the Forecast Calls for Change

BY JON LAFAYETTE

Never visit the Weather Channel on a rainy day without taking the proper precautions.

After all, this is a business built on delivering accurate information about the elements. Damp hair indicates a failure to tune in to the cable channel or its local digital service Weatherscan, or to log on to its website, or to heed a weather update via e-mail, pager or Palm Pilot. On all those platforms, Weather Channel converts the need to know if it's going to rain into revenue.

On one such day, everyone entering the company's headquarters just outside Atlanta seemed to be holding a blue and white Weather Channel umbrella. Bill Burke carried one when he arrived at the office that morning. The president and CEO of the Weather Channel Companies for 14 months, Burke isn't a weatherman, but he knows the forecast.

Noting that even his kids expect him to know what's on the weather front, he said, ?It's bad if I show up wet.?

Burke got his first taste of the weather business during a short stint running Portland, Maine-based RSN, a TV and Internet company serving the resort and outdoor sports market. There he saw how snow, or the lack of it, could make or break a ski season. At 37, Burke is now in charge of a host of businesses devoted to delivering forecasts via several media platforms. There's the Weather Channel network; weather.com; international ventures; Weather Services International, which provides weather data to businesses; and various digital cable, radio, newspaper and interactive TV products.

?It's a very complicated set of businesses. A lot of the challenges you'd find at much bigger companies are all imbedded in there,? said Decker Anstrom, president of parent Landmark Communications. ?It's an interesting leadership challenge.?

In Burke, Landmark has an executive with media running in his blood. His father Dan was the longtime president of Capital Cities/ABC, and his older brother Steve is president of Comcast Communications. ?I remember reading Broadcasting magazine in first grade,? he said. (Another media generation may be coming up. Once, after being told that a storm had turned into a hurricane, Burke's 8-year-old son Chris replied ?business is looking up.?)

Prior to his stint at RSN, Burke worked at Time Warner and Turner Broadcasting, holding titles including president and CEO of news and information at Time Warner Digital Media, and president of TBS Superstation and Turner South. He also led the development and launch of Turner Classic Movies.

It was his career at Turner that brought Burke to the attention of Anstrom, who'd left his post as president of the National Cable Television Association to head up the Weather Channel in 1999. ?We kept hearing about this young guy at Turner who could do anything,? Anstrom recalled.

When Anstrom moved to the Weather Channel it faced several challenges. As an independently owned cable channel, it had to secure long-term carriage agreements with distributors, Anstrom explained. It also needed to strengthen its management team, focus on opportunities and reinvigorate the network by giving it a more contemporary look and feel.

When one of the channel's founders, John ?Dubby? Wynne, retired in 2001, Anstrom succeeded him as president of Landmark, which also owns TV stations, newspapers and Internet businesses. To replace himself, Anstrom hired Burke.

?He was someone who really had the capability to take the next step in terms of fully realizing what the growth opportunities were for the analog network itself,? Anstrom said. ?I think we believe there's a lot of growth, particularly in the ad sales side for the Weather Channel Network, that hasn't been fully realized.?

Burke's boss while he was at Turner said that Anstrom made a good hire. ?Bill has a great understanding of doing business,? said Brad Siegel, former president of Turner Entertainment. ?Whether he's in television or manufacturing, any business, he approaches it with passion and a great analytic sense.?

Siegel added that Burke has a good way with people who work for him. Burke was responsible for staffing Turner Classic Movies and showed a ?great sense of people and their skills,? Siegel said, adding that most of them are still at TCM today. ?He's very smart but doesn't have to wear it on his sleeve. He gets you thinking and he's motivating.?

One way Burke is making sure Weather Channel staffers are attuned to the company's goals and priorities is with a series of ?Bagels with Bill? sessions, which he's been holding two or three times a month since November. At these gatherings a dozen or so staffers, ranging from company veterans to new hires and representing all departments and disciplines, get to pepper the president with questions.

?I learn a lot about what's working and not working for people,? Burke said. ?People have the opportunity to hear what I'm thinking about and come with questions and concerns.?

What Burke finds himself thinking most about these days is how he'll breathe new life into the now two-decade-old Weather Channel. During the media recession of 2000 and 2001, the channel was hit particularly hard. Ratings were flat to down.

