You said you do want to keep focused on the music space, as opposed to other downloadable subscription content, however.
Right now, we're going to stay focused on music. Clearly, with the Napster brand, it gives us the opportunity to be electronic distributors of motion pictures, spoken work, electronic games, etc., all of which are very likely on our road map. But our concentration right now is doing an exceptional job in music.
There's been a big tussle over technology and interoperability. You've said you're comfortable using Windows Media, because it's the most widely used player. Do you believe there needs to be more interoperability, or is the market OK as is?
I think that it is certainly bad for consumers that Apple has not opened up its platform with the iPod to other services. I think that it's also bad for Apple and the iPod that they are trapped in the very limited experience that iTunes brings.
I think that a strategy like that will ultimately catch up with Apple, if they continue to cloister their customers in an environment that is not competitive and limits choice. In the meantime, I think that it has stunted the growth of other services in their early days to not have access to what is currently the most popular player on the market.
All of that said, I am highly confident in our decision to build all of our technology around Microsoft Windows. That has also really been borne out by conversations we've had throughout the industry. For example, at a major US retailer, I was told by the head of merchandising that they expect Apple's market share to be less than 10 percent within 24 months. That's very consistent with what I think that a lot of people feel -- that as this consumer opportunity moves to mass adoption, people want choice.
Do you have any concern, as a Microsoft technology customer, that Microsoft is now becoming a competitor to you on the store front?
We're no more concerned about the entry of MSN than we were about the entry of Wal-Mart or the entry of Sony. We take all of these competitors very seriously, but we wouldn't rate the level of threat higher from the MSN service.
You've been one of the biggest backers of Microsoft's Janus technology, which allows the subscription-based downloads to be played on some portable devices. Do you see that being a large part of your business in the next 12 months?
We just returned from doing focus groups, and it validated what we all intuitively knew -- that portable subscription-based music really looms as being the potential killer app for digital music. We already know that the experience of a music subscription is infinitely better than a download store.
Any users of a subscription service would tell you that the only thing missing is the opportunity to move those tracks onto their MP3 player. In our recent focus groups, our individuals polled overwhelmingly identified the portable subscription content as the No. 1 thing they'd like to see.
So you do indeed think that Janus will be a large part of your business fairly soon?
Yes. I think that, certainly a year from now or a year from the release of the Janus technology, that the lion's share of our subscribers will be using portable subscriptions. It will be very important to us.
