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.

The letter written by Bailey was first revealed by Sky.com. We have contacted Trinity Mirror, who confirmed that the letter was sent today, and that the wording quoted on Sky was correct.

It refers to comments made by Mensch during her interrogation of James and Rupert Murdoch. At one point, she cites a passage from The Insider, a book by Piers Morgan, who edited another tabloid, the Mirror, between 1995 and 2004. In the passage, he describes how easy it is to listen to another person’s email if that person doesn’t set a security code. Mensch, however, mis-quoted it and effectively said he admitted to hacking phones.

Morgan has flat-out denied being involved in any phone hacking while he was at the Mirror and before that at the News of the World, which he edited prior to his time at the Mirror. He confronted Mensch on CNN after Tuesday’s hearing, refuting her claims point blank and then some. Paul Dacre, the editor of The Mail, has also denied any involvement with hacking.

Bailey’s letter says the comments could cause “serious reputational damage” if Mensch does not correct what she said, particularly because it came not from a competitor, but from the theoretically impartial Committee.

That does not necessarily mean that Trinity Mirror is weighing up legal action over the claims. “It’s just a letter at this point,” said the spokesperson from Trinity Mirror. “That’s all we have to say on it.”

In any case, the task force that has been set up by David Cameron is due to investigate all the newspapers for these practices. Barring the wholesale dumping of evidence, hopefully the truth will out, one way or the other.

No surprise, then, that she again called the £68 million BBC plan “a threat to the development and diversity of the local media sector online and potentially to its print-based cousins … it is anti-competitive, unnecessary and will waste public money replicating existing growing commercial offerings”.

Still, Bailey isn’t saying the BBC alone will kill local newspapers; the ad recession may do that all by itself – she forecast “tough times ahead”, backing recent observations from PwC, Enders, WARC, Hi-Media and DMGT that even web ads are slowing: “Digital businesses can no longer rely simply on a rising tide of growth. The latest market figures show that the downturn in the economy is now affecting digital media, with growth rates in internet advertising revenue falling in 2008 and the market expected to be more challenging in 2009.”

Trinity is certainly trying to grow a digital business to replace falling print revenue (witness the hyperlocal initiatives that Bailey says are threatened by the BBC) – something she said is “the right thing to do”. But she said publishers had to convert eyeballs in to cash, lest they simply run out of money. If Bailey sounded more confident than July, when she reported a 15 percent freefall in ad sales and upcoming £40 million savings, note her gloomy prediction today: “Remember 1999? Well 2009 will be like Groundhog Day. For the lucky, we should expect consolidation and, for the less, fortunate failure.” More at Guardian.co.uk.