No one would deny the new CEO of Activision Blizzard is a pretty powerful guy right now, but he might be slightly mistaken on what the next logical step for his company might be.

In an interview with the Financial Times, Bobby Kotick, chief executive of the new company, said creating a Guitar Hero online music platform was "the natural evolution" of a franchise that has sold close to 20m units and generated $1bn in revenues.

"I don't think there have been a lot of credible alternatives to iTunes, but Guitar Hero certainly has that potential," he said, adding players could already download "note tracks" to use while playing the game....

The merger of Activision with Vivendi Games completed on Thursday. The new company would benefit from Vivendi's ownership of Universal Music and of payment and processing capability in "virtually every country", said Jean-Bernard Levy, Vivendi chief executive.

"These are all the things that enable you to be a successful competitor [to iTunes]," Mr Kotick added.

While Universal's relationship with iTunes is certainly rocky, are the only things a company needs to compete with iTunes a familiar brand and worldwide processing capability? I downloaded Dr. Mario to my Wii, but that doesn't mean I want to buy start buying all my music from Nintendo in the near future.

Activision is at least rumored to still have a shot at a Beatles version of Guitar Hero, and I suppose if digital rights to the Beatles catalog could be negotiated into the deal, they might have some raison d'etre. But it seems like a long tough road to take on iTunes at this point, especially when there's significant competition to your signature product. (Rock Band—remember that?) Maybe it would be best to stick to one thing at a time.

Guitar Hero aims to take on iTunes [Financial Times]

Stephanie Lenz's 29-second recording shows her son bouncing along to the Prince song "Let's Go Crazy," which is heard playing in the background. Lenz uploaded the home video to YouTube in February to share it with her family and friends.

But last month, YouTube informed Lenz that it had removed the video from its website after Universal claimed that the recording infringed a copyright controlled by the music company. Under federal copyright law, a mere allegation of copyright infringement can result in the removal of content from the Internet.

"I was really surprised and angry when I learned my video was removed," said Lenz. "Universal should not be using legal threats to try to prevent people from sharing home videos of their kids with family and friends."

"Universal's takedown notice doesn't even pass the laugh test," said EFF Staff Attorney Corynne McSherry. "Copyright holders should be held accountable when they undermine non-infringing, fair uses like this video."

The Electronic Frontier Foundation is suing Universal on Lenz's behalf; the suit is asking for "a declaratory judgment that Lenz's home video does not infringe any Universal copyright, as well as damages and injunctive relief restraining Universal from bringing further copyright claims in connection with the video." No word on whether people who had their Beyonce-falling clips taken down yesterday are going to go this route as well, but in the new realm of "innovative lawsuits" anything's possible, we suppose.

Mom Sues Universal Music for DMCA Abuse [EFF]

The Universal Music Group of Vivendi, the world's biggest music corporation, last week notified Apple that it will not renew its annual contract to sell music through iTunes, according to executives briefed on the issue who asked for anonymity because negotiations between the companies are confidential.

Instead, Universal said that it would market music to Apple at will, a move that could allow Universal to remove its songs from the iTunes service on short notice if the two sides do not agree on pricing or other terms in the future, these executives said.

...With the shift, Universal appears to be aiming to regain a bit of leverage — although at the risk of provoking a showdown with Mr. Jobs.

In the four years since iTunes popularized the sale of music online, many in the music business have become discouraged by what they consider to be the near-monopoly that Mr. Jobs has held in the digital sector — the one part of the music business that is showing significant growth. In particular, Mr. Jobs's stance on song pricing and the iPod's lack of compatibility with music services other than iTunes have become points of contention.

By refusing to enter a long-term deal, Universal may continue to press for more favorable terms from Apple or even explore deals to sell its catalog exclusively through other channels. If Universal were to pull its catalog from iTunes, Mr. Jobs would lose access to record labels that collectively account for one out of every three new releases sold in the United States, according to Nielsen SoundScan data.

On the flip, though, you have the executives' hope that exclusive Universal content will result in an exodus from the most popular download service—which seems slim, especially when one considers those competing services' lack of compatibility with iPods (and iPhones). (Unless DRM-free services like eMusic, or Amazon's still-not-launched digital store, are on UMG's radar at this point.) Since a large part of this dispute is about pricing, it's not entirely out there to wonder if Universal will try to negotiate for a piece of the music-based revenue Apple gets through iPod sales via a Zune-like revenue sharing deal as well, although it's pretty unlikely that Steve Jobs will be interested in that scenario at all. Either way, here's one piece of advice to the Universal folks: If you're hoping that new 50 Cent tracks will cause the masses to embrace Windows Media-based downloads, you may want to listen to his new songs first. Yes, the beat is better than his "Amusement Park" backing, but opening verses about Vitamin Water windfalls = not really the best way to entice people into dropping a lot of cash for a new portable-music setup.

Universal in Dispute With Apple Over iTunes [NYT]

Amazon, which is considered the best bet to challenge iTunes' supremacy in the digital world, is shooting to launch its MP3 digital download store in May, a target date it has yet to publicly acknowledge. (Amazon declines comment.) Meanwhile, sources familiar with the situation say Universal Music Group plans to test the sale of unprotected digital music files, including some of its classical music catalog conceivably including titles by Andrea Bocelli, at the new Amazon store and other outlets.

