The weirdly sensical business of weather TV
On most mornings, I wake up to the dulcet, mechanical tones of Amazon’s Alexa reporting the weather of the day.
It is occasionally entirely incorrect, but it is free and it does the job. It reports when a massive, life-threatening tropical storm is barreling toward New York City, for instance. Unfortunately for the weather television business, it is this attitude that has atrophied much of its value-add: For many consumers, information on when it will rain and how hard is readily available through smart phones and other devices at no additional cost.
So who the heck would pay $4.99 a month solely to stream weather news?
Allen Media Company, the business behind the Weather Channel that sees itself as something of a private equity company acquiring media organizations, is betting that people will.
Having bought the Weather Channel from Comcast, Blackstone, and Bain Capital for $300 million in 2018, Allen Media Group last week revealed plans to launch a subscription-video service in the final quarter of this year dubbed Weather Channel Plus. For nearly $5, viewers will get some other news and entertainment channels, but primarily, weather is the core offering. And Allen Media Group isn’t alone! Fox is set to debut its own 24-hour streaming service focused again on meteorology later this year.
It may sound absurd. A few years ago, when the Weather Channel was being sold to Allen Media Company, it was clear that the business was struggling. Advertising was its lifeblood, but consumers were (and still are) cutting cords. “Once in more than 95 million homes, the Weather Channel’s national distribution has fallen over the past decade to just over 80 million homes,” a Wall Street Journal article in early 2018 noted.
But there’s a strange and rather depressing reality as to why investors are seeing opportunity in this niche area of television. Extreme weather events have been on the rise as a result of climate change, reshaping the economy and impacting issues including food prices, home buying, and insurance rates. Western Canada recently faced a record-breaking heat wave as Hurricane Elsa hits Florida Wednesday. Folks are checking the weather daily if not hourly.
Per Michael M. Grynbaum over at the New York Times:
“At CNN, MSNBC and Fox News, average viewership for the first half of 2021 fell 38 percent from a year prior. The audience for the Weather Channel was up 7 percent.
‘All the networks are ramping up for this,’ said Jay Sures, a co-president of United Talent Agency who oversees its TV division. ‘It doesn’t take a rocket scientist to figure out that climate change and the environment will be the story of the next decade.’ One of his firm’s clients, Ginger Zee, the chief meteorologist at ABC News, now has 2.2 million Twitter followers — more than any ABC News personality besides George Stephanopoulos.”
BOX-ING MATCH: Activist investor Starboard Value acquired a stake in digital storage company Box about two years ago. Recently however, the relationship has soured with Starboard saying the company has underperformed, and that it would prefer new members on the board of directors. Box of course has fired back, saying it has tried hard to accommodate the investor. On Tuesday, Box urged investors to vote for the company’s nominees for the board of directors rather than Starboard Values. Box also said that Starboard had been trying to remove CEO Aaron Levie for the past seven months. Read more.
Jessica Mathews compiled the IPO section of the newsletter.
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Crest Rock Partners made a majority investment in CloudNine, a Houston, Tx.-based software suite for legal professionals. Financial terms weren't disclosed.
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- Membership Collective Group, the company behind London-based membership club Soho House, now plans to raise up to $480 million in a U.S. offering of 30 million shares, priced between $14 and $16 per share. Yucaipa backs the firm.
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- Chobani, a Norwich, New York-based yogurt and food company, confidentially filed for an
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- Vistria Group, the Chicago-based private equity firm, raised $2.7 billion for Fund IV.
- Renegade Partners, a San Francisco bay-area venture firm cofounded by Renata Quintini and Roseanne Wincek raised $100 million for its debut venture fund.
- LongWater Opportunities, a Dallas-based private equity firm, closed its third fund with $100 million.
- Battery Ventures, a Boston-based investor, named Sudheendra Chilappagari as a vice president.
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