quietly sells millions of records.

Originally part of the books operation, Time-Life Records began in New York in 1967 with a series called "The Story of Great Music." Last year, and 15 major series later, it sold 800,000 sets of records and brought in more than $15 million with its mail-order approach to carefully defined groups of audiophiles, nostalgia fans and collectors -- particularly those who have been virtually abandoned by record stores in the 1980s.

"We are an entrepreneurial business," says president Paul Stewart, who has been with Time-Life since 1963, and with Music since 1982. "We decided to try to make our recordings technically superior to anybody else's. That's the turf that we're setting out to conquer. We want people to know up front they're getting the best recordings they can for the price. Being a small company, we can almost afford nothing but success."

Recently, they've kicked off a new Legendary Singers series with volumes on Nat (King) Cole and Frank Sinatra. Ella Fitzgerald and Perry Como are waiting in the wings. There's the "Soft Lights, Sweet Music" box, featuring the sweet big band sounds of Paul Whiteman, Hal Kemp, Guy Lombardo and others. The "Great Ages of Music" series is up to the 14th of 20 volumes. The last two years have seen the winding up of "The Big Bands" (15 sets, with another 10 on the drawing board); "Giants of Jazz" (28 sets); "American Musicals" (15 sets); and the "Metropolitan Centennial Collection of Great Opera" (12 sets).

Critics, scholars and technicians along with musicians such as Benny Goodman and James Levine of the Metropolitan Opera choose the selections. The production team, headed by Grammy-winning producer/writer and record restoration expert Michael Brooks, track down master recordings, including the metal masters used to create the original shellac 78s. Sound engineers work on tape to decrease scratches and hisses. Of his "Big Bands" set, Goodman said, "My music never sounded better."

In compiling that "Big Bands" series, Brooks found that for 85 to 90 percent of the cuts, metal masters either didn't exist or were very badly damaged.

"We got mint shellacs from collectors," Brooks says. "In most other big band collections, people just bought or leased the tapes. We spend a lot of time and money in the studio remastering, but it's paid off. And buyers are demanding that because they get used to quality."

Time-Life guarantees the record companies a royalty and gets direct-mail rights only, though there have been several bungled attempts at retailing inexpensive compilations (country and Arthur Fiedler) in supermarkets.

Says Stewart, "Record companies accept this is a different market, one they're not reaching, so they're cooperative. If you asked them for a Barbra Streisand, they wouldn't give it to you. This is what is called an 'after market.' Our basic constituency is the mail-order audience. I don't think the record companies want us in the retail stores. I think we would be formidable competition."

An educational theme marks Time-Life's projects. For instance, "Great Ages of Music," is an attempt to capture the sweep of five centuries of music from the Renaissance to the 20th century.

"This is a very important part of a mail-order record company," says Stewart, "almost an introductory series of recordings of classical music. It's produced in the same Dutch Polygram plant that produces Philips, DGG and London, to the same standards."

Over the past 18 months, some basic changes have occurred in Time-Life's approach: high-quality cassettes have become a major configuration; the emphasis has shifted from print detail to sonic enrichment; and they're experimenting with new elements of marketing (custom subscriptions) and packaging (cassette collections).

Tapes now account for more than 50 percent of Time-Life's business (which parallels the industry at large) and the advertising for the "Portable Mozart" even offers a tape player as a premium. The 16-cassette Mozart collection is digested from 20 five-record sets, and was manufactured in real-time duplication. "The cost is considerable but it brings up every single nuance," Stewart says. It sells for $175.

For $200, big band fans can get the 20-cassette "Swing Era," which contains rerecorded big band tunes using original arrangements.

"Space is a premium," Stewart says. "Audio components are shrinking, cars are smaller, apartments and houses are smaller, so people aren't interested in big, bulky record albums."

Time-Life also is marketing "supercassettes," with more than one record on one cassette. "One cassette can have as much music on it as a box. On 'The Big Bands,' we combined two records into one cassette, which proved to be surprisingly popular. The current wisdom in the industry is to give two cassettes believing that the customer will think he has a better buy. We opted the other way -- we wanted it as convenient as possible for people to carry," Stewart says.

Another change is a decrease in the amount of printed material that accompanies the records. The original Time-Life series were treated like a book-publishing venture and most older series featured exhaustively researched booklets.

