Former Google exec is accelerating weather company’s transition, expansion
WHEN PELMOREX FOUNDER Pierre Morrissette trolled the executive ranks for someone new to take his place atop the company which owns and operates The Weather Network and MétéoMédia, he cast a far longer line than into the pool of TV people.
This past summer, Pelmorex surprised many by hiring Sam Sebastian away from his gig as vice-president and managing director of Google’s Canadian operations. The official announcement of his hiring, however, wasn’t a simple “welcome aboard”, but instead made it clear he will be driving an aggressive company aimed towards international expansion based on the possibilities big data can bring to the company, its users, and clients.
Pelmorex is already the leading weather brand in Canada with its English and French TV channels, web sites and apps – but fewer may know it is the weather leader in Spain as well, since acquiring El Tiempo in 2012. That acquisition has allowed the company to launch Clima, a weather service for Spanish speaking countries like Argentina and Mexico. Pelmorex also has a presence in France and Germany and has moved into health care with a 60% ownership in Complete Concussion Management Inc.
As many know, it also grabbed the bull by the horns five years ago and, when no one else would, created Canada’s first coast-to-coast emergency alerts system (officially the National Alert Aggregation & Dissemination System), which informs Canadians of various threats and emergencies, from forest fires and potential tornadoes to Amber Alerts on TV, online and on wireless devices.
However, data is where the company’s future lies. Weather may be commoditized news, but The Weather Network – thanks to its local technology, web sites and apps which have been collecting data for years while disseminating local weather and traffic – can make that information personal and very useful. It can deliver hyper-local weather to users needing to know if they’ll be able to make it up north before the blizzard hits, or finish their back nine before the lightning comes – which pays off in the ability to also deliver targeted, very specific marketing to those users on behalf of their ad clients.
Its most recent acquisition, Addictive Mobility, was the company’s clearest signal of the switch from being TV centric (although Canadian TV still brings in the bulk of Pelmorex’s revenue) to a data solutions company because, as you’ll read below, it grows the mobile user base which it can deliver to its advertisers.
Cartt.ca editor and publisher Greg O’Brien recently sat down with Sebastian at Pelmorex’s corporate headquarters in Oakville. What follows is an edited transcript.
Greg O’Brien: So, I'll start with a hard one… Last week I interviewed Randy Lennox, the head of Bell Media.
Sam Sebastian: I know Randy well.
GOB: If you want to look at the two of you, nominally, you're in the same business. You both have TV assets and head up broadcasters. But, for how much longer will the TV channels continue to lead (for Pelmorex)? This company is different, so what have you learned so far about that, and what do you think the future is for linear TV, which is currently being disrupted?
SS: The reason I came here is because I do believe in the cross platform nature of our product, and I do think when we go to our advertisers having a story about how we are strong for a certain type of TV viewer, but also for an app audience, a mobile web audience, a PC web audience – I think that's a powerful message. And, we're a trusted Canadian brand that also has control on brand safety, which is a very hot topic these days, which I've lived through at YouTube and Google. That's a very strong story and it resonates very well in the market.
The question of how long television will be an important leg of that stool, I don't know. I do know that I was very surprised with the loyalty of the users that we do have on television.
When I go downstairs to programming and suggest something, because I'm the new guy and I don't know any different, they'll be very patient and say, "Okay, thank you for your advice. We've tried that before, but the response we've gotten from our viewers is quite vocal because they're so passionate about our on-air personalities, or how 
we present that."
That, frankly, validates the power of that medium, because we’re connecting with a subset of the population that really does tune in and follows us. It's very different than maybe a millennial would check our product, or maybe I would, but for many various different, rural communities around the country, or in certain age groups, they follow it constantly. So number one, I believed in the story and the power of cross platform, but since I've been here, it's validated the passion behind television, which I wasn't as familiar with.
What I can't answer for you is how long that passion continues, or the direction that it goes. I think slowly but surely it will be a smaller portion of our business on the advertising side, but certainly on the subscription side with 9(1)(h), and everything that we provide for public alerting that it will hopefully continue to be an important component of our business.
GOB: Weather is a commoditized information, but when I go skiing up north in the winter, when I'm outside of Markdale in Beaver Valley, it has the Markdale weather forecast specific for that area, and that dates back to when … actually your gear probably still is in their local headend from way back in the day, to give that forecast for that area.
SS: Correct.
GOB: That local connection is a strong part of the holdover.
SS: I want to be careful that I don't oversell it, but it's almost a public service for various communities around Canada. For example, we just started our process for the license renewal, so they open up for public commentary and everything like that, and they do a few teasers.
