The major music labels are so concerned about Apple’s dominance in the world of digital music that they are betting their future on Napster.

The major labels have teamed up with Napster to offer what they are calling “the world’s largest and most comprehensive MP3 store.”

Yep – the labels are so intent on breaking Apple’s dominance in the world of digital music that they are giving Napster – the brand that RIAA head Hilary Rosen once called “both morally and legally wrong” – the opportunity to distribute more music as MP3 than Apple.

Per Napster’s announcement:

Napster’s download store is more than 50% larger than any other MP3 store and boasts not only the largest major label MP3 catalog in the industry, but also the largest library of independent music available anywhere. All Napster download sales in the U.S. will now be in the user-friendly, DRM-free MP3 format, which is compatible with virtually any MP3 player or music phone, including the iPod and the iPhone. Napster is the first music subscription service featuring major label content to offer 100% of its catalog in the MP3 format for download sales.

Pricing for download sales is 99 cents for single MP3 tracks and $9.95 for most MP3 albums.

DRM-free MP3s are great.

The music industry betting its future on Napster, though? Sorta pathetic.

Apple today launched iTunes Plus, offering DRM-free music tracks with 256 kbps AAC encoding, for audio quality almost as good as the original recordings, for just $1.29 per song.

iTunes Plus is launching with EMI’s digital catalog of recordings, including singles and albums from Coldplay, The Rolling Stones, Norah Jones, Frank Sinatra, Joss Stone, Pink Floyd, John Coltrane and more than a dozen of Paul McCartney’s classic albums available on iTunes for the first time.

iTunes will continue to offer its entire catalog, currently over five million songs, in the same versions as today—128 kbps AAC encoding with DRM—at the same price of 99 cents per song, alongside the higher quality iTunes Plus versions when available. In addition, iTunes customers can now easily upgrade their library of previously purchased EMI content to iTunes Plus tracks for just 30 cents a song and $3.00 for most albums.

“Our customers are very excited about the freedom and amazing sound quality of iTunes Plus,” said Steve Jobs, Apple’s CEO. “We expect more than half of the songs on iTunes will be offered in iTunes Plus versions by the end of this year.”

“This is a tremendous milestone for digital music,” said Eric Nicoli, CEO of EMI Group. “Consumers are going to love listening to higher quality iTunes Plus tracks from their favorite EMI artists with no usage restrictions.”

With the release of iTunes Plus, customers can now download tracks from their favorite EMI artists without limitations on the type of music player or number of computers that purchased songs can be played on. iTunes is also offering customers a simple, one-click option to easily upgrade their library of previously purchased EMI content to the iTunes Plus versions.

EMI music videos are now also available in iTunes Plus versions with no change in price. iTunes Plus songs purchased from the iTunes Store will play on all iPods, Mac or Windows computers, widescreen TVs with Apple TV and soon iPhones, as well as many other digital music players.

Source:  Apple Launches iTunes Plus

Amazon’s DRM-free MP3s will let customers play their music on PCs, Macs, iPods, Zunes, Zens and burn songs to CDs for personal use.

“Our MP3-only strategy means all the music that customers buy on Amazon is always DRM-free and plays on any device,” said Jeff Bezos, Amazon.com founder and CEO. “We’re excited to have EMI joining us in this effort and look forward to offering our customers MP3s from amazing artists like Coldplay, Norah Jones and Joss Stone.”

via Podcasting News