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The Digital Skeptic: Government Has Bad Forecast for Weather Companies

For all of The Weather Channel's star power or the crowdsourced data from Weather Underground or custom computer models from an operation such as Earth Networks, the 8,000-pound weather content gorilla is the computer models, analysts and atmospheric data managed by the National Weather Service.

The power of what this service offers directly to customers is staggering.

Want the real deal on Isaac? Forget Weather.com, WeatherBug or any of those outfits. Go right to the National Hurricane Center, part of the National Weather Service's online efforts. And there you will find an excellent Web service with all you'd need to know about disasters such as Isaac.

What's sobering to investors is that the National Weather Service is just getting started as a digital content provider. The agency is in the middle of a ground-up rebuild as part of a larger government-backed effort called Weather-Ready Nation. With the goal of making our slow-to-move country more responsive to natural disasters such as Hurricane Katrina and the devastating 2011 tornadoes in Joplin, Mo.

Weather-Ready Nation will feature serious new radar products, advanced imaging technologies, easier-to-use online resources and -- in a direct threat to private mobile app makers -- a significant move into improved mobile assets, including better emergency alerts.

"The work of the entire weather and emergency management community," says the agency website, "is driven by a desire to make sure the tragic impacts of the tornadoes in 2011 are never repeated."

Go try Weather.gov. You'll see you'd be a fool to rely on any other provider for the life-and-death information you'll need when the next Isaac or Katrina shows up.

Private companies simply cannot compete.

No manna from digital heaven
So here investors are -- yet again -- looking down the barrel of more grim digital age big-think. The information that drives the modern digital weather business is the same as the information driving the modern music, publishing and legal businesses: It's a commodity. Competition is brutal. And wholesale content creators, which, in this case, is the government, can reach consumers directly.

That adds up to a smaller sandbox for investor-backed weather companies to play in, and one less lucrative niche to pay for our crumbling digital infrastructure.

Weather, once one of hidden flowering cherry trees of the content forest, is now just flying debris in the digital hurricane.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.
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