Landmark is stingy with financial information and all Anstrom would say about the channel's financial performance is, ?Like every cable network we were affected by the ad recession of 2001. That turned around significantly in the fourth quarter, and we're projecting nice growth.?

Kagan World Media estimates that Weather Channel's ad revenue fell from $170.4 million in 2000 to $144.4 million last year. With a monthly license fee of less than 10 cents per subscriber, the network's total revenue slid from $234.3 million in 2000 to $229.9 million in 2002.

?It was a down time for everybody,? Burke said. ?My sense was that we were probably hurt disproportionately and not getting the value for what is a pretty attractive audience.?

To a certain extent calm skies darkened the channel's financial forecast. ?With us it's kind of like news networks with breaking news,? Burke said. ?The weather was quiet. We hadn't had a hurricane in almost three years. But I think we also weren't doing as much as we could have to counter it.?

Though not a news network, Weather Channel is an information venue. While CNN, Fox News Channel and MSNBC all made investments in their on-air look and programming, Weather Channel pretty much stood pat. Instead it invested in other areas, such as Latin America, and on new technologies, including the Web and wireless.

?The biggest change I've tried to instill is to make sure that we shifted more of our focus to the network side of the business,? Burke said. ?We were getting pulled in so many different directions.?

Weather Channel has indeed updated its on-air look. But Burke is also out to create more differentiated programming throughout the day, from a new morning show to launching the channel's first long-form prime-time series, Storm Stories, in January.

?I inherited the plans to do Storm Stories, but got involved in the actual execution and launch, and we're seeing very tangible results from that,? Burke said. ?Until the war started we were having our best first quarter in five years. A combination of Storm Stories launching and a lot of disruptive weather which, as you know, helps.?

As soon as war broke out in Iraq, Burke's marketing team, led by EVP of marketing Wonya Lucas, began to tone down promotions for Storm Stories. There was concern that the promos were too violent in light of the war news. Lucas went with new promos that focused on ?rescues, survivors and people? rather than the damage inflicted by violent weather conditions, and he put promos for Storm Week on hold.

Weather Channel also avoided any flag waving. ?We added some forecasting for the [Middle East] region,? Burke said. ?But we didn't do anything patriotic, if you will. It just didn't feel appropriate.?

Weather Channel finished the first quarter with a 4% increase in total day viewership and a 21% increase in prime time.

?When the war started, our ratings dropped significantly. You're starting to see things slowly come back to normal,? he explained. ?Whatever's going on in the world, you still want to know how cold it's going to be. A lot of our falloff was afternoon and prime time. Our morning numbers actually hung in there pretty well. People still have to plan their day, no matter what's happening overseas.?

Another sunny spot is that advertisers did not yank many of their spots. ?It has not been as bad as people had feared,? said Burke. ?We did have some people pull out. We had a lot of people say, ?Once the bombs drop we want to be off for 72 hours.? But a lot of them came back more quickly than they said they would and most are back.?

Burke, whose office is decorated with a photo of a lightning storm on one wall and a French ad for umbrellas on another, has been redoubling the network's efforts in ad sales. He hired Lyn Andrews as president of TWC Media Solutions, from WebMD and ABC Radio Networks, and moved the hub of the ad sales operation to New York from Atlanta.

?We're about to get into the upfront and we'll see how it goes,? Burke said. ?There's a sense we're creating momentum.?

Even though the channel has been around for 20 years, it remains something of a tough sell on Madison Avenue where ? despite research to the contrary ? there remains a perception that people tune in quickly to get a forecast, then go on to other things.

Burke hopes that creating more appointment programming won't discourage the weather junkies who watch for surprisingly long periods of time. Storm Stories is a cornerstone of that strategy. And Burke is even discussing a potential companion show to Storm Stories that would feature vignettes on health and travel. Such programming could be attractive to advertisers. There are also plans to send a ?road crew? of reporters into the field to report on weather conditions when there isn't a blizzard or thunderstorm. The channel regularly dispatches reporters to cover weather disturbances, but when the weather is normal, viewers want to see something other than maps and charts.

The channel is already out there making its new pitch.

