UNITED STATES

                    SECURITIES AND EXCHANGE COMMISSION

                         Washington, D.C. 20549

                                FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 1999

OR

(  ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
					
For the transition period from  _______ to _______

Commission File Number 000-27852

PLATINUM ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)

			       Delaware			36-3802328
                   (State or other jurisdiction of       (I.R.S. Employer
              incorporation or organization)                Identification No.)
				
2001 Butterfield Road
Downers Grove, Illinois 60515
(Address of principal executive offices, including zip code)

(630) 769-0033
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes     [X]          No  [ ]


Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:

6,847,161 Common Stock, par value $.001 per share, at May 14, 1999.
<PAGE>


                       PLATINUM ENTERTAINMENT, INC.
                                FORM 10-Q
                   FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
                             TABLE OF CONTENTS

                                                                         Page

                      Part I - FINANCIAL INFORMATION

Item 1.	Consolidated Balance Sheets March 31, 1999 (Unaudited)
        and December 31, 1998                                             3

(Unaudited) Consolidated Statements of Operations for the three months ended
March 31, 1999 and 1998                                                   4

(Unaudited) Consolidated Statements of Cash Flows for the three months ended
March 31, 1999 and 1998                                                   5
	
Notes to Unaudited Consolidated Financial Statements                      6

Item 2. Management's Discussion and Analysis of Financial Condition
        and Results of Operations                                         9

Item 3. Quantitative and Qualitative Disclosures about Market Risk       16


                       Part II - OTHER INFORMATION

Item 1. Legal Proceedings                                                16

Item 2. Changes in Securities and Use of Proceeds                        17

Item 6.   Exhibits and Reports on Form 8-K                               17

Signatures                                                               18

Exhibits								
<PAGE>
<TABLE>

                     PART I  FINANCIAL INFORMATION
                     Item 1.  Financial Statements.

                     Platinum Entertainment, Inc.

Consolidated Balance Sheets
(In thousands, except share and per share amounts)
<CAPTION>


                                                March 31         December 31
                                                1999             1998
Assets                                          ____________________________
                                                (Unaudited)
<S>                                             <C>              <C>
Current assets:


Cash                                            $       21       $       12
Accounts receivable, net                             6,272            5,647
Artist advances, net                                 3,104            1,899
Inventories, net                                     6,640            7,036
Other receivable                                         -            2,500
Other                                                2,724            1,986
                                                ___________________________   
Total current assets                                18,761           19,080



Investments                                            750              750
Property and equipment, net                          2,479            2,461
Recorded music costs, net                            1,208            1,251
Music catalog, net                                  21,082           21,314
Music publishing rights, net                         2,988            3,026
Goodwill, net                                        5,549            5,610
Deferred financing costs, net                          239              253
Equity investment in joint venture                   2,167            2,205
Other                                                1,076            1,028
                                                ____________________________
Total assets                                       $56,299          $56,978
                                                =============================



Liabilities and stockholders' equity


Current liabilities:


Revolving line of credit                           $34,375          $33,965
Accounts payable                                     8,641            6,452
Accrued liabilities and other                        2,261            3,233
Royalties payable                                    5,919            5,410
                                                  ___________________________
Total current liabilities                           51,196           49,060
Stockholders' equity:


Preferred stock:


Preferred Stock ($.001 par value); 10,000,000
shares authorized:                                       -                -

Series B, Convertible Preferred Stock, 20,000 shares 
issued and outstanding                                   -                -

Series C, Convertible Preferred Stock, 2,500 shares 
issued and outstanding                                   -                -

Common stock:


Common Stock ($.001 par value); 40,000,000 shares
authorized,6,904,671 and 6,626,099 shares issued,
and 6,700,590 and 6,626,099 shares outstanding,
respectively                                             7                7

Additional paid-in capital                          71,082           71,378
Accumulated deficit                                (65,986)         (63,467)
                                                  ___________________________
Stockholders' equity                                 5,103            7,918
                                                  ___________________________
Total liabilities and stockholders' equity         $56,299          $56,978
                                                  ===========================
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>

                       Platinum Entertainment, Inc.

                    Consolidated Statements of Operations
             (In thousands, except share and per share amounts)
<CAPTION>




                                                    Quarter ended March 31

                                                    1999          1998
                                                    _______________________
                                                         (Unaudited)

<S>                                                 <C>          <C>
Gross product sales                                  $12,358      $13,665
Less:  Returns                                        (2,712)      (1,423)
Less:  Discounts                                        (577)        (605)
                                                    ______________________
Net product sales                                      9,069       11,637
Licensing, publishing and other revenues                 161          350
                                                    ______________________
Net revenues                                           9,230       11,987
Cost of sales                                          5,181        7,604
                                                    ______________________
Gross profit                                           4,049        4,383



Other operating expenses: 

Selling, general and administrative                    4,299        3,620
Depreciation and amortization                            651          495
                                                    ________________________
                                                       4,950        4,115
                                                    ________________________
Operating loss                                          (901)         268
Interest income                                            -           19
Interest expense                                        (660)        (568)
Other financing costs                                    (33)         (71)
Equity gain (loss)                                       (38)         170
                                                    ________________________
Net loss                                              (1,632)        (182)
Less:  Preferred dividend requirements                  (886)        (675)
                                                    _______________________
Loss applicable to common shares                    $ (2,518)    $   (857)
                                                    =======================






Basic and diluted loss per common share             $  (0.37)  $    (0.16)



Weighted-average number of common shares 
outstanding                                        6,715,511    5,275,040
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>

                      Platinum Entertainment, Inc.

