They have a really nice website.
More after the jump.
From Knowledge@Wharton:
Today's Forecast for the Weather Business: Increased Revenues and a Focus on Innovation
Everybody talks about the weather, but these days a lot of people are also figuring out how to make money off it. In many different ways -- on cell phones and landing pages, at the B2B level, as a hedge tool -- weather is assuming a prime spot in the most innovative parts of the economy.In addition to the weather forecasters who sell proprietary information to commodities traders, MDA in Maryland and Commodity Weather Group are examples, you have those who specialize with insurance companies as clients. And then there's The Climate Corporation which is sort of a hybrid:
In recognition of the general public's appetite for weather news and information, Facebook, for example, is putting weather forecasts on its event and other pages. Google has recently made a move to leverage weather by winning a patent for a new advertising system that bases its content on the global position of the user and corresponding weather conditions.
And The Weather Company -- a weather media firm based in Atlanta -- is parlaying its devoted fan base and scientific muscle into a variety of products and services, including original broadcast and web programming, apps, a content deal with Twitter and a developing line providing weather data to foreign governments.
Weather data once fell mainly under the government's National Weather Service. But the field of commercial weather has grown to include 350 companies whose combined annual revenues in the last two years has increased by 50% to an estimated $3 billion a year.
There are practical reasons for weather's ascent -- including more air travelers and more people seeking a forecast before leaving for the weekend. Business has a vested interest in weather as well: One study found that a third of the U.S. gross domestic product is directly or indirectly affected by forces of weather or climate.
"Private weather services are being fueled both by the fact that there is a real economic imperative for better forecasting, but also, it's one of those things that feeds on itself," says Wharton marketing professor Robert Meyer, co-director of Wharton's Risk Management and Decision Processes Center. "There is a much higher awareness than there used to be. As bad as they are, big events like a major snowstorm or hurricane are enormous publicity vehicles for The Weather Channel. Consequently, once you get used to watching weather services, and as people begin downloading weather apps, there is a much bigger supply."
Heightened interest comes, too, from the fact that weather has unfolded lately with an irresistible dramatic narrative. "The weather has been almost like an exciting sports season, a big rivalry with a lot of last-minute shots," says Jonah Berger, Wharton marketing professor and author of a new book titled, Contagious: Why Things Catch On. "In the past, there wasn't the frequency of major events or unusual situations that there has been recently."
Because of the growing debate over climate change, weather "has more political edge than it did before," Berger adds, "but I'm not sure that's the reason people talk about it more. I just think people are always looking for surprising new things, and the weather has become much more surprising lately. One big storm makes every following storm get more attention. People wonder, 'Will it be bigger than we thought?'"
Weather, Inc.
It is difficult to calculate the size of the entire climate- and weather-related industry, since many of these companies are privately held. But Rich Jeffries, director of the COMET program of the University Corporation for Atmospheric Research (UCAR), estimates gross sales at $3 billion, and the worth of the entire industry at $6 billion. Entities range from small consulting companies to larger commercial forecast groups -- including media firms such as The Weather Company -- serving the energy, agriculture, building, insurance and other sectors....
....Have recent strategies paid off? The Weather Company -- owned by Comcast, Bain Capital and the Blackstone Group -- does not disclose financials. But asked about revenue, Kenny says: "Our ad market is more digital than TV. TV is growing, but digital is growing faster. I would say it's good, healthy double-digit growth across the company."
Managing Weather Risk
If the public appetite for all things weather is lifting the Weather Company's fortunes, volatility of the weather itself has buoyed one sector of the financial markets: weather derivatives. Since the first over-the-counter trade in 1997, weather derivatives have been marketed to utilities, insurance companies, hedge funds and others as a way of managing risk.
In 1998, the total weather derivatives market was estimated at $500 million, according to a 2000 paper for the Wharton Financial Institutions Center co-authored by Francis X. Diebold, center co-director. In 2011, the market had grown to $12 billion, estimates business consulting firm PwC.
"The driver of the business is people understanding that while you can't manage the weather, you can manage the financial implications of the weather," says Tim Andriesen, managing director of agricultural commodities and alternative investments for CME Group, the Chicago-based futures and options firm. Sports presenters facing rain, utilities dealing with temperature fluctuations, retailers whose shelves are stocked with merchandise that may only sell in a heat wave can use weather derivatives to mitigate risk.
Among CME's products: snowfall futures, hurricane futures and options. Most buyers are institutional, but a few are individuals, says Andriesen. "I think that from what we see, it's a bit cyclical with the prevalence of weather events. When there is volatility in the weather, our business picks up. When there is not, it slows down."...MORE
March 2011
Google Ventures' next big bet: Weather insurance (GOOG)
We had a few mentions of WeatherBill early in this blog's life but I couldn't figure out how to make money off their output, it looks like a product made for selling, not for buying. Links below.March 2011
From Fortune:
Together with Khosla Ventures, Google announced an investment of $42 million into WeatherBill....
"WeatherBill: Is It the Riskiest Startup Ever?" (GOOG)
Oct. 2011
"Geek Farmers Gamble on Global Warming" (GOOG)