?They're really trying to reposition the network in the minds of ad buyers. It's not about the weather but how the weather affects life,? said Carat USA director of communications and programming services Shari Brill, who saw the channel's new presentation.

At the network's upfront later this month media buyers will be getting a new media kit employing the network's new color scheme and the theme ?It's not about weather. It's about life.? The pitch is designed to convince 25-to-30-year-old media planners in New York that weather does matter to them.

But no upfront is complete without some sort of event, and Weather Channel was brewing up a doozie. It secured one of New York's hottest spaces, Splashlight Studios, where the singer Pink held her post-Grammy party. And it had Michelle Branch set to sing to 250 media buyers for 50 minutes.

Still, Brill explained, the channel continues to be most attractive in the morning, when people are checking the forecasts. It could also be attractive for advertisers who make allergy medicines or want to reach travelers.

?There's still a lot of skepticism that they have a transient audience,? said Brill. ?But they wind up in people's plans because it tends to be very inexpensive.?

Brill noted that Weather Channel has a unique ability to localize and customize, making it useful to retailers who might want to pitch, say, snow tires on snowy days. ?That has tremendous appeal,? she said.

That localization is one reason Burke says that Weather Channel is far more complex than a typical national cable network. Providing those localized forecasts requires specialized equipment in cable operator head-ends. That equipment is also used for Weatherscan, the company's localized weather service.

Brian Shields, head of the information technology department, is responsible for many of the high-tech ways the company distributes weather information. The head-end box that supports the localized services is about to be updated. Shields noted that a new device, called Intellistar, will take up less of an operator's rack space and bandwidth. The box is being tested in 250 systems and will be rolled out later this year.

Intellistar will allow Weather Channel to offer a more customized and localized product for cable operators. Shields said 44 permutations are available now for the local ?weather on the eights,? and that it will grow to more than 1,000 with Intellistar. The new system will be able to tell viewers in Boston whether or not a Red Sox game will be rained out, for example. It will also give cable operators an enhanced ability to insert advertising on Weatherscan.

Shields is also working on using a digital picture frame as a medium for weather information. The frame plugs into a phone line and can receive periodic updates from Weather Channel. Once on someone's desk, the gadget can display weather information alternating with family pictures. Burke said he was considering sending the gadgets to media buyers as a knickknack. ?It's pretty cool,? he said. ?It just shows you again all the ways we can launch new businesses.?

At the same time, the weather data the company generates should be valuable on platforms other than cable. Although now it's difficult to imagine cable TV with no Weather Channel, Burke noted that several companies passed up its original business plan. ?If we hadn't figured out the localization side, it wouldn't have made sense.?

Burke is enthusiastic about other platforms. Tom Flournoy, VP of product management for weather.com, is beginning the process of creating a new forecast of how many people will be using the site for the rest of the year. Usership has grown so fast that the old forecasts needed to be revised.

With 19 million unique visitors a month, traffic at weather.com is up 200% versus a year ago. Even without spikes brought on by severe weather, viewership is up 100%. (Burke declined to say whether weather.com was making money on this traffic.)

Weather.com has its own meteorologist on staff to interpret weather data and display it on the site. It also recently reached an agreement to provide content to Yahoo's new platinum service. Burke is also having Flournoy redesign the weather.com home page, changing some of the ways in which the site can be navigated.

?We've got this great URL and developed a great website and it's a huge presence on the Web,? said Burke. ?And now streaming video's popular and weather turns out to be the third most popular use of streaming video after music videos and music trailers. And if you look at cell phones that are selling their new graphics capabilities, one of the first things they highlight is radar on cell phones. On just about every platform you can think of, it's important.?

Getting those platforms to generate revenue is the challenge. ?It looks like broadband is slowly emerging into a model that looks a lot like cable television with two revenue streams ? subscription and advertising. It's still to be determined how that's going to work on other platforms. Right now on the wireless side, it's looking more like a one-revenue stream ? sub fees. No one's really cracked the code on advertising, but we may get there.?

Burke thinks it's unlikely any of these media will ever replace cable as Weather Channel's No. 1 source of revenue and profit. But, he said, ?we believe the percentage will drop as those others grow.?