Mobile weather applications will continue to support demand and revenue
Los Angeles, CA (PRWEB) September 06, 2012
IBISWorld estimates that revenue for the Weather Forecasting Services industry will increase at an annualized rate of 0.4% to $510.2 million in the five years to 2012. In 2012, industry revenue is expected to decline 4.1% off the back of a spike in 2011 as a result of a large number of natural disasters that occurred—a trend that is not expected to be duplicated in 2012. “Industry operators receive a lot of traffic when natural disasters occur because the daily activities of consumers and businesses rely on the weather,” says IBISWorld industry analyst Kevin Culbert. “As such, dramatic weather events have a direct influence on how closely people pay attention to the weather.” In general, the industry benefits from relatively stable demand and its overall maturity.
Industry profit margins have improved marginally during the past five years as a greater proportion of weather forecasting is performed by computers rather than by human input. “Although humans are still needed to choose appropriate weather models, computers complete the majority of actual calculations,” says Culbert. The majority of companies in the Weather Forecasting Services industry get raw data from radars and satellites operated by the National Oceanic and Atmospheric Administration's National Weather Service (NWS). These observation stations are primarily located at airports and military bases and each state has a few stations. The NWS uses radar, which sends out radio waves that reflect off particles in the atmosphere, like raindrops or ice. A radar then measures the strength of the waves returning and how long the round-trip takes, which allows forecasters to see the location and intensity of precipitation. Currently, the NWS uses the Doppler radar, which also measures the frequency change in returning waves; this reports the direction and speed at which the precipitation is moving, which allows forecasters to see rotation occurring inside thunderstorms before tornadoes form.
The industry’s nature has led to market saturation because industry operators generally provide the same services. As such, the industry has started to consolidate as larger firms vie for market share and extend their reach through niche services. In the five years to 2012, the number of firms operating in the industry is expected to decline 1.5% per year on average to 199. The industry's consolidation was evidenced in the July 2012 announcement of The Weather Channel's plans to acquire former major player Weather Underground.
In the next five years, large industry operators will benefit from the continued adoption of smartphones and mobile weather applications, trends from the past five years. Although small players are not expected to experience as much growth as the industry’s leaders, they will still benefit from the necessity of weather forecasting for the general public. For more information, visit IBISWorld’s Weather Forecasting Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides forecasts of future weather activity for individuals, businesses and governmental organizations. These forecasts are then disseminated via TV, the internet and the radio.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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