Apple is back in talks again with the major labels Sony BMG, Warner and Universal about offering their music without DRM.  According to c|net, it is still in the early stages yet with no deals finalised, although there are rumours going around that Sony is getting close to an agreement.  Back in February 2007, Apple's chief executive Steve Jobs called upon the 4 major record labels to drop their requirement for copy protection (DRM) on digital music downloads, but ever since EMI allowed Apple to unlock its music two months later, no other label followed suit.  Instead, to try showing their frustration with Apple's price fixing and tackle its overwhelming market share, all four major labels have already made deals with Amazon, Napster, Zune and several others to allow them to sell music in the popular DRM-free MP3 format. 

If Apple succeeds in its deals, this will bring good news to iTunes music customers, but may turn out to be a serious blow to competing music download stores that rely on DRM-free music to compete with iTunes.  If iTunes goes DRM-free with all 4 major labels, other music stores would need to come up with some way of showing consumers why they are better than iTunes. 

Unfortunately, unlimited download subscription services have turned to be unsuccessful, due to much tighter usage restrictions on songs and DRM-incompatibility with the iPod and iPhone.  The closest any unlimited download subscription service has got to unlock some restrictions is Zune's latest move to let subscribers download 10 DRM-free songs per month to permanently keep, but even this is of little use to anyone without a Zune as only these DRM-free songs will play on anything other than the Zune and PC.

On the other hand, even if iTunes goes totally DRM free for music, Apple will likely continue offering its music in the unprotected AAC (M4A) format like it currently does for EMI, which is incompatible with the MP3 format and thus is not compatible with many MP3 players.  So the other music stores can still advertise the MP3 format as a small competitive over iTunes, since AAC encoded music needs to be re-encoded into MP3 to play on MP3 players not compatible with AAC and the conversion process also affects the sound quality.

For iTunes customers that have already built up a large collection of songs, this news may not be of much benefit to them, as like most other music download services that went DRM-free, it is unlikely that Apple will allow customers to exchange existing protected songs with DRM-free versions without paying for them again.  Of course there is the loophole where owners can burn their music as Audio CDs and re-rip them into a format compatible with another music player brand, but this can be a very tedious process for a large collection and like converting AAC to MP3, this also affects the sound quality.