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In the first part of a two-part interview, Stephen Cole of the BBC's technology show Click Online talks to Microsoft founder and chairman Bill Gates about the "digital lifestyle".

Stephen Cole:

Now we last met three years ago when we played Xbox and I have to say I was very pleased to say I beat you. What has changed in the last three years for Microsoft and for Bill Gates?

Bill Gates:

Three years ago we were talking about the idea of the digital lifestyle. That your music, your photos, your TV, your communications would all be very different. And over these last three years I'd say that's really coming into the mainstream.

We have brought out the Media Center PC. That's really our showcase. It shows how with a single remote control you can get at all these capabilities and then we are making sure that it connects up to everything else.

Whether it's a phone, a music player, audio receiver and we have an increasing number of partnerships. Now we are up to literally hundreds of hundreds of partners who are building things that connect in with the Windows ecosystem and particularly the high end of that which is Media Center. So it's been a great three years for digital lifestyle innovation.

Stephen Cole:

Can you summarise what your vision is for digital entertainment?

Bill Gates:

The vision is that people should have the ultimate in convenience. Being able to get the things they care about on the appropriate device.

So you have got to have a very simple user interface, you have got to have a richness of software that's there and available and you have to bring together all the elements.

Communication because you want to send photos around, the TV guide because you care about watching that, the latest interactive games that are always improving in very dramatic ways, you want this to be very holistic. So the user thinks: 'Hey I just sit down and I can access what I want'.

Stephen Cole:

This is what you mean by 'computainment'? It hasn't really been a fantastic success.

Bill Gates:

Well first we have to take the popularity of the PC in the home. It has continued to rise, it's the key rich device in the home. So we are building off of that and the success that Windows has there.

Media Center we have just got started a few years ago. Now this holiday we have had double the sales we had last year. We're at about 1.4 million units. So 1.4 million, compared to total PCs or total households is still pretty small...

Stephen Cole:

It is very small indeed.

Bill Gates:

But as these devices come out, we will be able to double the sales of that every year for a number of years.

And you always want to get in to avant-garde households and then start the word of mouth, where people can come and see that just this one remote control can teach somebody how to use the simple menus.

In a few minutes they can come and say: 'Wow I really like that!' So it builds momentum, so we feel very good about where we are with the Media Center.

Stephen Cole:

But what convinces you that the PC will be the entertainment hub?

Bill Gates:

People don't want lots and lots of single purpose devices. They do not want to have to learn how to set up something for photos, another thing for music, another thing for video. And you do want the richness, the graphics that only the PC can provide. Now we need to make it very easy to setup, we need to show this kind of simple user interface can be provided there. The PC has more software, more competition, more richness than anything else. So making it simple and rich, that means the PC will be the key device.

Stephen Cole:

How important is the co-operation of the content providers?

Bill Gates:

I would say that it is extremely important. With the music companies they've licensed us, for our download service, they have licensed lots of other people who use the standard place for sure approach that we have promoted.

So they are coming into the digital age. They are providing a la carte, they are providing subscriptions. What we are seeing more of is people on the video side. We are now seeing a partnership with MTV which has got a lot of great content. They are going to do a music service with their videos and lots of very special things...

Stephen Cole:

It is a tricky area though. Digital rights management. Are you sure that you are not worried that it could trip you up?

Bill Gates:

Well certainly, you want the convenience and yet you want people who create things to have some ability to be able to charge for those things.

And we feel very good about the dialogue we have had for many years with the content industries. How we have struck the right balance there and that is why you see an explosion in digital music.