                   Consolidated Statements of Cash Flows
                              (In Thousands)
<CAPTION>





                                                     Quarter ended March 31
                                                     1999          1998
                                                     ______________________
                                                           (Unaudited)
<S>                                                  <C>          <C>
Operating activities


Net loss                                             $(1,632)       $(182)
Adjustments to reconcile net loss to net cash used in 
operating activities: 

Provision for future returns                           2,712        1,423
Provision for unrecoupable artist balances                22          473
Depreciation                                             230           95
Amortization                                             421          400
Deferred financing costs                                  33           70
Equity (gain) loss from joint venture                     38         (170)
Litigation settlement, net                            (1,185)           -
Changes in operating assets and liabilities:                             


Accounts receivable                                   (3,337)      (3,707)
Inventories                                              396          926
Artist advances                                       (1,227)      (1,283)
Recorded music costs                                     (46)         (28)
Accounts payable                                       2,189           11
Accrued liabilities and other                           (972)        (962)
Royalties payable                                        509        1,635
Other                                                   (808)         358
                                                    _________________________
Net cash used in operating activities                 (2,657)        (941)



Investing activities 

Acquisitions                                               -         (150)
Purchases of property and equipment                     (244)        (229)
                                                    _________________________
Net cash used in investing activities                   (244)        (379)



Financing activities


Net proceeds from revolving line of credit               410        1,400
Proceeds from sale of Common Stock                     2,500            -
Other                                                      -          (76)
                                                    _________________________
Net cash provided by financing activities              2,910        1,324
                                                    _________________________
Net increase in cash                                       9            4
Cash and cash equivalents, beginning of period            12           11
                                                    _________________________
Cash and cash equivalents, end of period            $     21      $    15
                                                    =========================


<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>

                         Platinum Entertainment, Inc.
 
                     Notes to Consolidated Financial Statements
                   (In thousands, except share and per share amounts)


1.	Basis of Presentation

The financial statements included herein are unaudited and have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and Securities and Exchange Commission regulations.  In the
opinion of management, the financial statements reflect all adjustments (of a
normal and recurring nature) which are necessary to present fairly the
financial position, results of operations and cash flows for the interim
periods presented.  These financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto for the
year ended December 31, 1998 of Platinum Entertainment, Inc. included in the
Annual Report on Form 10-K filed with the Securities and Exchange Commission on
April 15, 1999.  The interim results presented are not necessarily indicative of
the results that may be expected for the year ending December 31, 1999.

We have incurred significant net losses and negative cash flows from
operations since our inception, including a net loss of $1,632
($2,518 after preferred dividend requirements) and negative cash flows from
operations of $2,657 in the first quarter of 1999.  We have historically
sustained net losses and negative cash flows, in part due to the high costs
associated with the establishment and expansion of our activities.

Historically, we have funded our operations and other activities from a variety
of capital sources,including debt and equity financing.   We have continued to
obtain equity financing from time-to-time.  On December 31, 1998, a private
placement of our Common Stock occurred, providing proceeds of $2,500 in
January 1999.

We have formulated plans and instituted specific measures which we believe will
improve cash flows and liquidity and enable us to continue in existence without
a significant curtailment of operations.

* We established a fiscal 1999 business plan and adopted a fiscal 1999 budget
  which includes, among other things, (i) a focus on the efficiency of internal
  operations, (ii) implementation of procedures to reduce costs and improve
  margins, (iii) the addition of new releases in a variety of genres and (iv)
  the hiring of experienced music industry executives to supplement the efforts
  of management.  

* On April 15, 1999, we issued shares of a new series of preferred stock and
  warrants to purchase shares of our Common Stock to one of our executive
  officers and a director and certain other members of our Board of Directors,
  providing net proceeds of approximately $3,900 (see "Note 7").

In addition to the equity placements described above, we may need additional
equity financing in order to achieve our fiscal 1999 plan.  While we have been
successful in the past in raising equity as needed, there can be no assurance
that additional equity financing may be available on satisfactory terms, if
at all.  Also, while we believe that our fiscal 1999 plans, if achieved, will
enable us to comply with the financial covenants in the amended debt agreement
with our lending bank, if some or all of our plans do not materialize, we may
be in violation of the financial covenants.   In this case, we may require
additional funds to operate and such funds may not be available on
satisfactory terms, if at all.  Failure to raise needed fundings on favorable
terms could have a material adverse effect on our business.  Our plans for
fiscal 1999 and beyond are subject to uncertainties, many of which are beyond
our control, such as general economic conditions and competitive factors, and
actual results may vary significantly from our plans.  The financial statements
and related notes included elsewhere herein do not include any adjustments
which might result from the outcome of this uncertainty.
<PAGE>

2. Reclassification

Certain prior period amounts in the financial statements have been reclassified
to conform with the current period presentation.

Effective with the third quarter of 1998, we changed our method for reporting
product returns in the statement of operations and balance sheet.  While there
is no impact on gross margins for operations previously reported, a
reclassification between returns and cost of sales in the statement of
operations has been made to prior period amounts to reflect returns activity
consistently with our current reporting practices.  In addition, inventory and
royalties payable, as impacted by returned product, have been restated from
amounts previously reported on the balance sheet.

