• by Erik Sass  @eriksass1, June 19, 2008

The outlook is grim for newspapers in the United States in the near term, according to PricewaterhouseCoopers' Global Entertainment and Media Outlook, which contains forecasts for media from now to 2012. On the positive side, consumer magazines and radio are expected to hold their own, with modest growth in the U.S., while out-of-home will continue its recent surge.

The good news first: PwC predicts that total consumer magazine revenues--including advertising and circulation--will grow at an annual compounded rate of 3.8% from 2007-2012, increasing from $24.1 billion to $29 billion. That's good news for a traditional medium negotiating a sometimes rocky transition to Internet publishing.

No surprise--a key part of the growth for consumer mags will come from digital ad revenues, including magazine Web sites, projected to grow from $342 million in 2007 to $2.4 billion in 2012--a roughly 600% increase. Print advertising is also expected to grow, increasing 16% from $13.7 billion in 2007 to about $16 billion in 2012.

After a rough patch in 2008-2009, radio will return to revenue growth in 2010, according to PwC--which sees long-term growth of 5% from 2007-2012, increasing from $21.1 billion to $22.2 billion. Things will get worse before they get better, however, with a predicted 3.2% drop in 2008 followed by another 1.9% drop in 2009.

Out-of-home is expected to continue the strong growth of recent years with a 7% annual compounded growth rate from 2007-2012. Overall, PwC forecasts U.S. out-of-home revenues rising 41% from $7.3 billion in 2007 to $10.3 billion in 2012. This growth will be driven, in large part, by the increasing use of digital billboards and out-of-home video displays.

Unfortunately, newspapers will not be sharing the good fortune, at least not at first. PwC predicts that the slump in U.S. newspaper revenues will continue through 2009 before finally stabilizing in 2010. That will be followed by modest growth in 2011 and 2012, as growing Internet revenues finally begin to make up for losses on the print side.

But newspaper revenues will still come out about 4% smaller in 2012 than they were in 2007, dropping from roughly $55.8 billion to $53.8 billion. The industry is currently in the steepest part of the decline; according to PwC, from a high of almost $60.2 billion in 2006, revenues will plummet 15% to just $51.2 billion in 2009.