Fox wants to merge Trinity Mirror’s distinct national and regional news publishing divisions, double-down on creating digital products for its newspapers and close its Happli daily deals service to fund digital development (full announcement).

Trinity Mirror publishes national titles including The Mirror and Daily Record plus over 130 regional papers and over 500 digital products.

According to Fox’s staff memo (via Guardian):

“We urgently need to bring to market a suite of digital products that support all of our titles and enable us to rapidly grow digital advertising revenue.

“This will include improved websites, mobile and tablet applications across Apple and Android platforms.

“In order to ensure that sufficient capital is allocated to new product development, it is our intention to close our loss-making Happli division. I want to thank Dave Raywood and his team for all their hard work over the last 12 months. We will today commence consultation with the employees affected and will seek to utilise the assets and capabilities built by Happli in other parts other business, particularly reader offers.

“Our resources are limited and have to be laser focussed on developing new revenue streams that have the greatest chance of success. These are most likely to build upon the expertise, customers and brands we already have in the group and to have the capability of reaching the scale required to become a leading player.”

Trinity Mirror’s national digital advertising revenue grew 13.3 percent last year to a paltry £3.4 million £5.5 million, whilst regional digital advertising revenue even declined to £25.1 million. Many of Trinity Mirror’s sites are a mess.

Searching for answers, the group became the latest to launch a Groupon clone this March when it formed Happli out of Frugaloo, the NimbleCommerce-powered daily deals site it tested in Manchester and Newcastle. The group had allocated £10 million investment over three years to Happli, expecting it to become profitable by 2014 and to reap annual revenue of £20 million in the same year, in a market it said would be worth £1 billion by 2016.

Arguably, Happli – which was unrelated to particular old-line newspaper products – is exactly the kind of new revenue stream Fox really wants. Johnston Press has launched such a site, and Mail Online publisher A&N Media is now undertaking a large marketing campaign for its equivalent, Wowcher. But Fox appears to favour making better app and website touchpoints for his existing newspapers.

Even under previous CEO Sly Bailey, Trinity Mirror had identified a need to create a group-wide digital unit, headed by UK nationals MD Chris Ellis.

It seems like Trinity Mirror has undergone a digital restructure every year for six years now. The biggest corporate restructure, however, is this time’s unification of national and regional. According to Fox:

“Regionals and nationals face fundamentally the same market pressures. Going forwards we will tackle these issues as one united team. We are currently confusing our advertisers with multiple points of contact”

Simon Fox, who leaves as CEO of HMV Group this week, has been appointed CEO of Trinity Mirror, which publishes over 130 regional papers, 500 regional websites, classified sites and the national Mirror, People, Daily Record and Sunday Mail.

Fox is appointed by Trinity Mirror’s new chair David Grigson, having shared the board together at social book service aNobii before HMV sold it to Sainsbury’s. Grigson (via release):

“Simon will provide the strategic leadership the company needs. His experience gives him a current and in-depth understanding of how consumers’ habits are changing and the technology that is driving these changes.”

Trinity Mirror has long attracted consternation for protecting profit with cuts while its underlying business suffers. It ousted CEO Sly Bailey – who recognised many of the problems but, during the economic downturn, insisted newspapers’ travails were somewhat cyclical – in May, amid growing complaint over her salary.

Trinity Mirror is the archetype of a newspaper publisher that needs to re-invent its product – especially exposed to the challenged local news market.

The Mirror redesigned its website earlier this year but has been driving crassly down-market, with celebrity titillation seemingly designed to plow the same low-brow furrow charted successfully by Mail Online.

Digital revenue growth has slowed down, challenged by a glut of competition for its MirrorBingo gambling website.

There are certainly parallels between Fox’s last and next employment sectors. Earlier this month, HMV forecast physical music sales on which it depends will shed another fifth this year and each year for the next three years.

Fox’s HMV tenure was marked by an attempt to sell in-store digital entertainment hardware on which consumers might play content. This year, he averted a collapse of the business only when music labels and movie studios agreed not to call in overdue payments for plastic discs but to accept HMV Group equity instead of the money.

Trinity Mirror’s digital strategy has see-sawed in recent years. In 2010, Trinity Mirror made its group-wide digital director and its regionals digital director redundant. National digital publisher Matt Kelly, who carved out soccer and celebrity coverage in to two distinct sites, recently left after 18 years with the publisher. Nationals digital managing director Chris Ellis remains aboard. Last month, tech exec Matthew Colebourne became Ellis’ director of new business development, charged with introducing new digital revenue streams.

Fox is the latest non-news publishing appointment to run a newspaper company, after Microsoft’s Ashley Highfield took the helm at Johnston Press and BBC director-general Mark Thompson was named to lead New York Times Company.