Computer and data giant IBM announced today that it’s purchased The Weather Company’s digital assets in a multi-billion dollar deal. IBM is now the proud owner of weather dot com—the world’s most popular source for finding out what THIS! is—as well as several other ventures. The Weather Channel was not included in the deal, and the television network will now operate on its own.
The Weather Company as it stood before the purchase included flagship television network The Weather Channel, three popular online hubs—weather dot com, Weather Underground, and Intellicast—and WSI, which is the company’s data and private forecasting wing. IBM’s new toys include the entirety of The Weather Company except for The Weather Channel, which will continue to be held by its current owners, including NBC/Comcast and several venture capital firms.
While IBM seems like a strange buyer for the biggest name in weather nerdiness, it makes perfect sense—weather is big business. Just about every industry that exists relies on weather data and forecasts to make logistical decisions.
The success or failure of vast swaths of the agriculture industry is reliant on the intricate twists and turns of our atmosphere. Every mode of transportation—whether it’s air, sea, land, or space—can find itself crippled by hazardous weather.
David Kenny, CEO of The Weather Company, gave the New York Times an example of how IBM can use this new-found treasure trove of weather data to help people and businesses make decisions in the future:
If combined with Watson, a computing system skilled at parsing unusual types of data and making statistically based decisions across a range of industries, the data could be more valuable, he added. “We can process it better,” Mr. Kenny said. “Forecast whether someone should fly or delay a trip. Exactly where to evacuate people from a hurricane. Be more cognitive.”
IBM gobbling up The Weather Company for its sweet, sweet data is mostly inside baseball, coming as interest to people within the weather industry and businesses that will benefit from the acquisition. The more interesting story in all of this is what IBM didn’t purchase: The Weather Channel.
In a statement sent out by email this morning, Weather Channel CEO David Shull announced that the television network would “operate as a standalone business.”
The Weather Channel will continue to be owned and supported by our existing shareholders — Bain Capital, Blackstone and NBCUniversal — and operate as a standalone business.
Each month, almost half of all American households tune in to The Weather Channel network for coverage of severe weather, daily forecasts, and the science behind the weather. With our world class weather experts and thousands of localized versions of the network, we are uniquely positioned to provide the world’s best storm coverage as a hyper-local streaming service as well. We are continuing to invest in our strategic partnerships with our distributors, advertisers, and emerging technology start-ups.
The Weather Channel operates as a distinct and separate business with its own leadership team, which enables this to be a smooth and seamless transition. We believe a bright future lies ahead for the television business as the most trusted source of weather information.
The previously-linked New York Times article notes that The Weather Channel will now lease its weather information from The Weather Company, which adds insult to injury to the Atlanta-based television network.
From the moment it launched in May 1982, The Weather Channel has been a driving force in how Americans receive and perceive weather information. The network was created with a simple purpose: weather information whenever you want it. Since its heyday in the 1990s, the network has seen its fair share of struggles, including an ugly public battle with DirecTV, an abrupt breakup with Verizon FiOS, a decline in viewership due to the rise of mobile apps, and a decade-long foray into Discovery-esque reality programming that alienated its core base of viewers.
Rumors of The Weather Channel’s sale and/or demise have swirled for years. Last year, a report surfaced that the network’s owners were looking to get out of the relationship, and this past summer, Comcast slashed its valuation of the network to just $86 million, down from $335 million in 2014.
Last month, The Weather Channel announced its decision to come home to its roots, dumping reality shows like Scruffy Huffing Woodsfest in favor of all weather, all the time, the original format that built the network to the household name it is today.
In an episode of WeatherBrains shortly after the September announcement, network president David Clark said that, in order to survive in the face of competition from apps and websites, The Weather Channel has to focus on one thing and do it well, and that one thing is the weather.
It’s a smart move. Weather apps and quick forecasts only give you so much information, and there’s clearly a growing thirst among the public for a deeper understanding of the forecast—the why and how of the weather, not just the end result.
Now that The Weather Channel is on its own, we’ll see if going full-on weather geek is a winning strategy.