AccuWeather is a weather forecasting company that utilizes their extensive data sets with advanced analytics to generate the most accurate weather forecasts on the market. The company then leverages their platform of APIs, websites, and mobile applications to make those forecasts available to consumers and businesses.
Live Forecast: https://www.accuweather.com/en/videos/accuweather-now/
Many sectors benefit from more advanced weather forecasting. Manufacturing and transportation need to know about severe inclement weather to determine if it’s safe to operate or if they need to pause operations and evacuate. Healthcare uses this information to adjust staffing, ensuring enough doctors and nurses are available to respond in case of emergency. Energy utilizes these forecasts to understand expected outages to their supply and develop strategies to mitigate the impact through weatherizing equipment. Finally, consumers benefit in from choosing their outfit of the day to planning vacations to being alerted of severe weather warnings and being advised to seek shelter.
According to the National Oceanic and Atmospheric Administration (NOAA), the U.S. has sustained 308 weather and climate disasters since 1980, causing damages/costs that have reached or exceeded $1 billion (source). With climate change increasing the frequency of these severe weather events, accurate forecasting is becoming even more important.
AccuWeather acts as a data aggregator, sourcing weather data from governments and partners; observations from land, ships, and aircraft; crowdsourced reports; satellites; and radar sets from 40 countries. The sensor arrays at these various observation points transmit their data in real-time, allowing for the most up to date information available. AccuWeather then processes that data using a combination of proprietary AI algorithms and meteorologists in what they call their “Digital Forecasting System.” An example of a proprietary forecast is their apparent temperature known as “RealFeel,” which incorporates temperature, wind, humidity, sunshine intensity, cloudiness, precipitation, and elevation to determine the equivalent temperature experienced by the human body (source). This is a patented measurement owned by AccuWeather (List of AccuWeather Patents)
Their forecasts are extensive, covering 2.3 million locations with 100+ different parameters. With 1.5B users around the world, AccuWeather translates this information into 200+ different languages and dialects. AccuWeather improves the accuracy of their models through several methods. First, they have a team of experienced meteorologists that sanity check the results. Second, it’s easy to observe the actual weather. A typical forecast operates on an hourly to 10-day range so, it’s straightforward to determine the ground truth and score their models. More details on their processes can be found here.
AccuWeather faced multiple challenges setting up their processes. First, they needed to partner with a significant number of governments and other agencies to source their input data. Since they operate globally, they need to gather data from around the world and not just a single source. They also needed to set up the infrastructure to support real-time data feeds.
Going forward, the biggest challenge they’re going to face is climate change. As global temperatures rise, backward looking models may no longer be the best predictors of future weather patterns. Current weather conditions will require models to extrapolate outside the range of their training data, potentially impacting accuracy.
AccuWeather captures value through several methods. First, they sell their forecasts to businesses that display this information for their own customers in a B2B2C model, which includes TV Networks, digital displays outside buildings (such as airports), audio broadcasts, and more. AccuWeather makes this information available through an API that allows customers to pull data and integrate it into their own solutions for rapid customization. The graphic below summarizes just how extensively AccuWeather’s data is being leveraged daily.
AccuWeather has a website and mobile apps. The website and free versions of these apps include ads that AccuWeather claims, “can customize [their] advertising solutions to reach consumers when they are most receptive across any platform.” They likely generate revenue in a pay per click or per impression model, depending on how strong their conversion metrics are. In addition, the mobile apps offer two paid tiers: 1). Premium, which is ad-free for $1.99/month and 2). Premium+, which is ad-free and includes additional content such as: alerts, widgets for home & lock screens, and health outlooks, for $3.99/month. While the advertising revenue helps ensure a free version is available to anyone who needs an accurate weather forecast, recent app reviews have been more negative with users highlighting that an increase in ad traffic has degraded the experience. This showcases how difficult it can be to monetize a service that consumers expect for free.