There’s a storm a-brewin’ at the Weather Channel.
Comcast — the parent company of NBCUniversal and the Weather Channel — took a $252 million impairment charge on its 2008 investment in the Weather Channel last week. On Thursday, when Comcast reported its second quarter 2015 financials, the company valued its Weather Channel holdings at $86 million, a precipitous drop from the $336 million it calculated at the end of 2014.
To make matters worse — or at least partially explain the downgrade — the Weather Channel also leads the industry in cable subscriber loss, down 11.2 percent year over year, according to the Wall Street Journal. By comparison, the cable network with the second-worst drop in subscribers was ESPN, with a 7.2 percent loss.
But Weather Channel CEO David Kenny isn’t sweating those numbers, he told TheWrap, calling the present a period of “transition” that his team is “successfully managing.” After all, network enjoyed its highest sales quarter and best profits ever in 2015’s second quarter.
But how are those two sides of the (shrinking) coin simultaneously possible? For starters, the biggest revenue gains are coming in from mobile and business-to-business products, not TV: The Weather Channel has the No. 2 most-downloaded iPad app, No. 7 on the iPhone and in the Top 10 on Android (the Google company doesn’t break out app downloads them individually.)
Simply put, digital is growing faster than TV is declining, said Kenny, who isn’t exactly bullish on the traditional small-screen model for network growth.
“The old cable model is sort of like the DVD model of Netflix,” Kenny said.
Kenny also blamed the steep decline in subscribers “almost entirely” on Verizon FiOS dropping the network in March in a dispute over carriage fees. (DirecTV had blacked out TWC for three months last year before the two sides came to terms.)
Negotiations with FiOS are ongoing, Kenny said, though he couldn’t resist a dig at the fiber-optic provider that itself has been losing customers: “We’ll work with the new owners of those subscribers.”
Kenny, who joined The Weather Channel in 2013, acknowledged that his high-profile hiring of former “Good Morning America” weatherman Sam Champion has been only “a modest success” to date.
Champion was hired as managing editor of The Weather Channel and co-anchor of its new morning show, “America’s Morning Headquarters.”
“It’s a work in progress,” Kenny admitted. “Early on, it went too far off from weather — and the world doesn’t need another morning show.” But the program is finding its path. “There’s a good audience that developed, that likes it,” he said.
While Kenny called the TV end of the business “good” and “steady,” he knows not to expect any increase in carriage fees. So long as the mobile and B2B businesses keep growing, Kenny’s not sweating the time ahead. “I feel — actually — awesome about it,” he said.
And despite rumors that the channel might consider a complete rebrand to a non-weather format, Kenny said, “It’s nothing I’m working on now. It’s way too early for us to give up on [cable].” So Vice and Yahoo seeking their own cable networks will have to look elsewhere for now.
Even so, Kenny admitted that the network may have to explore other options further down the road. “I don’t think it’ll be a linear channel the way we know it today,” he said, noting that is also true of many other networks.
In other words, the long-term forecast for the Weather Channel is mostly cloudy with a chance of salvation.