GOB: The on-air appeals I’ve been seeing, yes.
SS: In less than a week we had over 900 letters from our users around the country saying, "Man, don't mess with this thing. I don't want to pay more. I need this on my basic package because I'm constantly watching this." Or, "this is where I go to."
So, I think television is always going to be an important component, but the momentum that we have on the digital side, the capacity to do things at a broader scale, both in Canada, Spain, and around the world, the various different components, or different ways we can leverage information that we have at our fingertips with respect to weather or location or various other different datasets, we can now create interesting new businesses.
The promise of that is where I think we'll see growth, but I don't think television will ever be something that isn't one of those critical legs of the stool, especially given the service nature of it for the country.
GOB: I see it in my own home. When my daughter wants to know what the temperature's going to be tomorrow, she or I will pull out my phone for the app, but my wife will turn the TV on because we've trained ourselves two different ways of finding information.
SS: My kid or your kid may see it on her Facebook feed. Or, hopefully not, hopefully they're using our app. But, that is one of the challenges we have is how do we, for my daughter who's 15, does she even know to go to The Weather Network app? Or, does she just get all of her data through some other daily interaction she has on Snapchat or something like that?
GOB: That's part of your fight, too, because I think on my phone, Accuweather was a default setting, which is a battle for you as well.
SS: Right. If you're using an iPhone, you have free weather, or at least the basics, but that's why Pierre, our founder, has always believed – and I believe – the brand is so important. The Weather Network is a brand that Canadians are passionate about and so we see many folks who will very quickly just install The Weather Network app on a brand new iPhone because that's what they're used to and they know they're going to go either one level deeper, or they sense that we have a more accurate forecast, or it's just something they're comfortable with because of the value in the brand that we've built up over the years.
GOB: Everyone needs to know the weather. It was always TV, or radio, which haven’t gone away, but now it's really gone to the device, which you know. So, what are you bringing from your 11 years at Google to this company to drive that future?
SS: There's three different ways I've looked at it. One is that it's an advantage I'm not from this business, the weather business, because what I love about this company is we have folks who have been here 20-plus years. And at first, I was intimidated and I thought, "Well, what am I going to offer, because I don't really know meteorology, I don't know television."
I will bring a different way of looking at some of these problems than someone who's been here, focused on this business for five, ten, fifteen, twenty years. There are a lot of folks who have been around for a long time and that's an asset, but at the same time, for me, I think it's actually an asset being a new guy because I can ask a bunch of dumb, objective questions because I'm coming from another world out there that is quite different than this.
I'm already seeing how a fresh approach or a different way of looking at things is an asset as we figure out where we want to go next. So, that's number one.
Number two, there's always a balance for media on how much you focus on the product and the consumer experience and how much you focus on the business revenue and the monetization of that product and 11 years at Google… I just grew up in a company that believed in the user experience first. Deliver utility to the user, and then if you can do that, you'll have the audience and the rest of the business will follow.
That was the overall business model that (Google founders) Larry (Page) and Sergey (Brin) had in the very beginning, so I think I'm bringing that approach to this company and to debates and discussions that we're having – refocusing on ultimately, why Canadians fell in love with The Weather Network here in the first place. It’s because we deliver a really strong, accurate forecast, we're always there, and we're a trusted brand that's going to deliver on that promise. I just want to make sure that we can continue that level of focus on web, on mobile web, on our app. Even though it's harder and harder to monetize those platforms, we just have to make sure we have the balance right of advertising and utility.
Lastly, I think the space that I operated in: digital advertising, programmatic advertising, data, just of anything, frankly, non-television – it moves so fast. There's so many complexities and specifics about that business where if that's the direction where we're going to see more of our growth in the future, I just naturally work in that space.
So, I'll be able to catch up and understand television and what it's about, but there are fewer digital people here than there probably should be and I think I'll be able to bring some of that thinking, then hopefully attract more folks who will allow us to push the next five years forward as opposed to just continuing to build up on our television assets, which might not be the right bet to make.
GOB: I've been covering this industry long enough where I think I was here for the grand opening of this building and at that point, all of the technologists in the building were the meteorologists, the ones finding the weather – and there's still a ton of them. But, you count something like 45 million touch points a month, so your technologists now need to be those data crunchers. So, when you have that many consumers across all of your platforms using The Weather Network (and MetéoMédia),on different devices, so they're producing even more data, you're talking about billions of points of data. How do you crunch all of that and monetize it?
