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Apple's (NASDAQ:AAPL) Steve Jobs is encouraging the music labels to sell their digital music without any protection at all. If the labels stopped wrapping the music with DRM, then Jobs said he would "switch to selling only DRM-free music on our iTunes store."

Basically, Jobs is calling for interoperability utopia. And, the only way to get there is to stop protecting the music.

Stop protecting music? Won't that increase piracy? Well, actually not really. And, Jobs makes a great point.

First off, a lot of piracy happens when people take a CD and share that with 100 of their best friends, who in turn share that with their 100 best friends. I've heard enough teenagers talk about how they have a library of 15,000 songs, but only paid for 1 CD in their entire life.

Secondly, Jobs has a point. The reason for his challenge is because dropping DRM might accelerate the market for legal digital music sales. Just think about how prohibitive it is to use your gadgets or services because they don't work with each other. If I could download my songs stored on iTunes onto a new Microsoft Zune or Sony player, or if I had a Napster account and I could download those songs onto my iPod -- well, life might be easier.

Now, the record labels think that if the digital music market explodes, then the end of CD sales would be here sooner rather than later. Rich Greenfield of Pali Research puts it this way: "Dropping DRM would speed the digital adoption process but hasten the decline of CDs.. But the only chance of ending interoperability is to give up DRM."

Obviously, Greenfield agrees with Jobs. But here's another reason why Jobs has a point, which also goes back to my comment about piracy from that one CD. Greenfield says, "As long as you allow one copy that doesn't have DRM - in any context -- you won't stop piracy." True. So, what he's saying is why save the CD business - even though it still account for 85% of the music industry - when the ultimate demise of it might actually help out in the long run.

Here's what ace attorney Fred von Lohmann of Electronic Frontier Foundation had to say:
"It's exactly as Jobs says -- the major labels could solve all the interoperability headaches today by simply dropping their demand for DRM on music. It's not as though the DRM is doing the major labels any good in a world where they continue to sell millions of unprotected CDs and iTunes permits fans to burn protected downloads onto unprotected CD-Rs."

Source: Steve Jobs Calls for Interoperability Utopia