3.	Basic and Diluted Loss Per Common Share

Basic loss per common share is based upon the net loss applicable to common
shares after preferred dividend requirements and upon the weighted-average
number of common shares outstanding during the period.  Diluted loss per common
share adjusts for the effect of convertible securities, stock options and
warrants only in the periods presented in which such effect would have been
dilutive.  The total of such securities at March 31, 1999, was 10,704,335.
Such effect was not dilutive in any of the periods presented herein.

4.	Debt

During July 1998, we entered a credit agreement with First Source Financial,
Inc. (First Source) for a $35,000 revolving line of credit.  Our First Source
facility has a five year term, bears interest at the bank's base rate plus 1.5%
per annum (9.25% at March 31, 1999) and includes a LIBOR option of LIBOR plus 3
% per annum (8.1875% at March 31, 1999).  Borrowings under our First Source
facility are limited to the Borrowing Base, as defined, which is based upon
eligible accounts receivable, inventory and music catalog.  Our First Source
facility contains certain financial covenants, requires a lockbox arrangement
and is secured by substantially all of our assets.  Because the facility
contains a subjective acceleration clause, the entire balance is classified as
current in the balance sheet.  The First Source agreement was amended during
April 1999, providing for revised financial covenants through December 31,
1999.  In connection with the amendment, the bank required a $60 fee, which was
paid in shares of our Common Stock on April 14, 1999.


5.	Preferred Dividend Requirements

On February 28, 1999, the Series B Convertible Preferred Stock accrued a
dividend of $788 and the Series C Convertible Preferred Stock accrued a dividend
of $98.  On February 28, 1998, the Series B Convertible Preferred Stock accrued
a dividend of $600 and the Series C Convertible Preferred Stock accrued a
dividend of $75.  The dividends reflect a compounding per annum rate of 14%
(effective December 1998; prior to such date the per annum rate was 12%) of the
initial costs of the Series B Convertible Preferred Stock and Series C
Convertible Preferred Stock. 
<PAGE>

6.	Litigation Settlement

On March 31, 1999, we settled our pending litigation with JCSHO, Inc. entitled
JCSHO, Inc. f/k/a Intersound, Inc. v. Platinum Entertainment, Inc., (D. Minn.).
The parties determined that JSCHO would retain 306,122 shares (60%) of the
510,203 shares of our Common Stock issued to JCSHO in connection with our
acquisition of Intersound in 1997 which were held in escrow pending resolution
of this litigation and that JSCHO would return 204,081 shares (40%) to us.  We
also agreed to issue Donald R. Johnson, a shareholder and former employee of
Intersound, Inc., 20,000 shares of our Common Stock.  The settlement results in
a reversal of charges previously expensed by us in connection with the acquired
assets and assumed liabilities of Intersound, Inc. and the recognition of a gain
of $1,185.  This amount is included as an offset to our operating expenses in
the statement of operations for the first quarter of 1999.

7.	Subsequent Event

On April 15, 1999, we issued and sold an aggregate of 3,938 shares of Series D
Convertible Preferred Stock and warrants (the Series D Warrants) to purchase
an aggregate of 794,163 shares of Common Stock to Steven Devick, one of our
executive officers and a director, and Craig J. Duchossois and Andrew Filipowski
, each members of our Board of Directors.  The terms of the Series D Convertible
Preferred Stock and Series D Warrants were determined on April 9, 1999,
pursuant to approval be the Board of Directors on such date.  We received $3,938
in gross consideration in connection with this private placement.  We also paid
an aggregate of $29 to Mr. Duchossois and Mr. Filipowski as a related
transaction fee.  The Series D Convertible Preferred Stock accrues dividends
compounded at an annual rate of 12% for the first year, 14% for the second year,
16% for the third year, 18% for the fourth and fifth years and 20% at all times
thereafter, of the purchase price of the Series D Convertible Preferred Stock,
in preference to any dividends on any other class of capital stock.  The Series
D Convertible Preferred Stock is junior to the Series B Convertible Preferred
Stock and the Series C Convertible Preferred Stock with respect to the right
to receive dividends and to participate in any distribution of assets other
than by way of dividends.  The Series D Convertible Preferred Stock is
redeemable by us at any time at a price per share equal to the purchase price
paid by the purchasers thereof plus accrued and unpaid dividends.  The Series D
Convertible Preferred Stock is convertible, commencing two years from the date
of issue, into shares of Common Stock at $7.00 per share, which is equal to the
closing trading price of the Common Stock on April 9, 1999.

The Series D Warrants do not accrete.  However, if the Series D Convertible
Preferred Stock is redeemed in full during the twelve month period following the
issuance of the Series D Warrants, the holders of the Series D Warrants are
required to return 1% of the Series D Warrants (or Common Stock representing
shares received upon exercise of the Series D Warrants), determined on a pro
rata basis, for each month remaining in such twelve month period; provided,
however, that the holders of the Series D Warrants are not required to return
more than 12% of the aggregate number of Series D Warrants originally issued.
The Common Stock underlying the Series D Warrants may be purchased at an
exercise price per share of $6.126, which is equal to the average of the
closing trading price of the Common Stock for the trailing 30 consecutive
trading days commencing April 9, 1999.

<PAGE>



Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

The information in this section should be read together with the consolidated
financial statements and related notes contained elsewhere herein.

