The head of the company that virtually commands the market of digital music players and online music sales demands copy protection technologies to be removed from music files, which would enable it to sell more music and more players to end-users. But record labels remain mum yet.

Steve Jobs, the chief executive of Apple Computer which commands the lion’s share of online music distribution market through its iTunes music store and the largest share of the digital music players market with its iPod, has wrote an open letter, where he demands record companies to remove digital right management (DRM) copy protection technology from music files distributed through the Internet. The reason? DRM is simply not needed – as it is available only on 3% of music files in possession of end-users – and record labels themselves sell music DRM-free music on CDs.

“Through the end of 2006, customers purchased a total of 90 million iPods and 2 billion songs from the iTunes store. On average, that’s 22 songs purchased from the iTunes store for each iPod ever sold. […] This means that only 22 out of 1000 songs, or under 3% of the music on the average iPod, is purchased from the iTunes store and protected with a DRM.” Mr. Jobs explains in his open letter to the industry.

That said, according to Mr. Jobs, Apple does not “lock” its customers to use iTunes music store when they purchase iPods. Moreover, while each tune purchased through the iTunes has certain playback limitations, when burned to a CD, the song can be distributed without limitations, both legally and illegally.

The open letter comes after several European countries complained that Apple forces its iPod customers to acquire music from iTunes music store and vice versa. But Mr. Jobs says that it is not Apple, who wants to impose DRM, but record companies wish it to be imposed and Apple Computer would gladly sell music files DRM-free.

“Imagine a world where every online store sells DRM-free music encoded in open licensable formats. In such a world, any player can play music purchased from any store, and any store can sell music which is playable on all players. This is clearly the best alternative for consumers, and Apple would embrace it in a heartbeat. If the big four music companies would license Apple their music without the requirement that it be protected with a DRM, we would switch to selling only DRM-free music on our iTunes store,” Mr. Jobs claims.

For Apple, it does not matter how end-users use their iPod music players and whether they distribute files purchased through the iTunes music store or not: Apple makes money both on iPods and on tracks that users purchase. Obviously, compatibility of the iPod with other music stores, such as Yahoo music store, would be a be a benefit for Apple. Just like the compatibility of iTunes with popular music players from companies like Microsoft and Sandisk would be an advantage for Apple. Moreover, more affordable music files would benefit the whole industry.

Even though the largest record companies – Universal, Sony BMG, Warner and EMI – have not officially reacted on Mr. Jobs letter, there is a report by Reuters news-agency citing sources familiar with the matter that EMI was in talks to release a large amount of its music in an unprotected MP3 format to various online retailers. Would other record labels follow?