SS: We have multiple databases of data and I think the weather data is pretty interesting, but, it takes a little bit longer to figure out how we're going to necessarily monetize it. Let me take the question a little differently.
“We have to solve the ability to scale all these data points just to manage our existing business, whether or not we monetize it or not.”
We have to solve the ability to scale all these data points just to manage our existing business, whether or not we monetize it or not. Every year, we're getting more access, we have more models that are coming into our forecast engine that require more scale, that require more computing power for us just to manage all of the data that is now available because like you mentioned, it's kind of a commodity where lots of folks have data and we pull in all this modeling just to make sure our forecast is the best around – and that's just to do our current business.
We will have to change how we work… we will invest more with engineers, we will invest more over time in artificial intelligence and machine learning. We'll invest more in cloud computing so that we can do this as efficiently as possible and at scale. That's what I was familiar with at Google and will hopefully bring those types of things here, just to do the basic business.
And now what we're trying to figure out is okay, we have databases of weather, we have databases about behavioral information about what people do on our website, we have databases about location, where folks are located when they're using their app, so how then do we create a data offering that makes sense that balances privacy and respects of all of our users, but also is a business value that we can monetize, so we've started to test in all of those various different areas.
We don't necessarily have the answer, but that's why IBM bought The Weather Company two years ago, just the digital assets, for $2 billion, because of the promise of what that could deliver. We're going through that exact same assessment now.
GOB: Is that behind your recent launch of the personal weather forecast tool, app, whatever you're calling it?
SS: It's less about capturing more data that we'd be able to monetize and more about delivering on that consumer experience. More and more consumers want a personalized experience – you have to deliver on the value of why someone would want to log in to get a more personalized experience, so we're combining the personalization engine with value. We're not creating more data points that we can somehow mine and monetize, it's more about just making sure we keep up with the Joneses on making a very personalized experience for our users.
GOB: So “I'm at this golf course, am I going to be able to finish my round before the rain comes?”
SS: Right – and make sure you deliver that forecast on the fly on my app. Even if I don't have my app open, I want to get that notification. That's the agreement we will have with the user that says, "Listen, if you're willing to allow us to follow you with this app technology, we will respond to that agreement by delivering you great value." We have to continue to deliver that in order to keep someone coming back and being willing to log in or personalize.
GOB: Well, on a different level, you could say keeping them safe, too. I mean, you could notify them of fires and tornadoes and whatever else coming their way.
SS: That's our business. Most folks want to understand if it's going to rain tomorrow… but in the end, we have the potential to save people's property, or even their lives, if we can alert them when something's coming around the corner that they didn't necessarily expect and we take that very seriously.
GOB: Which is the reason behind the emergency alerting Pelmorex created.
SS: Correct. We're extremely proud of that. It's not easy because we're doing it for all provinces in two languages and it's something I know Pierre is extremely proud of that he has built here. I'm anxious because we're going through this whole licence renewal process, so I'm trying to understand what all the folks are looking at there but the alert system was tied to our license renewal, but it's something that just makes sense for the country and we've built, I think, a really good tool and process that I don't know if anyone else could have who wasn't necessarily in this space.
GOB: It was a brilliant idea for the company because any of the broadcasters could have done it and really should've done it ages ago. They were told by the Commission to do it, they didn't do it, Pelmorex stepped up and did it and said, "We'll do it in exchange for 9(1)(h).” Despite the complaining from many people in the industry, they haven't created anything else. We still need an emergency alerting system. It was mandated in the states, where it's law, but we never had it here, for no good reason other than just nobody did it.
SS: And it's not perfect. We have a council and the council always wants additional development and we only have so many resources we can dedicate to it, but we spend a lot of money on it because the stakes are so high. We have to make sure we're delivering and we have a platform to deliver these alerts across weather and all sorts of other kind of Amber alerts, etc.
GOB: Train crashes, forest fires, I mean, this is all kinds of stuff.
SS: We take it very seriously and it's something we're very proud of, but it’s interesting the relationship it has with license renewal where we're trying to figure out how much do we talk about the service we deliver to Canadians with The Weather Network, the service we deliver with our alert system, and how we have that conversation about why we should be renewed for 9(1)(h). Our users are writing 900 letters, not because they necessarily know about our alert service, but because they want us to be on basic and they love seeing us every day. We have to just figure out how best we want to talk about what we do with the CRTC.
GOB: How strange do you find something like the 9(1)(h) rule from the CRTC given your background, where there wasn't this type of regulation?
