{"id":19664,"date":"2016-11-18T17:00:42","date_gmt":"2016-11-18T22:00:42","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/weathering-the-digital-transition-rehire-al-roker\/"},"modified":"2016-11-18T17:59:24","modified_gmt":"2016-11-18T22:59:24","slug":"weathering-the-digital-transition-rehire-al-roker","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/weathering-the-digital-transition-rehire-al-roker\/","title":{"rendered":"Weathering the Digital Transition \u2013 Rehire Al Roker"},"content":{"rendered":"

\"Incoming<\/a><\/p>\n

The Weather Company (TWC) is best known for its marquee TV channel, The Weather Channel. For years, viewers across the nation have woken up to Al Roker\u2019s sweet dulcet voice, providing a comforting overview of the weather and building a cult following of loyal viewers.\u00a0 Founded in 1980, TWC is now seeing massive changes in both the amount of digital weather data available and the digital consumption of weather-related information.<\/p>\n

Business and Operating Model<\/u><\/strong><\/p>\n

The first more widely known business model is its B2C offerings such as its TV channel, website, and mobile app. It\u2019s TV business makes money based on advertisements shown between weather program segments and through charging carrier rates to cable providers based on their number of subscribers. TWC\u2019s website and apps primarily make money through banner display advertisement shown alongside its weather-related content. \u00a0As of 2015, TWC had TV distribution to 77% of all US households with more than one TV and charged average carrier rates of $0.11\/month\/subscriber. [1] [2]<\/p>\n

TWC has a second B2B business model offering providing weather information and forecasts for customers in aviation, energy, media, and government. These deals are negotiated on a contract-by-contract basis based on the value customers derive from TWC\u2019s weather data.<\/p>\n

At its core, TWC\u2019s mission is to provide the accurate weather information and forecasts to customers with a side helping of weather inspired-entertainment.<\/p>\n

Challenges<\/u><\/strong><\/p>\n

The biggest challenge to TWC\u2019s business model is the digital accessibility of weather information disrupting its TV programming offerings. In an age of ubiquitous smart phone ownership with easy access to up-to-date weather information, it\u2019s difficult for TWC to keep its TV programming relevant. Because of this, TWC has been facing declining TV viewership and decreasing leverage in negotiations with cable networks [3] [4]<\/p>\n

Opportunities<\/u><\/strong><\/p>\n

While digital disruption is creating new consumer habits and distribution channels, this also creates opportunities for TWC to connect with its users in new ways through its mobile app. TWC has invested a significant amount into developing a compelling mobile application and is now a top 20 app. [5]<\/p>\n

The second major opportunity is related to the increasing amount of weather data available due to the decreasing cost of big data collection, storage, and analysis. The most important service that TWC provides is up-to-date accurate weather forecasts. In the digital age, the value of data is only increasing and because of that TWC has pursued an acquisition strategy to buy companies with unique and valuable weather data sets such as Weather Underground. [6] Because of this investment in data collection, in early 2016 the Weather Channel sold its B2B digital business to IBM for $2.3B to be incorporated into IBM\u2019s Watson B2B offering. Now through leveraging Watson\u2019s machine learning algorithms, the TWC offers over 26 billion weather forecasts per day. [7]<\/p>\n

Lastly, in addition to big data analysis becoming cheaper, much more digital customer data has become available for companies to use to create and capture value through improving the advertisements.\u00a0 For TWC\u2019s, one of the most important new sources of digital data has been the ability to cost-effectively geo-locate web users to provide weather triggered, locally targeted digital advertising, which in turn has allowed them to attract more users and charge significantly higher rates for their advertisements.<\/p>\n

The Plan Going Forward<\/u><\/strong><\/p>\n

The company\u2019s current plan for navigating the digital transition include the following tow major initiatives:<\/p>\n