As Microsoft took the lid off its plans for the Zune music player, Entertainment and Devices Division President Robbie Bach talked with...

As Microsoft took the lid off its plans for the Zune music player, Entertainment and Devices Division President Robbie Bach talked with Seattle Times reporter Benjamin J. Romano about connected entertainment, profitability in his division, the music industry and much more.

Here’s an edited excerpt of that conversation:

Q: Microsoft has articulated a vision for connected entertainment. What are some of the big pieces missing that you’ll look to put in place in the medium term?

Bach: Take the whole area of video, where we have actually a very nice service on Xbox. We have MediaRoom, which is our IPTV service. We have some things on Media Center, but it’s still kind of a disconnected area.

Integration in the mobile space [is] still an area where — not just us but everybody — is pretty disconnected. …

Thinking through logical extensions to Zune Social and what we do with social networking on Xbox and how that expands is also an area ripe for innovation.

The challenge in the connected-entertainment work isn’t finding things where there’s opportunity. The real challenge is prioritizing and saying, “Which things do we want to knock off first?”

Q: On the commitment you’ve made to profitability for your division, is that a commitment to ongoing profitability or just for this fiscal year?

Bach: We’ve said we’re going to be profitable this year and that Xbox is going to be profitable this year. That’s kind of all we’ve said.

Certainly the presumption is … that we want to build a sustainable business. Is it possible we could look down the road and say, “Gosh, there’s a big investment that we need to make that might make us unprofitable in a year or in a quarter?” Sure. Everybody should always assume that’s possible.

Q: What’s the negotiating climate like now versus a year ago with the record labels?

Bach: We’re No. 2 in our category. They see cool devices coming. So I think there’s a credibility point for us that’s helpful. …

Everybody in the industry is realizing that as assets have become digital, we have to think about things in a different way and so people are a little bit more open to experimentation. …

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com