SS: It's not strange only because I would talk with the Heritage Minister often, or privacy commissioner-type conversations. Government relations was a pretty big component of the job at Google because it’s a big U.S. multinational operating and being very successful in Canada. So, over the past probably three or four years, we were under a lot of pressure for being treated differently, or people saying "You should be taxed on this." So, we constantly had to be in front of government and other groups, explaining why we don't agree with that, or providing the counterpoints to various different ones. So, have I ever been in front of a CRTC, hearing? No, but the dialogue with government and various different Canadian rules and regulations is something… I became familiar with over time.
GOB: Sure. But, there's nothing like a campaign to get Google as a must carry on somebody's platform.
SS: No, but certainly with net neutrality and lots of other meaty issues, there was plenty to campaign for why you should keep the internet free and frictionless and why you don't want to tax people for various different reasons because it's going to hurt the consumer, those types of things. We still had our hands full back there, too.
GOB: Let's talk a about the Addictive Mobility acquisition. Why go in that direction?
SS: With Addictive… I know we will expand over time and that can go in two different directions. One is to various different international markets. We run the largest weather business in Spain with El Tiempo… and there are probably a handful of other markets where over time, we could look to expand internationally, including the U.S. We've dabbled there, but that's obviously a bigger fish to fry.
“We'll have to become more of a technology company over time than just a media company and in order to that, these are the types of acquisitions we'll have to do.”
The second is to get a bit more vertically integrated on the technology and to offer up more audience extensions for our advertisers. So, right now, if we go to an advertiser, they can advertise with us and reach an audience on The Weather Network on our apps or on our websites, but beyond that, we're done. So, we have to continue to grow our products so advertisers can get the inventory that they want and what Addictive Mobility allows to do is offer our advertisers additional audience outside of The Weather Network on mobile applications throughout Canada. Addictive Mobility will go and find inventory for an agency or advertiser on various different apps across the web and we can now, then, bring that.
We're already at the table as a very strong Canadian brand with advertisers and now we can go where consumers are going, which is more and more on mobile and that's what Addictive Mobility brings. It has 55 people in downtown Toronto, great technologists, several data scientists, artificial intelligence experience, and those are the investments we're going to have to make in Oakville and in The Weather Network over time and so not only are we buying audience extension and a data management platform and some creative resources, but we're also buying talent downtown in an area where I want to continue to grow.
To attract a data engineer, it's a little bit more difficult to get them into Oakville, it might be a little bit easier to get them to Liberty Village in Toronto. We'll have to become more of a technology company over time than just a media company and in order to that, these are the types of acquisitions we'll have to do.
GOB: So, basically, it helps the existing business, but extends you into other ones.
SS: We have to continue to make sure that we're delivering a great television product, but we also have to make sure we're retooling the company for the future and that's a tough balance. That's what a lot of traditional media companies have a very difficult time doing.
GOB: With El Tiempo, you're the biggest weather platform in Spain, you've got some other ones going in Germany and France… How far do you see the international expansion going?
SS: We have to pick our spots. With El Tiempo, it was a dedicated, small team, and then we built it up over time. It was a different platform than what we ran here in Canada and we found that we've been able to pretty efficiently extend that platform and get into other markets, especially Spanish speaking markets, which is what we launched with Clima. Because we have the capability to pull in all this weather data from around the world, create models, and put meteorologists on the modeling, we can create forecasts around the world.
So, we have the weather information to be able to build a very viable product in any market. The question, then, is how do we distribute that? How do we build audience? How do we do all the business side of it? With digital, you can build a destination, arm it with lots of good data, then with search engine optimization and Google, lots of other places, you can get a little bit of traction and that's what we've done around the world to get a sense of where do we have good engagement with our products. Then maybe we'll land a team in that market, we'll pour some marketing expense on it, we'll partner with someone locally, we'll buy a company. That's the assessment we're in right now. We have a product that we could actually launch because we have great weather data around the world so let's see what sticks and then if we actually get some good, positive feedback, we can go, really, much deeper in a particular market.
GOB: El Tiempo must have had tons of traffic with all the hurricanes barreling through the Spanish speaking markets in the south. I don't know what the numbers, but I heard it was pretty good.
SS: I wasn't used to this, how our business really does very well when there's severe weather. You don't want to root for severe weather, obviously, but it is a positive byproduct of severe weather. I mean, I was just in Madrid three weeks ago and they're dying there from the business perspective because they've had sun and no rain for 41 straight days. Why would you go to the app when it's just basically going to say it's more of the same? But, it's the nice thing about the weather, you're just always going to have severe weather pop up and it’s about who's your trusted partner in getting you through the day when something crazy hits?