Overview

Our primary business is the production, distribution, marketing and sale of
music. Our pre-recorded music products include new releases, typically by
established artists, as well as compilations featuring various artists and
repackagings of previously recorded music from our master music catalog and
under licenses from third party record companies.   We sell music products,
including compact discs, tape cassettes and digital versatile discs (DVDs)
mainly to retailers and wholesalers primarily in the United States.  We
currently release music in a variety of genres including classical, urban, adult
contemporary,blues, gospel and country and on our Intersound Classical,
Platinum, River North, House of Blues, CGI Platinum and Platinum Nashville
labels. Our headquarters are located in Downers Grove, Illinois, our
primary distribution facility is located in Roswell, Georgia, and we have a
promotional office in Nashville,Tennessee.

We distribute our products through a multi-channel system comprised of (i)
Platinum Distribution, our proprietary distribution system, (ii) Universal
Music and Video Distribution (Universal), our third party, major label
distributor, (iii) internationally, primarily through licensing agreements as
well as production and distribution agreements on a territory-by-territory
basis and (iv) Internet distribution.  We are increasing the volume of
products distributed through Platinum Distribution compared to Universal;
this results in reduced incremental costs per record sold, due to the lack of
a third party distribution fee.  Our gross revenues through Universal were
$2,089,000 and $4,616,000 for the first quarter of 1999 and 1998, respectively,
reflecting a 55% decrease.  Management believes that this decrease is related
to the acquisition by Universal of our former third party, major label
distributor, PolyGram Group Distribution, during the summer of 1998.  This
decrease was offset by increased sales volume through Platinum Distribution.
Gross revenues through Platinum Distribution were $9,951,000 and $6,808,000 for
the first quarter of 1999 and 1998, respectively, reflecting a 46% increase.

While we have historically distributed records for a limited number of outside
labels, it is our strategy to increase the volume of outside labels we
distribute in order to generate additional revenues and to expand our Platinum
Distribution system.  Under these arrangements, we generate a distribution fee
of approximately 20% to 30%, depending on the volume and range of services
provided.  The gross margin from these sales ranges from a low of 6% (for third
party product distributed by Universal to which we owe a distribution fee) to
27% (for product distributed through our proprietary systems).  These
activities represented 10% of our gross revenues in the first quarter of 1999,
as compared to 5% in the first quarter of 1998.  We believe that increasing the
volume of products distributed for select third parties will contribute
significantly to offsetting the fixed costs of maintaining Platinum
Distribution as well as provide incremental revenue and income.  We intend to
pursue additional third party distribution opportunities in the future. 

We distribute via the Internet through our website, www.PlatinumCD.com, and our
equity investment and revenue sharing arrangement with musicmaker.com, Inc.
(musicmaker.com), the first and largest digital download and "burn and mail"
company.  Through musicmaker.com our customers can create custom compilation
CDs or download songs onto the hard drive of their own computers using Liquid
Audio and Secure-MP3, two downloading formats used to protect the copyrights of
the record label and the recording artist.  We also are an affiliate with
Amazon.com, a leader in the Internet commerce industry, to provide customers who
visit our website access to hundreds of thousands of commercially available
titles.
<PAGE>

On March 31, 1999, we settled our pending litigation with JCSHO, Inc. entitled
JCSHO, Inc. f/k/a Intersound, Inc. v. Platinum Entertainment, Inc., (D. Minn.).
The parties determined that JSCHO would retain 306,122 shares (60%) of the
510,203 shares of our Common Stock issued to JCSHO in connection with our
acquisition of Intersound in 1997 which were held in escrow pending resolution
of this litigation and that JSCHO would return 204,081 shares (40%) to us.  We
also agreed to issue Donald R. Johnson, a shareholder and former employee of
Intersound, Inc., 20,000 shares of our Common Stock.  The settlement results in
a reversal of charges previously expensed by us in connection with the acquired
assets and assumed liabilities of Intersound, Inc. and the recognition of a gain
of $1,185,000.  This amount is included as an offset to our operating expenses
in the statement of operations for the first quarter of 1999.

Product sales are recognized upon shipment.  In accordance with industry
practice, our music products are sold on a returnable basis.  Our allowance for
future returns is based upon our historical returns, SoundScan data, and the
return rate of Universal.  Our returns as a percentage of gross revenues were
22% and 10% for the first quarter of 1999 and 1998, respectively.  The return
rate for the first quarter of 1998 was unusually low; the return rate for the
first quarter of 1999 approximates our overall 1998 return rate and we believe
the current period return rate approximates our anticipated future returns.  It
is our policy to inventory all returned product and resell such product at
market value.

We have historically sustained losses and negative operating cash flows, in part
due to the high costs associated with the establishment and expansion of our
activities.  We require significant recurring funds for artist and repertoire
(A&R) expenses, which include recorded music costs.  We make substantial
payments each year for recording costs and advances to artists and producers in
order to maintain and enhance our artist roster. Advances to established artists
and producers and direct costs associated with the creation of record masters
are capitalized and are charged to cost of sales as the related albums earn
revenues or when the amounts are determined to be unrecoverable.  See
"Liquidity and Capital Resources" following.


<PAGE>

Results of Operations

Effective with the third quarter of 1998, we changed our method for reporting
product returns in the statements of operations and balance sheet.  While there
is no impact on gross margins for operations previously reported, a
reclassification between returns and cost of sales in the statements of
operations has been made to prior period amounts to reflect returns activity
consistently with our current reporting practices.  

