Gates has a plan: Compu-tainment

In Los Angeles on Tuesday, Microsoft trumpeted a new era of "digital entertainment anywhere." The company unveiled the latest Windows XP Media Center PCs, aimed at bringing the computer into consumers' living rooms; announced the formal launch of its online music store; and discussed portable media devices. Prior to the events, Microsoft Chairman Bill Gates spoke by telephone to USA TODAY'sEdward C. Baig.

Q: You've said people have high expectations for digital entertainment that have not been met. How do you meet those?

Gates: What the consumer wants is pretty clear: a single remote control that lets them navigate photos, music, videos, TV in a very rich way.

They want to see that on any screen in the house and then have a great portable device where they can take that stuff wherever they want anytime. The full realization of that dream is still years away, but we've taken a dramatic step in delivering that with Media Center.

Q: Some analysts are projecting that 3% to 5% of the PC production rate could be Windows Media Centers by 2008. Do you concur?

Gates: That's reasonable. We see the possibility of being at the high end of that range or even above. We've invested a lot in the partnerships that go around it. It requires understanding TV guides, digital rights, getting lots of people to offer things up.

We feel like we are pioneering an experience that to us is a clear thing most households will want.

Q: What about Apple?

Gates: We have a more ambitious view of software than they do. We've got the world's biggest software R&D budget. So it's not surprising that we'd be the most aggressive. In terms of pure music, Apple did a very good job. They did an excellent device. They got the rights in a form where there is some licensed downloading going on.

We need to make sure we're every bit as good as them and offer some additional strengths: the fact that you could choose different devices, the fact that because we don't make the hardware it is easy for us to work with phone and car manufacturers.

Q: What's your take on making Windows Media compatible with Apple?

Gates: We're big believers in interoperability.

We've stated very clearly that if Apple wanted to support interoperability, we'd make that super easy for them. The notion that a single device is all anybody is going to want is sort of like saying the Model T is the end of everything.

We believe that some people are going to want video. We think there's going to be a lot of great music player devices, not just from one company.

Q: You've got media "extenders" that let folks watch content in the living room from a machine elsewhere. Is this a long-term solution?

Gates: We give people a choice: You can connect up to every display in the house with extenders or you can have the Media Center PC right there in the living room. Certainly ease of use and reliability has to be super strong for us to be successful. Media Center PCs are default-configured to what we call Auto Update.

(Consumers are) receiving not only the latest in terms of security work but automatically receiving improvements without having to do anything.

Q: Speaking of security, Internet Explorer has had well-publicized holes ...

Gates: Understand those are cases where you are downloading third-party software.

Q: Yes, but will people continue to do that with Media Center?

Gates: You might well do it. We need to use approaches that block people from ever getting software onto the machine they don't want.

Q: Might you add anti-virus/spyware protection in Windows?

Gates: It's not a thing you build in. You have to offer a service. There are third parties who are doing a good job. We're always taking a hard look, but we don't have any concrete plans.

Q: How about "search"?

Gates: You will see amazing search in (the next version of Windows called) Longhorn. In fact, even before that comes out - which we expect in 2006 - we'll have MSN offerings that will provide very rich search capabilities. Search is a big area for us. We've got smart competitors, Google and Yahoo, but we see ways that we can take search way beyond what we or they have done to date.

Q: Being in Los Angeles, are you trying to get the studios' attention regarding Windows Media copy protection?

Gates: We've been spending a lot of time with studios. We feel we're making good progress convincing them that having more of their video content easily accessible through the PC early is good for their business. They see the music industry that probably regrets not moving sooner to having download and subscription type offerings. That's probably not the key why we're doing the big public event - it's more this idea that the PC meets the living room.

Q: There is talk of a Google browser. Internet Explorer has had its security woes. How do you keep users?

Gates: More has been invested in making IE secure than any browser on the planet by a long shot. Nothing is going to change. That's the one over 90% of people are going to keep using.