"We used to spend $6 or $7 a set on paper goods alone," Stewart recalls. "We've reinvested the money in superior sound," ranging from half-speed mastering to virgin vinyl and premium tape.

For its classical series, Time-Life does a lot of straightforward leasing and packaging, with an eye on archival overview. For its overviews on the "American Sound" (jazz, big bands, popular singers, musicals), the process is a virtual reconstruction of the sound. Time-Life leases its music from many different companies and whenever possible goes back to the original master recordings. The production team, headed by Brooks, then uses state-of-the-art technology to recover the original nuances and eliminate the aural debilitation that often masks our recorded heritage.

Then there are the advertising campaigns (in magazines, sometimes on television and increasingly in professional newsletters), direct mailing to more than a million potential customers, anticipation as returns come in, expansion of some projects, consolidation of others. "You hope you wind up with an empty larder," Stewarts says."

Time-Life can come close to predicting a series' success on the basis of consumer reaction to the first two offerings in the series, though even with a successful series the numbers tend to get lower as the set numbers go higher. Says Stewart: "The object is not to be caught with inventory."

On "Giants of Jazz," for instance, "we wound up with overstocks in only four titles out of 28."

When they get stuck with a lot of records, a series can be repackaged, like the "Country-Western Classics" that resurfaced after a poor first run -- with new covers and a new leadoff package that had Willie Nelson replacing Hank Williams.

The country series also inspired an adventurous new marketing technique, the custom subscription plan, which goes something like this: If you buy Willie, you get to pick the other sets off a list, and Time-Life won't send anything except what's checked off. Stewart calls it "continuity with options, which is unique in mail-order record selling."

"With 'Big Bands' and 'Great Ages of Music,' people tend to buy most of the series," he adds. And they tend to be better customers if they are spurred by a direct mail solicitation "than if they come in through TV Guide. The thoroughness of direct mail brings in a better, less impulsive customer." And research takes it even further: "A customer who cuts out a coupon is better than one who rips out a coupon."

The average Time-Life customer is more likely to be cutting than ripping: he's older and settled, and consequently not well served by most modern record stores, which are generally youth oriented. He's also more likely to respond to the technological turnaround effected by Brooks and his team, particularly in archival material. "It's the first time a lot of this material has been through a Noise Depressor and that really has helped us," Stewart explains. "We've been able to promise clean sound and we've been able to deliver on it. These are much better recordings than you can buy in the store."

With mail costs rising rapidly, the custom subscription plan is an effort to stem "a lot of records running back and forth in mail," Stewart says, contrasting his operation with more conventional record clubs, which experience a lot of mailing charges with returned records.

Some series just never catch the public's fancy, like "American Musicals." "Not a very successful series," Stewart says. "People like certain shows. We sold it by composers and that was a mistake. We probably should have sold it by stars and shows, but there were certain shows we couldn't get."

The "Metropolitan" series, done in conjunction with the opera house's 100th anniversary, was a joint venture, produced in Washington from a repertoire worked out with the Met's James Levine.

"Giants of Jazz" was "probably the single most expensively researched, written and produced series we've ever done," Stewart says, "but people were expecting the big songs: what they got was some songs they had never heard of before, so I think they were disappointed. They were collectors' songs. We sold about a million sets, but from our point of view it wasn't the kind of profitable venture that we want."

Two years in preparation, the "Legendary Singers" series -- Como, Sinatra, Cole, et al -- was drawn from an extensive survey conducted by Time-Life. "This series represents precisely what the customers want to see," Stewart says. "We also used public opinion on the 'Big Bands' and have now backed that research up with statistical facts by how well people bought those albums."

" 'Big Bands,' which helped shape 'Legendary Singers,' did phenomenally well for us. We extended it to 25 albums: that's a lot of big band music, but people are very, very loyal and they're terrific customers. We're doing a second Miller set in midsummer -- 'Major Glenn Miller,' his war years. I think that will be enormous."

As for the future, Stewart and Time-Life are looking at further anthologizing of the American Sound, possibly including rock and rhythm & blues. A coventure with Rolling Stone magazine was on the drawing board several years ago, but never came to fruition. And with the audiophile sensibility holding sway, there's the world of compact discs to make history sound even better.

"I'm looking forward to CDs," says Stewart. "I think they feature somewhat the same characteristics that cassettes do: they're easy to store, they're convenient for the customer, they're permanent. I think CDs will help us enormously in the marketing of these collections."