Forbes and the WSJ (there may be others) are reporting that EMI Group has been in advanced talks to sell music downloads in an unprotected MP3 format to online retailers that include RealNetworks, Yahoo!, MySpace and Napster. Forbes, however, notes that negotiations "slowed dramatically" today, putting the deal in jeopardy. An unprotected format means that EMI music could be freely copied and played on virtually any device. Steve Jobs has endorsed the idea of selling music without copy protections, maintaining that they have done little to slow the piracy. From Forbes:

EMI and other labels have already experimented with selling a handful of songs from artists like Norah Jones and Jessica Simpson in unencrypted MP3 format, which can be played on any computer or portable music player and can be copied freely. But sources say EMI was talking to music vendors about doing the same thing with much of the company's online catalog. A deal would have been a bold move for troubled EMI, which is in the midst of a painful restructuring that included the ouster last month of two of its top executives. Until now the company and its major competitors--Vivendi's Universal Music Group, Sony BMG Music and Warner Music Group--have maintained a united front on the need to preserve usage restrictions on music downloads to combat piracy.

Meanwhile, the Recording Industry Association of America says that rather than the major labels dropping usage restrictions, Apple should license its iPod technology so that iTunes downloads could be compatible with other digital music players. Wonder how Jobs would feel about that.