Another dispatch from the It-couldn’t-have-happened-to-a-nicer-group-of-people Desk:

Billboard ($) reports that Wal-Mart is proposing a humiliating price reduction on CDs to the majors. The company wants to make CD prices come in at one of five round figures, Ed Christmas writes:

According to sources, the Wal-Mart proposal would allow for a promotional program that could comprise the top 15-20 hottest titles, each at $10. The rest of the pricing structure, according to several music executives who spoke with Billboard, would have front-line hits and current titles retailing for $12, top catalog at $9, midline catalog at $7 and budget product at $5.

The story doesn’t say it, but the move is similar to what the retailer has been doing to myriad other of its suppliers. Still there is something pathetic about the once-mighty record industry being dictated to in this fashion. Was it really just a decade ago that the majors were jacking up the retail price of CDs a buck anytime they had a new superstar release?

At the same time, the company is obviously seeing an enormous dropoff in volume (physical CD sales are down almost 20 percent from last year in the first two months of 2008) and, one assumes, a softening of the loss-leader effect CDs have had for it and other big box stores.

The story says that, in raw wholesale terms, Wal-Mart is asking for reductions ranging from 25 to almost 30 percent, depending on the particular tier. The company sells about 22 percent of the CDs in America, Christman says.

The story says at this point it is a proposal; it’s unclear what the company will do if the majors don’t go along. Christman: “[One executive] says, ‘This sounds like the Hail Mary pass and if it doesn’t work, they could be out of the music business; or maybe they reduce music down to a couple of racks’ from the 4,000 titles carried by Wal-Marts with larger selections.”

Emphasis added.