The following table sets forth for the periods indicated the percentage of gross
revenues represented by certain items included in our "Consolidated Statements
of Operations."  Operating performance for any period is not necessarily
indicative of performance for any future periods.
<TABLE>
                    
                                          Quarter ended    
                                          March 31                  
                                          1999        1998
<CAPTION>
                                         __________________
<S>                                      <C>          <C>
Gross revenues
    Platinum labels                       89%         93% 
    Distributed labels                    10%          5% 
    Licensing, publishing and other        1%          2% 
                                        __________________
    Total gross revenues                 100%        100% 
Less: Returns                            -22%        -10% 
Less: Discounts                           -5%         -4%
                                        __________________ 
Net revenues                              73%         86% 
Cost of sales                             41%         54%
                                        __________________ 
Gross profit                              32%         32% 
Other operating expenses:					
Selling, general and administrative       34%         26% 
Depreciation and amortization               5%         4%
                                         __________________ 
                                           39%        30%
                                         __________________ 
Operating income (loss)                    -7%         2% 
Interest expense                           -5%        -4% 
Other financing costs                      -          -1% 
Equity gain (loss)                           -        1%
                                        ___________________ 
Net loss                                  -12%        -2% 
Less:  Preferred dividend requirements     -7%         -5%
                                        ___________________ 
Loss applicable to common shares			-19%		-7%
                                           =============== 
</TABLE>                 
					




Gross Revenues.  Gross revenues decreased $1,496,000 or 11% to $12,519,000 for
the first quarter of 1999, compared to the first quarter of 1998.  Gross
revenues through Universal were down $2,527,000 or 55% in the first quarter of
1999 compared to the first quarter of 1998.  Management believes that this
decrease is related to the acquisition by Universal of our former third party,
major label distributor,PolyGram Group Distribution, during the summer of 1998.
This decrease was offset by increased sales through our own distribution system,
particularly in the classical genre and third-party release. Gross revenues
through Platinum Distribution were $9,951,000 and $6,808,000 for the first
quarter of 1999 and 1998, respectively, reflecting a 46% increase.  The first
quarter of 1999 included the initial shipments of Rick Springfield's Karma, the
continued success of T. Graham Brown's Wine into Water, the new gospel
compilation Today's Gospel Music II, the catalog sales of the box set Classical
Music for People Who Hate Classical Music and Crystal Bernard's second release,
Don't Touch Me There.
<PAGE>

Returns.  We record an estimate of future returns at the time product is sold
(see "Overview").
Returns as a percentage of gross revenues were 22% for the first quarter of 1999
, compared to 10% for the
first quarter of 1998.  The return rate for the first quarter of 1998 was
unusually low; the return rate for the
first quarter of 1999 approximates our overall 1998 return rate and we believe
the current period return rate
approximates our anticipated future returns.

Discounts.  Discounts as a percentage of gross revenues increased slightly to 5%
 for the first
quarter of 1999, compared to 4% for the first quarter of 1998. 

Cost of Sales.  Cost of sales as a percentage of gross revenues decreased to 41%
 for the first
quarter of 1999, from 54% for the first quarter of 1998.  The decrease resulted
from increased proprietary
and third party distribution through Platinum Distribution compared to Universal
, for which we are charged
a distribution fee.  In addition, a larger portion of our first quarter 1999
sales were in the classical genre as
compared to the first quarter of 1998; classical sales typically have a lower
artist royalty rate than our other
genres.

Gross Profit.  Gross profit decreased $334,000 or 8% to $4,049,000 for the first
 quarter of 1999, compared to $4,383,000 for the first quarter of 1998.  As a
 percentage of gross revenues, gross profit remained unchanged at 32%.

Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased $679,000 or 19% to $4,299,000 for the first
quarter of 1999, compared to the first quarter of 1998.  The current period
includes a net gain from litigation settlements of $1,185,000 (see "Overview").
Excluding these settlements, selling, general and administrative expenses
increased 51% from the first quarter of 1998.  As a percentage of gross
revenues, selling, general and administrative expenses increased to 34% in the
first quarter of 1999 from 26% in the first quarter of 1998.  This increase is
primarily attributable to increased promotional spending on our urban releases,
 a genre which management believes requires significant promotional expenditures
  in order for us to capitalize on the opportunities for
significant sales in this genre.  Our adult contemporary releases also involve
higher promotional spending than our other genres.  Our adult contemporary
sales were most impacted by the decline in sales volume through Universal, which
 resulted in a higher expense to revenue ratio.

Operating Loss.  As a result of the factors described above, we incurred an
operating loss of $901,000 for the first quarter of 1999, compared to an
operating gain of $268,000 for the first quarter of 1998.

Interest Expense.  Interest expense for the first quarter of 1999, totaled
$660,000 compared to $568,000 for the first quarter of 1998.  The current period
increase resulted from a higher outstanding line of credit balance than in the
first quarter of 1998.  See "Liquidity and Capital Resources" below for details
of our current debt structures.  

Income Taxes.  No income tax expense or benefit has been recorded through March
31, 1999, due to our net operating loss carryforward and related valuation
allowance, as required under generally accepted accounting principles.
Pursuant to Section 382 of the Internal Revenue Code of 1986, as amended, our
net operating loss carryforward of approximately $57,857,000 at December 31,
1998,
expiring in years 2008 through 2013, is subject to annual limitations due to a
change in ownership as a result of our initial public offering.  Accordingly,
approximately $6,185,000 of the net operating loss carryforward is subject to
an annual limitation of approximately $2,200,000.

