Radio and newspapers will see their fortunes diverge in 2010, according to analysts. They have muted optimism for the near-term prospects of broadcast radio, but warned of a fresh round of declines for newspapers.
BIA/Kelsey predicts that radio ad revenues will increase about 1.5% from $13.7 billion in 2009 to $13.9 billion this year. However, this doesn't come close to offsetting the 18.4% drop noted by BIA/Kelsey in 2008-2009, when revenues tumbled $3.1 billion from $16.8 billion. On the more positive side, the same forecast sees an annual growth rate of 2% to 4% over the following years, and a 16.5% average annual growth rate for online ad revenues beginning this year.
Newspapers face another grim year according to J.P. Morgan, which predicts an 8% decline in newspaper ad revenues in 2010 compared to 2009 -- making this the fifth straight year of declines for the newspaper business. The loss will be driven by a modest decline in retail ad revenues paired with another 10% drop in classifieds. J.P. Morgan forecasts a total revenue decline of 8.4% at McClatchy.
Figures released by The Newspaper Association of America show in just four years, total newspaper ad revenues have declined from a peak of $49.43 billion in 2005 to $27.6 billion in 2009 -- a decline of almost $22 billion, or 44.1%.
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