Rush hour has begun on a sunny Friday afternoon but Kim Dotcom, internet entrepreneur and bete noire of the entertainment industry, is asleep. He keeps strange hours – working, eating and gaming all night, sleeping most of the day.

I'm not the only one waiting for him to wake in the shady outdoor dining area of the Dotcom mansion, a NZ$30m (£15m) pile half an hour's drive north of Auckland. James Kimmer, Dotcom's political adviser, whose other clients include the recently freed Russian oligarch Mikhail Khodorkovsky, is here to shoot a campaign ad for Dotcom's new political party, which will contest the next New Zealand general election, almost certain to be held at some point this year. Kimmer has to wait until the boss is done promoting his debut EDM album Good Times first.

Both these ventures launch next week – on 20 January, the day before Dotcom turns 40. That's also the second anniversary of what has come to be known as "the raid", his arrest on money laundering, racketeering and copyright infringement charges. It was conducted in a style straight from Dotcom's beloved video games, by 76 New Zealand police officers, some armed with MP5 machine guns, some arriving on helicopter. The charges stemmed from Megaupload, the file-sharing company he established in Hong Kong in 2005 which became a major piracy hub, at one stage accounting for 4% of all internet traffic, and with 180 million registered users. After intense lobbying by the movie and music industries, Megaupload was shut down by the US Department of Justice on 19 January 2012. Dotcom is currently on bail, fighting extradition to the US, with the next hearing set for April.

If the politics, the album, and the legal complications weren't enough, there's also mega.co.nz, a successor to Megaupload, and Baboom, a music distribution service that he has previously described as an "iTunes-Spotify hybrid". He also dabbles in theatre and recently reclaimed the #1 global ranking in the Xbox shooter Call of Duty ("I have a really good kill:death ratio"). He has five young children, too. All in all enough to keep anyone awake all night.

After 40 minutes, Dotcom, all 6ft 7in and 20st (130kg) of him, wanders through the patio door and settles at the head of a long wooden table. He's pale with short-cropped sandy hair and sideburns that form little ski jumps on either side of his large fleshy head. As ever, he's dressed entirely in black.

I mention his political ambitions, which I'd been discussing with Kimmer, and Dotcom lays out his vision. "I want to create tech jobs, by creating the right environment for companies to come here and establish a presence in New Zealand. Meaning the right legislation – safe harbour laws. Laws unlike the US, where you have to install backdoors if the government asks you, and you can't do anything about it. You can't even tell anyone about it."

Safe harbour laws, which reduce or eliminate liability if parties act in good faith, might have saved him from his current legal problems. Removing backdoors from service providers would make it harder to gain evidence to charge alleged pirates. But this isn't just a publicity stunt designed to raise awareness of his plight: he's confident of breaching the 5% threshold that will bring his candidates into parliament. Dotcom – who himself won't be running – sees his party as the beginnings of a worldwide stirring against the surveillance state and attempts to control the internet.

Kim Dotcom characteristically flaunting his wealth in 2012. Photograph: Action Press/REX

"We are all children of Assange," he says, later noting that "the internet is by the people, for the people.

"The people elect those in power. The people will awake to what's happening here. The privacy intrusions, they will not go unnoticed. We here in New Zealand have elections in November, and you will see that this whole thing will have a great impact."

Dotcom is not just passing through New Zealand. He's become a major public figure here, and not just of fun. His opinions and his party are being taken seriously. He loves this land not just for its clean air and greenery, but for being remote enough to feel safe. "New Zealand is not on any nuclear target list. It's the perfect place to survive a global crisis." He is certain there's a major international conflict looming.

That insecurity might be a natural byproduct of the turbulent life he has led. In the 90s he was a famous hacker in Germany, convicted of computer fraud and data espionage, before commencing a career in business that would bring further court dates for embezzlement and failing to disclose shareholdings.

In the mid 2000s, after changing his named from Schmitz to Dotcom, he moved to Hong Kong, and started Megaupload. The company had 50 million daily users at its peak and, through a system that, in effect, paid people to upload pirated material, facilitated a gigantic unsanctioned exchange of music and movies. In short order he made a lot of money, while developing a reputation as an international playboy – the bad boy of the internet.

But since the raid, and the US government's case against him, he's emerged with a new image: digital martyr and internet freedom evangelist. These two Kim Dotcoms, the villain and the hero, remain as competing public personae. A lot of his current activities, from the political party to funding fireworks displays, can be viewed as an attempt to convince people he should be embraced and

not feared.