Preferred Dividend Requirements.  During the first quarter of 1999, the Series
B and Series C Convertible Preferred Stock outstanding accrued a dividend of
$886,000 (representing a 14% return on investment).  These dividends are
compounding quarterly, and represented a 12% return on investment during 1998.
<PAGE>

Loss Applicable to Common Shares.  The loss applicable to common shares for the
 first quarter of 1999, totaled $2,518,000, including preferred dividend
 requirements of $886,000, compared to a loss applicable to common shares of
 $857,000, including preferred dividend requirements of $675,000, for the
first quarter of 1998.  

Fluctuations in Our Quarterly Operating Results and Seasonality

Our results of operations are subject to seasonal variations.  In particular,
our revenues and operating income are affected by end-of-the-year holiday sales.
  In accordance with industry practice, we record product sales when products
  are shipped to retailers.  In anticipation of holiday sales, retailers
purchase products from us prior to December.  As a result, our revenues and
operating income typically decline during December, January and February.  In
addition, timing of a new release may materially affect our business, financial
 condition and results of operations.  For example, if releases planned for the
  peak holiday season are delayed, our business, financial results and operating
   results could be materially, adversely affected.

Liquidity and Capital Resources

We have incurred significant net losses and negative cash flows from operations
since our inception, including a net loss of $1,632,000 ($2,518,000 after
preferred dividend requirements) and negative cash flows from operations of
$2,657,000 in the first quarter of 1999.  We have historically sustained net
losses and negative cash flows, in part due to the high costs associated with
the establishment and expansion of our activities.

Historically, we have funded our operations and other activities from a variety
 of capital sources, including debt and equity financing.   We have continued to
  obtain equity financing from time-to-time.  On December 31, 1998, a private
  placement of our Common Stock occurred, providing proceeds of $2,500,000
in January 1999.

We have formulated plans and instituted specific measures which we believe will
 improve cash flows and liquidity and enable us to continue in existence without
  a significant curtailment of operations.

* We established a fiscal 1999 business plan and adopted a fiscal 1999 budget
which includes, among other things, (i) a focus on the efficiency of internal
 operations, (ii) implementation of procedures to reduce costs and improve
 margins, (iii) the addition of new releases in a variety of genres and (iv)
 the hiring of experienced music industry executives to supplement the efforts
  of
management.  

* On April 15, 1999, we issued shares of a new series of preferred stock and
warrants to purchase shares of our Common Stock to one of our executive officer
s and a director and certain other members of our Board of Directors, providing
 net proceeds of approximately $3,900,000 (see "Note 7" in the notes to the
 consolidated financial statements).

In addition to the equity placements described above, we may need additional
equity financing in order to achieve our fiscal 1999 plan.  While we have been
 successful in the past in raising equity as needed, there can be no assurance
  that additional equity financing may be available on satisfactory terms, if
at all.  Also, while we believe that our fiscal 1999 plans, if achieved, will
enable us to comply with the financial covenants in the amended debt agreement
with our lending bank, if some or all of our plans do not materialize, we may
be in violation of the financial covenants.   In this case, we may require
additional funds to operate and such funds may not be available on satisfactory
 terms, if at all.  Failure to raise needed fundings on favorable terms could
 have a material adverse effect on our business.  Our plans for fiscal 1999
 and beyond are subject to uncertainties, many of which are beyond our control,
  such as general economic conditions and competitive factors, and actual
  results may vary significantly from our plans.  The financial statements and
  related notes included elsewhere herein do not include any adjustments which
  might result
from the outcome of this uncertainty.
<PAGE>

During the first quarter of 1999, we experienced negative cash flow from
operations of $2,657,000.  This resulted from continued operating losses and
approximately $1,273,000 of new project funding.  Investing activities for
the quarter totaled $244,000, related to capital expenditure.  Operating and
investing activities were funded from operations, our line of credit with First
 Source Financial, Inc. and proceeds of $2,500,000 from a private placement of
 our Common Stock.

During the first quarter of 1998, we experienced negative cash flow from
operations of $1,609,000.  This resulted from continued operating losses and
approximately $1,311,000 of new project funding.  Investing activities for the
 period totaled $379,000, related to capital expenditures and the purchase of
 a classical catalog.  Operating and investing activities were funded from
 operations and our then-outstanding banking line of credit.

We require significant recurring funds for A&R expenses, which include recorded
 music costs.  We make substantial payments each period for recording costs and
 advances to artists and producers in order to maintain and enhance our artist
 roster.  Advances to established artists and producers and direct costs
 associated with the creation of record masters are capitalized and are charged
  to cost of sales as the related albums earn revenues or when the amounts are
  determined to be unrecoverable.  Royalties are not paid to the artist until
  all advances made to the artist have been recouped by us.  Also, we establish
   and maintain reserves relative to royalty payments for a period of 18 to 24
   months to allow for product returns activity, as royalties are not owed on
   returned product.

During July 1998, we entered a credit agreement with First Source Financial,
Inc. (First Source) for a $35,000,000 revolving line of credit.  Our First
Source facility has a five year term, bears interest at the bank's base rate
 plus 1.5% per annum (9.25% at March 31, 1999) and includes a LIBOR option of
  LIBOR plus 3% per annum (8.1875% at March 31, 1999).  Borrowings under our
  First Source facility are limited to the Borrowing Base, as defined, which
   is based upon eligible accounts receivable, inventory and music catalog.
    Our First Source facility contains certain financial covenants, requires a
     lockbox arrangement and is secured by substantially all of our assets.
     Because the facility contains a subjective acceleration clause, the entire
      balance is classified as current in the balance sheet. The First Source
      agreement was amended during April 1999, providing for revised financial
       covenants through December 31, 1999.  In connection with the amendment,
        the bank required a $60,000 fee, which was paid in shares of our Common
         Stock on April 14, 1999.
		
