Sly Bailey, the chief executive of Trinity Mirror, is warning digital businesses to beware of the inevitable bubble-burst.
Stating that digital growth of recent years is now slowing, she has suggested there were “tough times ahead”.
Delivering the opening keynote speech at the annual Association of Online Publishers, Bailey voiced her concerns about the BBC’s plans to spend £68 million on 65 local video websites which she claims would hamper fledgling digital businesses and calls it “anti-competitive, unnecessary”.
Bailey believes that only the strong will survive through the forthcoming market slow down.
Bailey said: “Building new digital audiences is the right thing to do. Attracting millions of unique users to your digital brands is great. But if businesses can’t convert those users to revenue and then to sustainable profit then they will simply run of cash. This is no time for vanity publishing.
“Our business models have to be sound and our investment plans have to be able to withstand short-term economic shock. I’m firmly of the belief that there will be casualties in the coming months. Remember 1999? Well 2009 will be like Groundhog Day. For the lucky we should expect consolidation and for the less fortunate failure.”
Trinity Mirror saw pre-tax profits fall fro the first six months of 2008 (see Trinity Mirror Sees Pre-Tax Profits Fall) and has recently announced that it is to close seven local papers and nine satellite offices in North Wales and the North West, putting 30 jobs at risk (see Trinity Mirror To Close Seven Local Papers).
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