Saturday, August 11, 2012

The New "Ma Bell" Of Weather

Two companies you may/may not have heard of are in the news. WSI, which is a number of things in the weather business including a private forecasting entity as well as a major player in the TV weather graphics business, is buying Weather Central. Weather Central is WSI's chief competitor in the TV weather graphics business and boasts an increasingly larger stake in private forecasting (energy, aviation, insurance sectors) over the past few years.

WSI is owned by The Weather Channel, which is owned by NBC, which is owned by Comcast.  So, yep, this story has a local angle of sorts.   The Weather Channel (TWC), and ostensibly Comcast, are quickly becoming the Ma Bell of weather as they buy up various "competitors" to their enterprise.  First it was Wunderground just a month ago, followed by WSI's purchase of Weather Central.   TWC is now boasting (according to their website), a 76% share of the US weather audience.

The wunderground purchase stung me since I liked the quality and lack of hype (as well as the lack of ads for their mobile products) surrounding wunderground's products -- they are geared for more hardcore weather followers.

Considering the weather marketplace is made up a number of smaller entities, followed by mid to larger sized fish in the form of Accuweather and Weatherbug, and one gigantic whale in TWC, the "food chain" of weather is a bit altered and somewhat out of balance...especially in the broadcasting and media end of it.  Given the right mix of technology and price, a few of the smaller entities can probably step into the middle levels of the weather food chain and provide some balance...and some needed competition.   It's also possible that one or more of the three other broadcast networks looks into getting into the weather game as well given NBC has as much skin in it as they do.    It also presents an opportunity for someone like Accuweather to step up their game in the graphics business.   Accuweather does provide its own graphics system -- but not to Channel 6 (they use WSI).

All that aside, this purchase isn't just about TV graphics and who has a better 3D street sweep in their graphics.  All of these businesses -- WSI, Weather Central, and Accuweather provide private forecasting services to their clients as well, which is arguably as if not more profitable than their tech gadgets that TV stations play with during the 6 PM news.  There just happens to be one less player in the field as Comcast/NBC/TWC gobble up another competitor.  he Weather Central purchase is more about eliminating a chief rival in the private forecasting and weather technology business...but I do feel it presents a pretty significant opportunity for a startup or two to take off.