The Weather Channel: The Improbable Rise of a Media Phenomenon- A Dot-Com that Worked: www.weather.com

by Frank Batten

Baby steps into the dot-com world
By now, one medium may seem conspicuous by its absence from this branding story: the Internet. I can't claim that we were among the pioneers of the Internet, but I think we qualify as early homesteaders. In the early 1990s, Alan Galumbeck was becoming intrigued by e-mail. Using a small commercial Internet provider in Atlanta, Galumbeck began communicating by e-mail with a number of key technical vendors. This traffic grew steadily, and Galumbeck decided that The Weather Channel needed a full-time Internet connection. He learned about something called "domain names"—"addresses" for computer nodes on the Internet-and decided to reserve a few, just in case we ever wanted them. "Landmark.com" was already taken, so Galumbeck secured "landmark.net" for the corporate parent. Then he reserved "travel.com" for the Travel Channel, which was then still in our fold, and "weather.com." He makes no claim to being a visionary. "At the time that I got those domain names," he admits, "we had no plans to put up a Web site. I thought we might use them for e-mail, some time in the future."

Frank Batten

It fell to a newcomer, who arrived several years later, to figure out what to do with "weather.com." Debora Wilson had worked for Bell Atlantic for nearly fifteen years, the last five developing marketing services for the Baby Bell's interactive and cable TV groups. She signed on in the summer of 1994 as The Weather Channel's senior vice president for "Enterprises." Enterprises was then a common term in the cable industry for new business development groups, which tended to be a hodgepodge of going concerns, good ideas, and wishful thinking. And The Weather Channel's Enterprises group, as Wilson recalls, was no exception:

We had the radio network in there. We produced, distributed, and marketed weather videos, books, and calendars. We had 1-800-WEATHER, where you could call up and get weather information over the phone. We were dabbling in interactive television, and we wanted to get a Web site up and running.

I think that to begin with, all these things were pretty much of equal interest, because they were all small. It was just a collection of start-up things that we were experimenting with, to see which ones might become revenue-generators—and eventually, hopefully, net income generators—for The Weather Channel and Landmark.

Perhaps highest on Wilson's priority list was the Internet. On Groundhog Day 1995, The Weather Channel became the official weather provider to the online service CompuServe. Within an hour of this launch, The Weather Channel received literally hundreds of e-mails from CompuServe aficionados, welcoming TWC to cyberspace. Most came from CompuServe buffs who were also fans of The Weather Channel." We're so glad you're part of CompuServe," as Wilson recalls a typical note. "Now we have great weather information!"

An entirely new kind of conversation had begun—much more personal and interactive than anyone at The Weather Channel had experienced up to that point. Wilson, in particular, was struck by the very different nature of the e-mail messages we received. They were intimate, immediate, and fresh. She printed out the unexpected torrent of communications, tacked them up on the wall in a conference room, and invited the entire company to come experience this strange new phenomenon. It was hard to imagine more convincing evidence of the strength and trustworthiness of The Weather Channel brand.

Shortly afterward, Cathy Daly—a young product manager in Wilson's area—approached Wilson with an informal proposal to build The Weather Channel's own Web site. In a previous job, Daly had put together a modest Web site for a client, and she was convinced that weather.com could become something special. Using borrowed resources—roughly a third of her own time, a third of an editor's time, and a third of a technology person's time—Daly put together the first iteration of weather.com, which launched in April 1995.

Like almost all other Web sites at that time, weather.com began without any advertising—no revenue of any kind. The Internet had a strong anti-advertising culture at that point, although many sites were "ads" in their entirety for their sponsoring companies. But Web-based magazines began taking ads shortly thereafter and commanding (or at least asking) substantial sums for those ads. At a time when cable TV's cost per thousand viewers was in the $5 range, an electronic magazine like HotWired asked $150 per thousand. "I remember when HotWired made that announcement," says Wilson. "I photocopied and distributed it. Finally, an industry was starting to happen."

But our internal model, again, was borrowed resources. Rather than hire a separate sales force for weather.com, Wilson and her colleagues more or less begged the cable network's salespeople to sell Internet ads. Few buyers were interested in the Internet at that time, however, and the sales force's incentive structure meant that the cable network would always get their best effort. Finally, the Chemical Bank bought an ad for a grand total of $1,000. "We were just thrilled," Wilson recalls. "We celebrated. It was just an incredible thing that somebody was buying weather.com."

When we launched weather.com, the Internet was still a clunky, unformed, poorly understood medium. Within a year, though, it had become a much more prominent subject of public discussion, particularly in media circles. We were getting a surprisingly large and enthusiastic response from users of weather.com even though we were operating it on a lean diet. We were providing largely warmed-over information and graphics from the cable network. This seemed right, because the site itself had almost no revenues and nobody had yet defined an appealing business model for it.

My son, Frank Batten, Jr., who was then heading up a new ventures unit for Landmark, had become a frequent user and student of the Internet and was searching for Internet-related business opportunities for the company. He had been enlightening me on the potential of the Internet as a disruptive technology—in other words, a new technology that threatened to upset existing ways of doing business—for most of our media properties, particularly for The Weather Channel. He thought we should make a major commitment to develop weather.com, and do it promptly while we had a large head start in the weather venue. Dubby Wynne agreed and asked Mike Eckert to bring Debora Wilson and Cathy Daly to meet with us in Norfolk to discuss their recommendations for developing the Web site.