To try to escape his troubles over the past couple of years, Dotcom turned to making music. "When you have a family with five kids, and you're facing an indictment with potentially 80 years in prison, you're not in a good state of mind. But that's why the music really helped me. When I was in the studio, everything else just turned off."

He is effectively CEO of his album, rather than author. "I was the architect of my music. I have done most of the sound design myself. I choose the synthesiser. I choose the effects that go on it. Apart from playing the music," he says, "all these songs are constructed by me."

The creative process affected him deeply. "I cried several times," he says. "Being in the studio, working on the lyrics. When you really find the right thing, you get emotionally so involved."

He says making the album helped him relate to his future partners in music distribution service Baboom. "I wanted to know what an artist goes through. How they feel. How it affects them, what kind of obstacles they have to overcome. Because I wanted to create the best tools for them."

It's like method acting, I say. "Exactly."

"I think it made Baboom much better. If I didn't do it, I wouldn't have implemented some of the things that I had, which are really genius."

Kim Dotcom (far right) and his fellow defendants following his arrest over Megaupload.com Photograph: Fairfax Media via Getty Images

Some of those "genius" ideas sound pretty worthwhile, such as using lossless FLAC files instead of MP3s to provide "HD audio", and hardwiring contractual splits and their corresponding payments into songs. Others are less promising, like a preference for downloads over the cloud, and a free service involving the overlay of existing internet ads with his own, which sounds a lot like more theft. When I ask how that would affect struggling online publishers, he says they are not the target.

"It's the big boys, the Googles of this world, that are already benefiting from piracy, and not paying the artists a dime."

Dotcom seems oblivious to irony at times. But there is an element of truth in this line of defence: Kim Dotcom and Megaupload were hardly the only people getting rich from piracy. ISPs, Google, data centres and hundreds of others profited along the way. He saw his company as no different.

"We were all under the impression that we were acting in a perfectly legal space with Megaupload, and that we as service providers would not face any actions like this. Of course there was always the route that Hollywood could have taken, to sue us civilly. That's what we expected."

The music and movie industries had bigger plans for him in store. But if Baboom works out he'll have his revenge on those opponents in music who've brought him, if not exactly low, then lower.

After talking for a little over an hour he shows me around the mansion. Even though the US government has frozen his assets, including US$175m (£106m) in cash, even his chastened circumstances are beyond the wildest dreams of most teenage boys. The walls are crowded with photos of Dotcom with a yacht, Dotcom with a helicopter, Dotcom with a private jet. There's a gaming room with several linked Xbox consoles. A home studio, a huge poker table, three separate circular dining tables, each replete with a brushed stainless lazy susan. They, like the garish silver coat of arms that adorns many walls, were designed by Dotcom himself.

We head outside to traverse his 60 acres on a golf cart, and he talks about what he sees as a conspiracy that shut down his old company. "I reached out to both the movie and recording industries," he says. "What came back was: 'Shut down Megaupload. Then we'll talk.' That wasn't really acceptable."

The government came for him anyway. This despite Megaupload claiming to have removed the payments for users who uploaded pirated content in 2007. I ask why he thinks they kept doing it. "To be honest, I have no idea," he says. "I don't really think about that."

That seems implausible, and – tellingly – his new site is already a piracy hub. "The same amount if not more of piracy is happening everywhere," he says dismissively. Perhaps. It still seems strange, even foolhardy, to have jumped back into the arena so soon after his arrest.

There was an alternative. Around the time Megaupload was in its pomp, the streaming services Spotify and Netflix were making their plays for the future too. What their respective founders Daniel Ek and Reed Hastings recognised was that nailing the technology was one thing, but it was worthless if it wasn't signed off by rights-holders. They spent years courting those companies, convincing them to roll the dice on streaming, experimenting with different ownership structures and revenue splits until they found one everyone could live with.

Dotcom is as visionary as Hastings or Ek. But he never had the temperament to bow and scrape to the "dinosaurs", as he calls them, running the music and movie businesses. Even now he seems set on operating at the very limits of the law, despite the potential impact on his family and liberty.

We glide back into the courtyard. His wife Mona and kids are wandering up the drive, along with a nanny and a puppy. "Daddy, Daddy!" the kids scream, leaping all over him.

He peels the kids off and they continue up the hill. Daddy doesn't follow. Instead he will head inside to film the campaign ad. After that there's a photo-shoot, and later, an edit of a music video in the city that will run late into the night. All part of his endless battle to change the world's mind about Kim Dotcom.

"I'm not a pirate," he says, unbidden. "I'm an innovator."

Unfortunately for him, for the time being at least, he's both.

Good Times is released on Kimpire Music on 20 January.