Universal has previously tested the sale of some isolated digital rights management-free music, from Jesse McCartney in the United States and French acts Superbus and Emilie Simon in Europe. But now the company plans to expand that initiative significantly by selling classical selections through download stores and subscription services, in the DRM-free format of the retailers' choice. Universal is planning tests in other genres as well, sources say.

It's unclear so far whether iTunes is included among stores slated to sell unprotected Universal music, and the label could not be reached to comment.

Universal's adventures in the DRM-free space should be excellent blog fodder over the coming weeks, given Doug Morris' penchant for cracking down on anyone distributing music in a way that isn't to his liking—and Universal's appointment of an executive strictly in charge of antipiracy measures. Whether or not those tests in other genres will include measurement of purchased files being swapped is up in the air, but the clock has started ticking: Apple announced that EMI's DRM-free offerings will definitely be available on iTunes next month.

Universal, Amazon beef up MP3 sales space [Reuters]

Under the terms of the agreement, Bolt has agreed to provide UMG with a multi-million dollar payment for damages for past infringement, against a percentage of the value of the company. In addition, Bolt has also agreed to introduce filtering technologies within the next 60 days ensuring that its users can no longer exploit the music and videos of UMG artists and songwriters without appropriate payment and consent.

"We are pleased to have resolved this litigation in an amicable manner and that Bolt has recognized our rights under the law," stated Doug Morris, Chairman & CEO, Universal Music Group. "Moving forward, we and our artists will now be paid for the use of our music and videos on the site."

You can almost hear Morris licking his lips as you read that statement, no?

The New York Post reports that Bolt will also pay out a per-play fee to Universal, and given Bolt's relatively small userbase, we imagine that it'll realize Universal a sum that can buy a few extra cups of coffee, much like the dollar-per-Zune-sold settlement UMG negotiated with Microsoft last fall. Whether this paves the way for similar settlements with the bigger players in the streaming-media sphere—particularly MySpace—remains to be seen; Bolt is a smaller player in the game, and according to the New York Times, it had to sell itself to a larger company in order to pay for the settlement. We seriously doubt that MySpace will be willing to give a huge chunk of its revenue over to Universal without a fight, or at least some extended legal negotiations.

Universal Music Group and Bolt Announce Settlement [PR Newswire]

Morris isn't sure he is cut out for the role of enforcer but believes he has no choice. 'The truth is that I'm the most unlikely candidate because I don't like being in the middle of the sandwich,' he said.

Ah, but what would type of sandwich would he be, exactly? Morris clearly wants everyone to believe that he's a Po' Boy, but he's not getting much sympathy from us: The war on Internet music distribution is like the war on drugs, and Morris and his pals will be stuck turning their deep pockets inside-out as the one-a-day calendar pages fly off the wall. If there are going to be some pre-dawn raids, best to go after Apple and Microsoft rather than YouTube and MySpace, as Jobs and Gates might be scared enough to pony up. Besides, you guys chose long ago to treat music videos and streaming audio as free advertising; you can't blame us for getting used to them.

Universal CEO tough on licensing deals [AP]

As they say on The Wire: "Sheeeeeeiiiiittt." Late yesterday, Universal Music Group filed lawsuits against video-sharing websites Grouper and Bolt (the latter of which, judging by accompanying photo, is staffed by the doorman at Delta Phi):

[The suits] mark the first time a major media company has tried to use the courts to narrowly interpret "safe harbor" protections provided by the Digital Millennium Copyright Act of 1998 so it would exclude video-sharing sites. The DMCA provides protection from liability for copyright infringement to Internet companies if they meet certain criteria and follow so-called takedown procedures. Under the procedures outlined in the DMCA, sites have to remove any infringing copyright when notified specifically by the copyright holder.

So maybe this is an extremely ill-informed view, but it seems like Universal wants to bust people who are breakin' the rules...by kinda sorta pretending that other rules don't exist. These guys are brilliant! Imagine what would have happened if they had put even half of this kind of effort behind that last Hoobastank album.

Vivendi's Universal Sues Two Web Sites Over Video Sharing [WSJ]

And then Universal honcho Doug Morris goes and spoils it all by saying something stupid, like "I hate YouTube." From an investors' conference held Tuesday:

"The poster child for (user-generated media) sites are MySpace and YouTube," said Morris, according to a transcript obtained by Reuters. "We believe these new businesses are copyright infringers and owe us tens of millions of dollars. ... [MTV] built a multibillion-dollar company on our (music) ... for virtually nothing. We learned a hard lesson."

We're not sure how, exactly, Morris will deal with these evil infringers—you know, those greedy buggers who were turned on to Fall Out Boy via MySpace and YouTube, and then went on and bought almost 2.5 million copies of their album. Maybe he'll make them work it off—get his coffee, pick up his dry cleaning, walk his dogs, clean his jets with a toothbrush. Or perhaps he'll force every last infringer to buy up the remaining stock of the last Hoobastank album until it's all gone. Either way, we hope he heads out to some shows soon, because if anyone's deserving of a "Hey, Asshole!" shout-out, it's this guy.

"Universal Music pressuring YouTube, MySpace" [Reuters]