• by Erik Sass  @eriksass1, December 16, 2009

In case the outlook was not already gloomy enough, a new industry forecast from Kubas Associates, based on a survey of 500 newspaper executives this November, contains grim tidings for the newspaper business in the coming year.

Among the discouraging findings: publishers seem to agree that advertising revenues will continue to decline in 2010, although less rapidly (which passes for "improvement" nowadays), with a 0.2% overall decline.

However, Kubas noted that publishers have been too optimistic in the past: the same survey in 2008 predicted a 9% drop in revenues in 2009, well short of the actual loss this year.

According to publishers, the 2010 decline will resemble previous years in its scope, if not its magnitude, with losses spread across classifieds, national, and retail (or local) advertising -- in other words, all the major newspaper advertising categories.

Kubas expects recruitment classifieds to be the weakest category in 2010, with more moderate declines in real estate, automotive, and national advertising. In retail or local advertising, the decline will hit the direct mail category as well.

Online advertising -- the sole, intermittent source of hope for newspapers in recent years, which nonetheless also declined in 2009 -- will probably increase in 2010, but not nearly enough to make up for the catastrophic losses of the last three years.

According to the Newspaper Association of America, total newspaper advertising revenues fell 28.5% in the first three quarters of 2009 compared to the same period in 2010, from about $27.8 billion to $19.9 billion, with online revenues of $1.97 billion making up just 10% of the latter figure.

With newspapers heading into an uncertain future, publishers are surprisingly optimistic, outlining an array of strategic initiatives to minimize the damage and maybe even return to positive revenue growth.

These goals include a major focus on improving the Web experience for readers and advertisers, for example, with the introduction of self-serve ad sales; tight control of staff-related costs (which presumably means more layoffs); and launching niche, specialty, or lifestyle products.

Kubas said that few, if any, had plans to outsource printing or advertising sales, or reducing publishing schedules by dropping certain weekday editions.