The Weather Company has agreed to sell its digital and data assets—including weather.com, a suite of apps, its forecasting technology and the Weather Company brand—to IBM in a deal valued at more than $2 billion, according to The Wall Street Journal. Financial terms were not disclosed by either company.
The deal does not include the TV channel, which will continue to be owned by Bain Capital, Blackstone and NBCUniversal and operate as a stand-alone business. The Weather Channel will now become a client of IBM, licensing weather-forecasting data it once owned.
On the digital side, it shows the value of the products The Weather Company built, mostly through acquisition, and should help IBM make good on its $3 billion commitment to develop Internet of Things-type services.
"The Weather Company's extremely high-volume data platform, coupled with IBM's global cloud and the advanced cognitive computing capabilities of Watson, will be unsurpassed, providing our clients significant competitive advantage as they link their business and sensor data with weather in real time," said John Kelly, svp for solutions portfolio and research at IBM.
But for the TV channel, the future is much cloudier.
"This can't be the end of what they're planning to do with the TV network," said John Swift, president and CEO of North American investment at Omnicom Media Group. "Do they plan to take the TV content and use it as a content engine and syndicate it to other people with weather?"
For now, The Weather Channel plans to handle advertising the same way it has, but the digital sell-off has certainly raised more than a few questions.
"Are we still going to be able to do integrated partnerships with these guys," asked Swift. "Are we still going to be able to have data as part of our negotiations?"
The Weather Channel is attempting to go it alone at a time when the network, once among the most distributed in the country, has had a slew of spats. When the channel began to produce more reality content, DirecTV protested, resulting in a three-month carriage dispute. Last year, Verizon FiOS dropped The Weather Channel altogether in favor of AccuWeather.
Even so, incoming Weather Channel TV network CEO Dave Shull noted that nearly half of all U.S. households tune in to The Weather Channel each month. But he acknowledged the future might be in over-the-top (OTT) services. Earlier this year, the company struck a deal to be carried on Dish Network's Sling TV streaming service.
"With our world class weather experts and thousands of localized versions of the network, we are uniquely positioned to provide the world's best storm coverage as a hyper-local streaming service," said Shull in a statement. "We are continuing to invest in our strategic partnerships with our distributors, advertisers, and emerging technology start-ups."