Stockholders' equity at March 31, 1999, totaled $5,103,000 compared to
$7,918,000 at December 31, 1998.  This net decrease of $2,815,000 or 36% is
primarily due to continued operating net losses and the redemption of shares
of our Common Stock in connection with a certain litigation settlement (see
"Part II " Other Information, Item 1. Legal Proceedings").

Our near and long-term capital requirements will depend on numerous factors,
including the rate at which we grow and acquire new artists and products.
We have various on-going needs for capital, including working capital for
operations, artist advances and recorded music costs, and capital expenditures
to maintain and expand our operations.  In addition, as part of our strategy,
we evaluate potential acquisitions of music catalogs, publishing rights and
labels.  We may in the future consummate acquisitions which may require us to
make additional capital expenditures, and such expenditures may be significant.
Future acquisitions, as well as other on-going capital needs, may be funded with
 institutional financing, seller financing and/or additional equity or debt
 offerings.  We currently do not have any material commitments for capital
 expenditures for the next twelve months.

Inflation

The impact of inflation on our operating results has been moderate in recent
years, reflecting generally lower rates of inflation in the economy.  While
inflation has not had a material impact on operating results, there is no
assurance that our business will not be affected by inflation in the future.
<PAGE>

Year 2000 Risks

Many existing computer programs use only two digits (rather than four) to
identify a year in the date field.  These programs were designed and developed
without considering the impact of the upcoming change in the century.  If not
corrected, many computer applications could fail or create erroneous results

by or at the Year 2000.  

In 1998, we started analyzing, reprogramming and replacing our computer systems
to address the Year 2000 problem.  We have completed a significant portion of
the reprogramming, replacing and testing, but have not yet completed our
review of the significant software and equipment used in our business operations
and the operations of our key business partners.  Until these reviews are
complete, we cannot be sure that our efforts to address Year 2000 issues are
appropriate, adequate or complete.

Based on our current assessment of our Year 2000 issues detailed below, we plan
to be Year 2000 compliant by July 31, 1999:

* We are dependent on personal computer systems for internal electronic
information processing.  To bring our systems into Year 2000 compliance we
have spent approximately $250,000 since January 1, 1998, to replace existing
hardware.

* We are currently operating one financial accounting software package that
is Year 2000 compliant.  We intend to either install distribution software
already purchased that is Year 2000 compliant in the near future or, in the
worst case, modify our existing distribution software used in both locations
to be Year 2000 compliant at no material incremental cost.  We have spent
approximately $330,000 on software since January 1, 1998.  We have also paid
 $500,000 in consulting services since January 1, 1998.

* We are currently assessing the state of readiness for Year 2000 of our
material vendors, suppliers, customers and other material third parties.
 We expect to have sent the letters by July 31, 1999.  If any of our material
  vendors, suppliers or customers, particularly Universal, has a serious Year
   2000 problem, we could experience a loss of revenues from their operations
    and/or incur a
significant amount of expenses.      

If we are unable to manage the Year 2000 date change successfully, we may
suffer the following consequences:

* We may experience a significant number of operational inconveniences and
inefficiencies for us and our customers that may divert our time and attention
 and financial and human resources from our ordinary business activities.

* We may suffer serious systems failures that may require significant efforts
by us or our customers to prevent or alleviate material business disruptions.


* We may be in default of a number of agreements, including our credit
agreement, if we fail to respond to our Year 2000 issues in a timely manner.

* We may experience significant loss of revenues or incur a significant amount
 of unanticipated expenses.

* We may incur liability for the losses incurred by our customers or others
where business is disrupted by our system failures or incur significant costs
 of defending claims made against us for the recovery of such losses.
<PAGE>

Safe Harbor Provision

Some of the information in this filing contains forward-looking statements
that involve substantial risks and uncertainties.  You can identify these
statements by forward-looking words such as "anticipate," "believe,"
"estimate" and "expect" or similar words.  You should read statements that
contain these words because they (1) discuss our future expectations, (2)
contain projections of our future results of operations or of our financial
 condition or (3) state other "forward-looking" information.  We believe it
  is important to communicate our expectations to our investors.  There may
   be events in the future, however, that we are
not accurately able to predict or over which we have no control.  A number
of important factors could cause our actual results, performance and
achievements for fiscal 1999 and beyond to differ materially from those
expressed in such forward-looking statements.  Reference is made to our prior
filings with the Securities and Exchange Commission, in particular the "Risk
Factors" section of our Prospectuses dated January 13, 1999, as amended, and
 March 12, 1996, for a discussion of some of these factors.  These risk factors
 include, without limitation, commercial success of our repertoire, risks of
 inadequate financing,charges and costs related to acquisitions, management
 of growth, relationships with artists, producers and licensees, attraction
  and retention of key personnel, general economic and business conditions
  and competition in the recorded music industry.

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk.

The principal market risk (i.e., the risk of loss arising from adverse changes
 in market rates and prices) to which we are exposed is interest rates on debt.


