NBC, Nexstar Investing In Online Expansion For Local TV Stations

With local TV stations’ sites bringing in more ad revenue, some companies are rethinking their web strategy. For NBC Universal (NYSE: GE) and Nexstar, that means increased investments in their respective local station web operations, as they explained during the recent Television Bureau of Advertising annual conference. Some details from MediaPost:

NBCU, which owns and operates 10 local TV outlets, has budgeted for an additional 30 sales executives dedicated only local channels’ online ad sales. At the moment, NBCU’s local media division currently generates 2.5 percent of its revenue from digital ads; the unit hopes to grow that share to 5 percent in 2009. Speaking at the TVB conference, John Wallace, NBCU’s president-local media, said that right now the company has about 40 sales people handling its 10 markets; no one station has more than four sales staffers. NBCU is selling its Miami and Hartford stations, in part, with this kind of expansion in mind. Although the additional 30 staffers are planned, Wallace cited unspecified “recruitment” issues that might prevent that from hitting that mark. Aside from staffing up, the company has other plans to expand its stations’ web business. Earlier this year, the local media division acquired broadband entertainment and lifestyle site LX.tv, which it has used not just on the web, but to support its HD channel and, in New York City, as part of its digital out-of-home “yellow cab TV” initiative.

Nexstar, which has 50 station O&O’s in 29 mid-size markets, found that while it derived 2 percent of its 2007 revenues from online ($5.1 million out of a total $266.8 million) , 25 percent of the bonus compensation that station general managers receive is predicated on how their stations do online. Chairman-CEO Perry Sook, who appeared on the same TVB panel with Wallace, highlighted the bonuses as a sign of the significance of online to local TV and his desire to transform the company’s identity from a broadcaster to a “multiplatform ad services business.” Rather than concentrate on staffing levels, Sook said he hopes that by creating standalone, community websites, as opposed to simply building and rebuilding web-based extensions of its TV stations, Nexstar can realize greater ad benefits.