According to Wilson, that meeting was a defining moment for weather.com:

Cathy and I presented our resource requirements, and we thought we were being rather aggressive in that context. I don't know who said what, but collectively, the two Franks and Dubby said to us, "We don't think you are thinking aggressively enough about what this could be. Who knows what weather.com could be? But it's clear that it at least has the potential to become something very important. You really need more than this, and you need to run like heck."

Wilson was taken aback. She had expected to be challenged, and to have to defend their resource proposal. "Instead," she recalls, "we got the opportunity to go back to them within weeks with a much stronger plan, which set us off on a growth curve that was substantially different from what it would have been otherwise."

The Web site hit many bumps in the road. For example, it took a while for Wilson and her colleagues to educate the rest of The Weather Channel organization about the purpose and potential of weather.com. An intuitive "brander," Wilson began talking about cross-promoting—The Weather Channel steering viewers to weather.com, and vice versa—but she encountered either indifference or resistance. As Alan Galumbeck explains:

When the Web site was launched, Debora couldn't get The Weather Channel programming people to put the URL, www.weather.com, on the cable network's IDs. They kept saying, "But people won't know what it is. My response was, "Those who can use it will know what it is. But it was months and months before Debora was finally able to persuade the TV people to put the URL on all of our network promotion material.

Sometimes internal staff complained that weather.com enjoyed favorite-child status. And in, say, 1997, it was indeed easier for weather.com to add another programmer or salesperson than it was for the cable network to add another master controller. But the Web site was in the building phase of its existence and needed to call upon a disproportionate share of our development resources. When people asked me about our investment priorities, I had a ready answer. I pointed out that in the early 1980s our fledgling cable network "stole" resources from our existing media properties just as, in an earlier day, our construction of cable systems was funded by our newspaper businesses. Investing for the future—even when you can't really see the future clearly—is the essence of a growing business.

The fact that weather.com was almost totally integrated into the fabric of The Weather Channel offset most such jealousies. Something like two-thirds of the people who made weather.com go also had important responsibilities with the cable network, so "us versus them" attitudes were relatively rare.

By mid-1998, only three years after its launch, weather.com was logging 90 million page views per month, which made it one of the top thirty Web sites in the world. By September of that year, the page view count had exceeded 150 million—a 67 percent increase in just three months. We had projected revenues of $6 million for 1998, and we were pleasantly surprised to find that we would exceed that goal. By the end of the year, we were nineteenth in Relevant Knowledge's world rankings of Web sites.

For these reasons and more, 1998 became known internally as the "Wonder Year" at weather.com. And more good news came early in 1999, when we signed a three-year deal with America Online. Under the terms of the agreement, The Weather Channel became the exclusive branded weather content for three key Internet portals: AOL, CompuServe, and Netscape. All three listed prominent links to weather.com, which promised to drive still more traffic to our own site.

As of this writing, weather.com delivers 3.5 billion page views per year to an average of 10 million unique (different) viewers per month. This count includes only viewers who go directly to weather.com. If you add viewers who enter through AOL, the number rises to 14 million. Our partnership with AOL is a powerful one, and may serve as a model for future partnerships. We are continuing to add more depth by adding content in topics such as gardening, travel, driving, and recreation, which are important in people's daily lives and which are tangentially related to weather. This kind of depth is possible only on the Web. As Wilson explains,

Of course, we always look through the lens of weather. But we have added things like airport delays, climatology databases, hour-by-hour forecasts, ten-day forecasts, and thousands of current conditions and forecasts for international cities. These are things that could not be presented on The Weather Channel, because there's not enough time and space.

Perhaps as a result of this depth of content, our personal relationship with users is remarkable. We receive between 7,000 and 10,000 e-mails a week from weather.com users, and we try hard to answer all of them within a reasonable time. (Most inquiries are frequently asked questions, and we use interactive tools that allow us to respond to many of them automatically.) The staff at weather.com values this steady flow of communication because it tells them what their consumers want from the Web site. More generally, we believe that these personal contacts go a long way toward creating the kind of identity relationship with our consumers that Steve Schiffinan—The Weather Channel's executive vice president for marketing, and an expert in branding—tells us is at the heart of brand development.

From its inception, weather.com was closely tied into the infrastructure of The Weather Channel. This closeness had countless advantages at the outset. By using The Weather Channel's meteorological, marketing, sales, and back-office resources, the new Web site was able to get up and running quickly with a useful service.

It gradually became apparent, however, that before weather.com could achieve its full potential, it had to be freed from the arms of its parent. This reflected my own belief, based on long experience at Landmark, that potentially competitive units or products usually need substantially separate organizations. And so, a half-decade after weather.com first took to the wires, we made it a separate division of The Weather Channel. Debora Wilson became its president, reporting to The Weather Channel's CEO. The new division would continue to share certain staff functions with The Weather Channel, but all other functions—especially those with potentially competitive goals and demands, such as sales—were made independent of each other.

As I recall the relevant discussions that led up to this change, all the key players agreed intellectually that we would not hog-tie the new venture. We wouldn't be driven by concerns that it might compete with The Weather Channel, or cannibalize its audience, or do some other bad thing to the parent. I recall reiterating that the Big Three networks made a huge mistake when they decided initially to stay out of cable programming for fear of cannibalization. Everyone seemed to understand and agree.

But intellectual agreements only go so far. The "liberation" of the Web site made this point very clearly. When it came to cutting the ties and actually setting weather.com free, we saw considerable internal resistance, and from many more sources than we expected. Business is sometimes about logic and calculation, but it is just as often about emotion and gut instinct.

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Excerpted with permission from The Weather Channel: The Improbable Rise of a Media Phenomenon, Harvard Business School Publishing, 2002.

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