On March 31, 1999, we had $34,375,000 of debt outstanding under a $35,000,000
revolving bank line of credit.  The line of credit expires during July 2003.
 The line of credit bears interest at the bank's base rate plus 1.5% per
 annum (9.25% at March 31, 1999) and includes a LIBOR option of LIBOR pl
 us 3% per annum (8.1875% at March 31, 1999).  At March 31, 1999, the
 portion of the outstanding debt subject to the LIBOR option totaled
 $29,900,000.

We do not hold and have not issued derivative financial instruments for
speculation or trading purposes.

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

On March 31, 1999, we settled our pending litigation with JCSHO, Inc. entitled
JCSHO, Inc. f/k/a Intersound, Inc. v. Platinum Entertainment, Inc., No. 97-2479
MJD/AJB (D. Minn.).  The parties determined that JSCHO would retain 306,122
shares (60%) of the 510,203 shares of our Common Stock issued to JCSHO in
connection with our acquisition of Intersound in 1997 which were held in escrow
pending resolution of this litigation and that JSCHO would return 204,081 shares
(40%) to us.  We also agreed to issue Donald R. Johnson, a shareholder and
former employee of Intersound, Inc., 20,000 shares of our Common Stock.  The
settlement results in a reversal of charges previously expensed by us in
connection with the acquired assets and assumed liabilities of Intersound,
Inc. and the recognition of a gain of $1,185,000 during the first quarter of
1999.  This settlement results in the mutual release of all claims and actions
the parties have or ever had against each other arising from conduct occurring
before March 31,1999, including all claims that were asserted or that could
have been asserted by Donald R. Johnson, a shareholder and former employee of
Intersound, Inc., in the action entitled Donald R. Johnson v. Intersound, Inc.
(Del), f/k/a River North Studios, Inc., No. E-64885, Superior Court in Fulton
County Georgia.  The parties have filed all documents necessary to effectuate
the dismissal with prejudice, and without attorneys' fees and costs, of all
claims asserted in the pending litigation.
<PAGE>

On April 7, 1999, Ichiban Records, Inc. filed a lawsuit in the Superior Court
of Fulton County, State of Georgia, captioned Ichiban Records, Inc. v.
Platinum Entertainment, Inc., Civil Action No. 1999 CV 07215 ("Ichiban Claim"),
seeking termination of its distribution agreement with us and damages in excess
of $10,000,000, for alleged breaches of its distribution agreement by us.
Ichiban Records, Inc. also filed a complaint for injunction and temporary
restraining order and appointment of a receiver under the same caption.
On April 21, 1999, Ichiban Records, Inc. also filed a voluntary petition to
commence a case under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Georgia, Atlanta Division, Case
No. 99-66017.  Further, we removed the Ichiban Claim from the State of Georgia
court to the United States District Court for the Northern District of Georgia,
Atlanta Division,
Case No. 1:99 CV-1113.  The Ichiban Claim will now be asserted through the
bankruptcy action.  We believe the claims of Ichiban Records, Inc. are without
merit and that the matter will be successfully resolved without a material
impact on our financial position or results of operations. We are presently in
discussions with Ichiban Records, Inc. concerning a restructuring of the
distribution relationship between the parties in order to recover advances
and other monies owed by Ichiban Records, Inc. to us.  However, because the
bankruptcy and lawsuit are at early stages, there can be no assurances that
the matter can be resolved in our favor.  A decision adverse to us in this
matter could have a material adverse impact on our financial position and
results of operations.

We are a party in various other lawsuits which have arisen in the normal course
of business.  In the opinion of management, after consultation with legal
counsel, the ultimate outcome of these lawsuits will not have a material
impact on our financial position or results of operations.

Item 2. 	Changes in Securities and Use of Proceeds.

During February 1999, Bank of Montreal exercised in full their warrant to
purchase 235,366 shares of our Common Stock for $.01 per share, resulting in
proceeds of $2,354.

	During March 1999, PPM America Special Investments Fund L.P. exercised in
    full their warrant to purchase 23,206 shares of our Common Stock for $.01
    per share, resulting in proceeds of $232.

	On March 31, 1999, we settled two lawsuits resulting in the issuance of
    20,000 shares of our Common Stock to Donald R. Johnson and the redemption of
 204,081 shares of our Common Stock from JSCHO, Inc.  See "Item 1.
     Legal Proceedings."

These transactions were exempt from registration pursuant to Section 4(2) of
the Securities Act of 1933 as transactions not involving a public offering.

Item 6.  Exhibits and Reports on Form 8-K.

A.  Exhibits.

10.1	Employment Agreement, dated December 15, 1998, between the Registrant
and Brent Gordon.
27.	Financial Data Schedule.

B. Reports on Form 8-K.

None.

<PAGE>

SIGNATURES

	Pursuant to the requirements of the Securities Act of 1933, we certify that
    we have reasonable grounds to believe that we meet all of the requirements
    for filing on Form 10-Q and we have duly caused this Report to be signed on
    our behalf by the undersigned, thereunto duly authorized, in the City of
    Downers
Grove, State of Illinois, on May 17, 1999.

						Platinum Entertainment, Inc.

						By: /s/STEVEN DEVICK			
						      Steven Devick
						      Chairman, President and Chief Executive Officer

                           /s/DOUGLAS C. LAUX   
						      Douglas C. Laux
                              Chief Operating Officer, Chief Financial Officer 
                              and Director




































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