GOB: There are all kinds of jokes about being the weather forecaster in L.A. or someplace nice like that, as being the easiest, well paid gig in the world…
SS: Until bad something happens. Then, folks rely on you. So, that's why September, my first month here, the team downstairs on the television side was just… they were working 24/7!
“We have folks that will jump on a plane, rent a car, sleep in their car overnight with a videographer with them, to report and almost chase after these storms, to report them back to the users here in Canada.”
We were trying to cover a lot, with Houston and Florida, and because Canadians also want to tune in and understand where they vacation or friends and family – and I was amazed at how dedicated the team is here to delivering on that promise of making sure that we're getting you as much information when it counts. We have folks that will jump on a plane, rent a car, sleep in their car overnight with a videographer with them, to chase after these storms, to report them back to the users here in Canada.
That passion and dedication, I was used to at Google for various other reasons, but it was just so awesome to see it here because in the end, this is our core product and the folks who work here are just so passionate about delivering that core product to our users on any platform.
“You can't operate like that anymore. You’ve got to get real time data right away to see if something is engaging with your users.”
GOB: Do you envision making sort of pivot the way the U.S. Weather Channel has gone with some scripted and programming and weather related documentaries, that type of thing?
SS: I don't know. Folks here have resisted it. Either maybe they tested it and it didn't necessarily resonate or the cost didn't make sense, or maybe there was a sense that we want to be a little bit more pure and just focus on delivering kind of the science or the accuracy of the weather and not get more on to the entertainment side.
I want to do whatever users want to see, so, what I'll try to bring here is make decisions based on real data and what consumers are telling us they want with our products. It’s not what we think, but instead let's get a little bit more disciplined and intense about asking our users on all the various different platforms what's working. Let's throw something out there, test it. Maybe it's a program, if it gets great engagement, that's the feedback that we're looking for, and then let's build beyond that.
What I was used to with Google, is let's come up with an idea, launch it live to consumers – either all of our consumers or some sort of subset – get feedback, make a decision and then, very quickly, move that through the development process.
I think more traditional media will come up with a good idea, do a bunch of research on it, then go into corner of the office for six months, build a program, launch it, and then hope it does well. You can't operate like that anymore. You’ve got to get real time data right away to see if something is engaging with your users, then get all that feedback, maybe make a three minute scripted show that we launch on our digital channels first, get some feedback there.
Maybe that turns into a 30 minute scripted show that we put on television. I think that's how we'll operate – and then if our users and the data suggests that they want more of that, then we'll probably build more of that.
“If you go talk to a big advertising agency, Google and Facebook are the biggest line items on their ledger for where they spend, and they're just getting uncomfortable with that.”
GOB: Pelmorex is a mid sized Canadian company and once you get beyond Canada's borders, which you’re doing, it's a small company. How do you stay competitive in this space? You've come from the biggest company there is in data and now, you're bringing these principles here. How do you apply that to compete?
SS: I noticed when I was at Google, the last few years, our agencies and even some of our advertisers, started getting uncomfortable with how big we were getting. If you go talk to a big advertising agency, Google and Facebook are the biggest line items on their ledger for where they spend, and they're just getting uncomfortable with that. There's a lot of supplier power that is isolated with two of these multi-national, non Canadian companies and I think, especially for this type of ecosystem, you need a bit more diversification, you need more alternatives, and especially in Canada, where we don't have a Google and a Facebook that grew up here, there is a lot of room and you've got folks rooting from the sidelines for a very, very strong Canadian brand that can be an alternative, the next best alternative to the big two, Google and Facebook.
That's why I'm here. That is a space that I think we can occupy with great strength and if we can go to all of the agencies and many of the advertisers here in Canada and demonstrate that and operate at that level and be scrappy and can customize solutions for Canadian advertisers and agencies, as a Canadian publisher and as a Canadian company, I think we will do extremely well. That's what I want. If we offer much of the same value, maybe not all the same scale that Google or Facebook does, but much of the same value, we're going to get more than our fair share from advertisers and agencies and build a strong business in the markets we operate.
Now, maybe we're much smaller than someone who operates in the States and all the way around the world, but eventually, we'll get there as well. I want to be that next great alternative here in Canada, in Spain, and then as we expand beyond that, we'll run that playbook elsewhere as well.
But, we still have work to do… I'm convinced we can fill gaps that both Google and Facebook have left unattended and we can do it with a very strong Canadian brand in the markets we operate and I think that's a differentiator for us. So, I actually like being smaller and being a little bit of the underdog because I think we have a lot of folks here in Canada and in Spain rooting for us.
