Case Study: The Weather Company (TWC) Analyzing Business Opportunities that Leverage its Big Data for B2B

4 min readJan 26, 2020

Intro

The Weather Channel (TWC) launched on May 2, 1982, as a 20-hour Weather Forecast TV Channel. Similar to the disruption created by the movement from print to digital books, audio cd’s to the downloadable mp3’s and DVD’s to streaming video, weather consumption was moving quickly from TV to the smartphone. Nielsen reported that the network averaged a five-year low of 211,000 daily viewers in 2013, down from 273,000 in 2012. Due to the consumer’s behavioral change, TWC looked for business opportunities to leverage its data. In 2012, the organization formed a holding company with a broader spectrum of services and replaced the word “Channel” with “Company” to reflect its growing lineup of new digital products. Currently, IBM owns The Weather Company (TWC), and the TWC’s network of over 100 MLN in 2013.

SWOT Analysis

What TWC Data Pool Look Like

Problem Statement

The Weather Company’s first attempt to utilize data as a business via Outsider app with leveraging their weather information was not successful. The Weather Company (TWC) needs to find new opportunities tailored to B2B markets utilizing their Weather Forecast Data and it’s business logistic.

Potential Business Transformation

Weather is a crucial factor that can influence business revenue. TWC has a lot of environmental information that can be monetized and packaged as-tailored to the business solution:

1. Communicae alerts
2. Suggest business-related actions based on the forecast
3. Predict potential business opportunities
4. Prevent business losses

The solution enables businesses to input their data in correlation to the weather points and to receive real-time weather information translated into their business language, weather alerts and predictions, business-related decisions, and business analysis in retrospect.

Competitive Market

B2B Data Utilization Potential

Monetization

The case demonstrates a Travel Agency system integrated with Weather Data API to receive weather forecasts and adjust trip activities.

I am proposing ‘Entitled to the Best’, a management system for Travel Agents and related business activities.

The Travel Agency system offers multiple plans based on the number of active trips that travel agencies handle per month:

Weather Data API charges customers based on the load from their systems. The Travel Agency system tracks weather for every active trip and updates atmospheric information every 5 minutes to offer recommendations. By doing so, users with a “Home Based Agency” plan will generate less traffic than users with the “Agency with Branches” program because they have less number of active trips.

Potential Revenue

Let’s consider users with the Home Based Agency plan and assess estimated revenue.

Home Based agencies and individual agents had an average revenue of $710,000 in 2016 [1].

If the average vacation for a family of 4 costs about $4,500 [2], each Home Based agency organized about 157 trips per year, 13 visits per month.

Assuming that the Travel Agency system updates weather data every 5 minutes per active trip, a single user with the “Home Based Agency” plan will generate 13 trips * 12 requests per hour * 24 hours * 30 days = 112,320 requests per month.

According to the Department of Labor’s Bureau of Labor Statistics for 2016, the number of employed agents was 81,700 [3].

If all of those agents will have accounts in the Travel Agency system, the entire load to the Weather Data API will be 112,320 requests per month * 81,700 = 9,176,544,000 requests per month.

System Flows

WTC & Travel Agency Interaction

Travel Agent Interaction with ‘Entitled to the Best’ Management System

Summary

The goal of this study was to find profitable alternatives to existing business model solutions for Weather Data Monetization. As a result of this case study, I gained a more in-depth insight into the Data as Business Model and its potential.

Citations:

Reference:

The Weather Company: Creating Consumer Apps that Leverage its Big Data. https://hbr.org/product/the-weather-company-creating-consumer-apps-that-leverage-its-big-data/BAB168-PDF-ENG