• by Erik Sass  @eriksass1, March 26, 2010

Two of the hardest-hit traditional media will see their fortunes diverge in 2010, according to analysts who expressed muted optimism for the near-term prospects of broadcast radio, but warned of a fresh round of declines for newspapers.

Neither of the forecasts are particularly cheering, following several straight years of declines at both media.

The first forecast comes from BIA/Kelsey, which 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 issued the prediction in a note to investors where they upgraded publisher McClatchy to a neutral rating, bringing it up to par with other publishers like NYTCO and Gannett.

Recent earnings announcements from these companies suggested that the steep revenue declines that bedeviled them over the last year may finally be tapering off. Still, J.P. Morgan forecasts a total revenue decline of 8.4% at McClatchy.

On Thursday, the Newspaper Association of America released ad revenue figures for the newspaper business in the fourth quarter of 2009, which ended one of the worst years in the history of the medium. 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%.