HMV cites compatibility and DRM-free as key to cracking digital market.

Retail group to focus on digital sales in wake of strong year-end results, despite a `clearly very difficult' UK high street market and sale of Japanese stores

HMV Group CEO Simon Fox has pledged the retailer will up its digital game this year on the back of a promising set of financial results.

"This needs to be a digital year for us," says Fox, who acknowledges that, despite the business making strides again on the high street and selling CDs, DVDs and games from its online store hmv.com, its progress to date in the download market has been disappointing.

"We are absolutely determined to up our game here," he adds. "We've got a number of initiatives we are planning. We are very serious about becoming a credible player in digital; it's vital we do. We're launching our MP3 store later in the summer and we've just launched Get Closer on open beta. We're also developing the HMV jukebox streaming service."

HMV Digital launched with a huge fanfare in September 2005, more than a year after first Napster and then iTunes rolled out their services in the UK.

But, despite having such a famous and trusted brand name, HMV has made much less headway than iTunes, which over the same timeframe has cemented its position as the sector's runaway market leader.

One clear issue with HMV's digital store has been its incompatibility with Apple's iPod players, a point underlined by the UK retailer in its end-of-year financial results last week revealing a 95% lift in technology sales, largely from selling hardware that does not work with its own downloads site.