AT&T Inc. (NYSE: T) has extended its relationship with internet music provider Napster Inc. (NASDAQ: NAPS), according to Billboard. The new deal makes AT&T the ninth wireless provider to use Napster and includes "over-the-air, full-song downloads" and customer access to Napster's entire 5-million song catalog. With prices of $3 per song and $7.50 per five-pack, customers will also be able to download songs purchased with their phone onto their computer, provided they download the Napster software. However, a subscription service allowing customers to pay a monthly rate for unlimited downloads will not be offered in the new deal.

The Napster deal is the latest in a string of deals for AT&T that increases the amount of music and related media customers can access from AT&T phones. Billboard comments "the move puts AT&T on par with competitors Sprint (NYSE: S) and Verizon Wireless (NYSE: VZ), both of which have offered a full-song download service for close to two years now."

Last month, AT&T made a separate "over-the-air" deal with eMusic to bring Digital Rights Management-free songs to phones. Napster becomes the second "o-t-a" deal for the company, bringing the largest catalog but no DRM-free.

It's no surprise that AT&T would increase the amount of content offered, especially to better compete with other wireless providers. The only drawback seems to be pricing and the lack of a subscription-based service. Of course, a subscription service would curb those high prices, but limit profit for either company in the new deal. The $3 tag for songs on the phone hardly competes with the same tracks online or in other digital music stores, and both eMusic and Napster offer $9.95 subscription services online. In any case, this is a smart move because it does offer more content on AT&T phones and allows the company to compete with other wireless providers directly.

In the latest slap to Apple, Inc.'s (NASDAQ: AAPL) iTunes and iPod platform, Amazon.com (NASDAQ: AMZN) has released a "beta" (as in, being tested) version of its 'Amazon MP3' digital music store as of today, accessible through www.amazonmp3.com. While Apple continues to be the largest seller of digital music files on the planet, its recently launch of the 'iTunes Plus' selection was hailed as a larger experiment in the music industry's transition from the CD to the file download. The experiment? Apple removed digital rights management (DRM) copy protection from these iTunes Plus files, making them susceptible to file trading among friends and all over the Internet.

The music industry knows that DRM-free music file downloads are the future, and are relenting from paranoia about internet users everywhere stealing music slowly but surely. In Amazon's case, its new MP3 store features over two million songs from 180,000 artists represented by over 20,000 music labels. And what do you know -- that entire music catalog is being offered in DRM-free MP3 format, making all two million songs virtually universal to every music player from the iPod to in-dash CD players in most new cars. And, without protection, buyers are free to copy and share the files -- without any protection -- to their heart's content. That's the potential mushroom cloud-size problem the music industry execs go to bed with each night.

The first DRM-free album from EMI was released on Monday and it was not a new album. The album chosen to herald in the new age of music downloads was Damon Albarn's The Good, the Bad and the Queen, originally released in January. Additionally, it is not even available as a DRM-free album on Apple Inc.'s (NASDAQ:AAPL) iTunes, instead the band's own website in association with 7digital.com is offering the 320 kbps tracks from the album. I blogged about how the band had performed a short set at the announcement on Monday before, but now it seems (or did seem) that the band would be the first to enter the DRM-free world fully (I had previously thought the band's endeavors were limited to the new single "Green Fields" - which I downloaded after the announcement).

I can't help but wonder if any change has been noticed with the announcement and the release of this album as the first DRM-free. Almost three months after it was initially released, I know that I already have it, and will not purchase a second copy (even if the quality is high). It seems that for the first truly "new" album released under the DRM-free agreement, we will have to wait until May when the entire system becomes operational.

On Sunday I had blogged that Apple's shares were down .84 points on last Friday, closing slightly above 92.9. Yesterday the stock rose another .41 points for the week, bringing the shares to 94.68, an almost 2 point jump. It's probably to early to say whether the DRM-free announcement has made any impact, but with shares rising over a week, some improvement should be connected.