• by Erik Sass , August 7, 2009

The woes of newspapers are well-publicized, but it's unlikely that the medium will continue to decline at a double-digit pace indefinitely, according to Borrell Associates, which issued a more realistic forecast for the beleaguered business post-recession.

But Borrell's outlook -- while more optimistic than some -- is hardly cheery, predicting the post-recession period will mostly be one of stagnation for newspapers.

Borrell said the post-recession period will bring a "mild rebound" over the next five years, with a 2.4% increase in newspaper ad revenue in 2010, with growth in the low single digits in successive years. Much of the new growth will be driven by renewed activity in online classifieds and organic growth in display advertising, both of which have stalled or declined during the recession.

But the fact remains: This isn't a recovery at all, at least by the standards of just a few years ago. Since peaking in the first quarter of 2006 at $11.1 billion, total newspaper ad revenues sank 41% to just $6.6 billion in the first quarter of 2009, according to the Newspaper Association of America.

Newspaper companies reported another round of steep losses with an average 30% decline in the second quarter. If losses continue at this rate, newspapers could see 2009 revenues fall as low as $28 billion; that's about 57% of their full-year peak of $49.4 billion in 2005.

Amid this continuing catastrophic decline, newspaper publishers would certainly welcome stabilization -- but it seems certain the industry will never regain the volume of just a few years ago, as advertisers increasingly turn to the Internet.

Assuming 2009 revenues of $28 billion, a sustained growth rate of 2.4% per year would yield total revenues of just $32.3 billion in 2015.