“Music is not a commodity,” declares HMV (LSE: HMV) boss Simon Fox in a lengthy interview in the Sunday Telegraph on the retailer’s digital future. It’s a rather ironic pronouncement considering how things are going in the music business, though things are looking up for the retailer, whose three-year revamp--as noted in last week’s earnings--is beginning to pay off.

Certainly the investment in its ‘next-generation” stores to add transactional kiosks, soft areas and game zones has produced a big improvement in sales figures. The next-generation store in Merry Hill, West Midlands, has seen a 25 per cent bump in like-for-like sales growth since it was upgraded. It costs the retailer around £300,000 and £400,000 to convert a store, according to Fox. It’s a “serious investment,” he says, if the chain were to upgrade all of its stores, and not just the 15-20 it plans on doing up this year.

And while HMV’s been accused before of being slow to join the digital shift, Fox revealed that its site HMV.com gets over 1 million visitors a week, twice the size of iTunes in the UK. Still, he was quick to add that while digital was “growing quickly” it was important “to keep it in perspective”—that is, digital was 6 percent of the total music market, while cd’s still accounted for 94 percent sales. The store, however, has seen CD sales decline 10 percent since last year.

Meanwhile, Fox strikes a very resigned tone on illegal downloads. Yes, it “remains an issue,” he says, “But there ain’t that much we can do about it, other than support the labels and the trade associations to continue to fight it, which we do.”

• Earnings: HMV Profits Climb Back On Games, Web Sales, Next-Gen Stores