Businesses make a living off free data

Marketplace Staff Apr 1, 2010

Businesses make a living off free data

Marketplace Staff Apr 1, 2010


Bob Moon: Fifty years ago today, the U.S. launched its first successful weather satellite, beaming down images of cloud patterns from above — free to anyone who wanted them, which led to businesses like the Weather Channel. As Sabri Ben-Achour reports, other businesses are looking to capitalize as more and more government information becomes public.

Sabri Ben-Achour: A hundred and sixty years ago, newspapers would lift weather observations from the Smithsonian, call it a weather page and call it a day. These days, weather data is still free but it’s data. Endless, seemingly incomprehensible streams of it.

So if you’re gonna hang a business model on it, you have to jazz it up a little. If you’re the Weather Channel, you gotta, I don’t know — throw a reporter into a hurricane.

Weather Channel Reporter: It’s very hard to stay out here. Just the power of the hurricane.

But more importantly, you have to add value. Bruce Rose is Vice President of the Weather Channel:

Bruce Rose: I mean we have a lot of proprietary systems and a lot of intellectual property, a lot of secret sauce that goes into producing the weather forecast after processing the raw data.

Carl Malamud runs, a group whose mission is to make government data more accessible. He says government data streams have multiplied, and businesses that tap into them number in the tens of thousands.

Carl Malamud: I think it’s pervasive. It’s like saying how many companies use roads.

Malamud points to stock brokers who use data from the Security and Exchange Commission, Hollywood filmmakers who use government footage, and mapping services that start with free GPS from the military. And, he says, you don’t have to a big business to get in on the act.

Malamud: And it’s becoming much easier with the decrease in disk space cost and computing power and Internet bandwidth for a small start up to do something with it.

Easier yes, but also more competitive. Take that example of online mapping services. Now you have free Google maps that make money on ads, and just plain free wiki maps. To make money, startups have to come up with a niche.

Ian White is behind start-up Urban Mapping:

Ian White: If you wanted to ask a question and say “Find me the parts of the United States that are within 1 mile of a transit station, had a 60 percent or higher voter turnout and are in a poorly performing school district, we can tell you that information on the fly.

And with the upcoming census figures, new health care data, and increased government openness, there are only more business opportunities to come.

I’m Sabri Ben-Achour for Marketplace.

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