Outlook Brightens for Weather Channel
Once the butt of jokes, The Weather Channel and its websites now have a huge international following and are currently attracting multibillion dollar valuations
They laughed back in 1982 when Frank Batten told the world that he was launching a round-the-clock television network devoted entirely to the weather.
But with valuations of $5bn (£2.5bn) floating around The Weather Channel, nobody thinks it's funny any more.
Batten's Virginia-based company, Landmark Communications, this week appointed JP Morgan and Lehman Brothers to explore strategic options for its assets - the biggest of which is The Weather Channel. Analysts say the business is red hot property.
"There are very few of these independent cable networks out there," says Derek Baine, a cable television expert at consultancy SNL Kagan in California. "This is a very rare successful integration of new media and old media."
With swirling cloud graphics, a tickertape of temperatures, picture-perfect presenters and an ultra-bland jazz soundtrack, The Weather Channel delivers the local forecast six times hourly to 94.7m American households.
It's hardly Emmy award-winning stuff - forecaster Vivian Brown was waffling endlessly about cold conditions this week: "Even in the sunshine state, people are feeling the chill … I'm sure those extra heaters have been running today around the country."
Nevertheless, SNL Kagan reckons the channel made an estimated profit of $110m last year. In a decent market, cable television operators sell for about 14 times cashflow - which suggests that the channel is worth some $1.5bn.
But the real excitement is about The Weather Channel's websites - Weather.com and a clutch of offshoots, including British-focused Weather.co.uk. These are the first port of call for millions looking for a quick meteorological snapshot and have some nifty features - they provide a free tailored forecast for any postcode at the touch of a button.
The online tracking service Comscore rates Weather.com as the 16th most popular website in the US, visited by 34 million unique users monthly. The channel also feeds forecasts to a host of top-tier online sites including Yahoo and MSNBC.
Baine estimates the channel's internet properties earn revenue of $100m annually. To put this in context, Facebook generated income of $150m this year and was valued at $15bn in a recent deal with Microsoft.
"That's a lot of money for a web-based company to generate," says Baine. "I could see $5bn for the channel and the site together."
Nobody has openly declared an interest yet. But Rupert Murdoch's News Corporation could be a contender, as could Time Warner, Comcast or General Electric, which owns NBC. Profitable, fully functioning websites with a huge international following are the holy grail in the present media marketplace.
A sale will be long-awaited vindication of an idea which was initially the brainchild of John Coleman, a weatherman on the US breakfast show "Good Morning America". Frank Batten, who took on the challenge, recalled in a 2002 book, "The Weather Channel: the improbable rise of a media phenomenon", that the reaction was deeply sceptical when the venture was unveiled at a press conference at New York's Park Lane Hotel in 1982.
"The assembled reporters simply couldn't grasp why we would want to waste a scarce transponder on such a dull subject. Most couldn't get beyond the misperception that we were expecting people to watch weather over and over again," he wrote, adding that the announcement "unleashed the first trickle in what would become a flood of jokes about, even ridicule of, The Weather Channel".
The programming lineup goes beyond mere weather reports. There are ski forecasts and traffic forecasts. There's the curiously compelling "Storm Stories" which recreates dramatic situations in which members of the public get stuck in horrible weather conditions. And there's "Forecast Earth" which explores the implications of global warming.
Oddly, the concept has never caught on in Britain. In spite of the British pre-occupation with moaning about the weather, the Weather Channel's UK version lasted a mere two years before Landmark decided it wasn't viable in 1998.
But it is firmly entrenched in American culture - so much so that the hit crooner Sheryl Crow immortalised the network in a 2002 album track, "Weather Channel":
"Can you make it better for me?
Can you make me see the light of day?
Because I got no one
Who will bring me a big umbrella
So I'm watching the Weather Channel
And waiting for the storm."
But with valuations of $5bn (£2.5bn) floating around The Weather Channel, nobody thinks it's funny any more.
Batten's Virginia-based company, Landmark Communications, this week appointed JP Morgan and Lehman Brothers to explore strategic options for its assets - the biggest of which is The Weather Channel. Analysts say the business is red hot property.
"There are very few of these independent cable networks out there," says Derek Baine, a cable television expert at consultancy SNL Kagan in California. "This is a very rare successful integration of new media and old media."
With swirling cloud graphics, a tickertape of temperatures, picture-perfect presenters and an ultra-bland jazz soundtrack, The Weather Channel delivers the local forecast six times hourly to 94.7m American households.
It's hardly Emmy award-winning stuff - forecaster Vivian Brown was waffling endlessly about cold conditions this week: "Even in the sunshine state, people are feeling the chill … I'm sure those extra heaters have been running today around the country."
Nevertheless, SNL Kagan reckons the channel made an estimated profit of $110m last year. In a decent market, cable television operators sell for about 14 times cashflow - which suggests that the channel is worth some $1.5bn.
But the real excitement is about The Weather Channel's websites - Weather.com and a clutch of offshoots, including British-focused Weather.co.uk. These are the first port of call for millions looking for a quick meteorological snapshot and have some nifty features - they provide a free tailored forecast for any postcode at the touch of a button.
The online tracking service Comscore rates Weather.com as the 16th most popular website in the US, visited by 34 million unique users monthly. The channel also feeds forecasts to a host of top-tier online sites including Yahoo and MSNBC.
Baine estimates the channel's internet properties earn revenue of $100m annually. To put this in context, Facebook generated income of $150m this year and was valued at $15bn in a recent deal with Microsoft.
"That's a lot of money for a web-based company to generate," says Baine. "I could see $5bn for the channel and the site together."
Nobody has openly declared an interest yet. But Rupert Murdoch's News Corporation could be a contender, as could Time Warner, Comcast or General Electric, which owns NBC. Profitable, fully functioning websites with a huge international following are the holy grail in the present media marketplace.
A sale will be long-awaited vindication of an idea which was initially the brainchild of John Coleman, a weatherman on the US breakfast show "Good Morning America". Frank Batten, who took on the challenge, recalled in a 2002 book, "The Weather Channel: the improbable rise of a media phenomenon", that the reaction was deeply sceptical when the venture was unveiled at a press conference at New York's Park Lane Hotel in 1982.
"The assembled reporters simply couldn't grasp why we would want to waste a scarce transponder on such a dull subject. Most couldn't get beyond the misperception that we were expecting people to watch weather over and over again," he wrote, adding that the announcement "unleashed the first trickle in what would become a flood of jokes about, even ridicule of, The Weather Channel".
The programming lineup goes beyond mere weather reports. There are ski forecasts and traffic forecasts. There's the curiously compelling "Storm Stories" which recreates dramatic situations in which members of the public get stuck in horrible weather conditions. And there's "Forecast Earth" which explores the implications of global warming.
Oddly, the concept has never caught on in Britain. In spite of the British pre-occupation with moaning about the weather, the Weather Channel's UK version lasted a mere two years before Landmark decided it wasn't viable in 1998.
But it is firmly entrenched in American culture - so much so that the hit crooner Sheryl Crow immortalised the network in a 2002 album track, "Weather Channel":
"Can you make it better for me?
Can you make me see the light of day?
Because I got no one
Who will bring me a big umbrella
So I'm watching the Weather Channel
And waiting for the storm."
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