The emergence of the ‘Say no to Rightmove’ campaign made the pages of the Financial Times at the weekend.
Writing under the headline of ‘Rightmove’s ‘network effect’ could be thrown into reverse’, Bryce Elder looked at the potential effect of agents beginning to exert coherent pressure on the portal.
“The past decade has seen money flood into any company that could claim to be carving out a dominant market position.
“No niche was immune to some online disrupter looking for the positive feedback loop of market leadership that strengthens as the company grows.” he wrote.
“But with great market power, to misquote Spider-Man, comes great responsibility.
“If a company succeeds in establishing itself as the default route to market and that market then disappears overnight, those providing the inventory will want their pain to be shared.
“Advertisers expect reduced fees and subscription holidays.
“And if these incentives are seen as ungenerous, the company risks triggering an exodus that throws the network effect into reverse.
“Rightmove has the potential to become a case study in network effects.”
Elder noted that although estate agents have spent a long time complaining about being held hostage by the likes of Rightmove and Zoopla, the fragmented nature of the industry meant that, until now, the complaints had little effect.
“It was never obvious what might fuel a rebellion against the duopoly.” he said.
Covid-19 appears to have provided that fuel.
Rightmove’s first response to the crisis was to offer its most loyal agents a fee deferral. The backlash to that idea made the company perform a swift U-turn and instead cut all customer bills by 75% for four months.
The move did not defuse the situation, which Adam Pigott of rival portal OpenBrix described as a Rightmove’s ‘Ratner moment’ – the infamous self-inflicted PR disaster that sank Gerald Ratner’s jewellery chain in the 90s.
According to Elder, broker and analyst firm Jefferies believes that to preserve its market leading position Rightmove will have to make a permanent cut to its fees.
The Say No to Rightmove campaign is lobbying for that change and now represents around 18% of Rightmove’s network.
Despite this tide of dissent, Elder made the observation that Rightmove has no borrowings and holds enough cash to pay wage costs well into next year.
The ability to outlive the current crisis gives Rightmove stock a rarity value and there are signs that investors are reckoning the company is very likely to maintain its pre-eminent position when the Covid-crisis is over.
You can read the full article here.
Comments (25)
Make sure they take your stock off immediately, the same as they take listings off for non payment of fees.
Already cancelled, stock already being removed. Going to be running smaller, tighter ship, more focus on social media, much less on portals. Will probably turnover less, but will make more profit. (And have less stress!) Good luck to everyone, but I for one will never be going back to Rightmove, there are alternatives for people to be brave, work smarter and carve out a business that has a better resale value in the future because it has its own brand of marketing. With Rightmove, anyone opens up, plugs into Rightmove and off they go. Would Purplebricks have got the market traction if it had not been on Rightmove? They did, because as far as our customers see, that is all there really is to being an estate agent; List it, post it on Rightmove and wait for the phone calls!
Couldn’t agree more.
I am afraid that Rightmove has already won the day for their shareholders; and their arrogance will only be bolstered further by all of this.
This is “The Real Test” of their business for now and they are succeeding in that test. (There is a greater test to come).
A CEO that calls this a blip who is still in place.
A share price that is doing better than the market average.
A variety of campaigns akin to Oliver Twist asking for more; and getting a similar response…………..
RM will stand squarely behind the corporate’s, who lets face it pay a lot less than the independents per branch in the first place. They can afford to drop them to a free listing and continue to milk the little guys.
Rightmove is cat nip to agents. It fuels their egos with twisted pie charts and instant responses to new listings; and agents pay for it just like they do heroin from a drug dealer (well some do).
The best that agents can hope for is that they extend their offer to the end of the year………I am not sure they will.
When agents re-open and receive their first full bill on day one of month five, when their pipelines are empty, that will be the test to Rightmove; this after all is just a blip.
Although Rightmove has the cash to outlive the Covid crisis it’s bubble has burst. Like the mighty Wizard at the end of the Yellow Brick Road behind the curtain is something quite frail and fragile due to age; because of a world event we have ALL got to see behind the curtain. (this time)
When there is world event, a 9-11 or Fannie Mae that resets the market on a global scale there is an opportunity for change.
GMG were ideally positioned to take Rightmove after Fannie Mae but as they had done with Autotrader previously stuffed it up and missed out on the rewards that were theirs for the taking.
World events come along every so often and we have been overdue one for a while. Now its here there is an opportunity to reset.
There is at least 3 months remaining (but more likely till Christmas when the Oxford vaccine for Covid looks likely to be available) for the industry to get away from it reliance on generation 3 portals and move itself to where it should have moved in 2010.
In May 2011 Julian O’Dell was the host for an event that outlined the opportunity that existed then and exists again today. Alongside Julian at that event was Jeremy Tapp of Radar and Homeflow, Jeremy is one of those turn to gurus you ask for digital advice and strategy. Jeremy of Homeflow, Alex Evans of Estate Apps and few others have had a while to prepare for this opportunity. The web system suppliers are ready, most of the CRM suppliers are ready so this time round there is stuff in place Mr. Elder won’t be aware of
I sat with Jeremy when to duopoly was being formed up (November 2011) and outlined what would happen as a result. All I said would happen has, right down to the mistakes that would happen and near penny perfect on how ARPA would rise.
An analyst for a bank cannot know all that comes from living and breathing one subject for 12 years, so although he might know a lot about the money he has very little idea that this time the industry might have 10 years of hindsight to refer to and learn from.
There were lessons to be learned from Think, Radar, OTM and Zoopla, if the lesson weren’t obvious it is time to understand otherwise the mismanagement of the opportunity will have the same effect as before.
In times of crisis the true nature of a company reveals itself.
It was always clear that Righmove was a self centred company with only its own interestes at heart.
Now its time to take good care of your bank balance and cut out the dead wood.
Band together and give Rightmove a taste of their own medicine.
If rightmove was a person it would certainly be a narcissistic character, as it’s got all the classic traits. Yet underneath all this confidence, its nothing if we stop believing in it.
Exactly!
My thoughts for anyone who’s interested:
Call me a cynic but in my opinion and judgement, the ‘say no to Rightmove’ campaign runs the very real risk of a few powerful agents tying up cosy deals while the majority of agents achieve a few weeks of respite in a dire market only to be shafted royally again as soon as RM are able. Sound familiar?
JUST DROP IT. PERMANENTLY.
Now is NOT the time to just say ‘no’ for a short while with the vain hope of RM changing its spots. It won’t. Use this awful time and market wisely. Cancel your subscription. Re-learn old school marketing and estate agency basics (you know, talking to people on the phone) and combine it with new, cutting edge tech such as Homesearch, Rummage4 and social media.
Drop Rightmove. They were once a good firm that offered value. Now? If Rightmove were a meme it would be Mr Creosote. Walk away. Stay away and socially distance yourselves from it.
Well said Chris!
As a miltary man you ought to be aware of the subtlty between a total and crushing victory and one that leaves alot of infrastrcture and traditions in place.
Destroying Rightmove won’t benefit anyone but those who have spent money they didn’t have on a portal they couldn’t afford. The outcome that benefits Rightmove and the reduced number of agents who come out the other side of CV19 is that Rightmove is forced into the innovation it has been putting off for far too long and it charges a much fairer subscription that’s based on the much lower fixed costs of an innovated platform.
Although their operating profit will be much reduced (est) £50-60 million* I suspect they’d rather have that than nothing. (the alternative)
* based on £335 for sales or lettings, £500 combined off a lower fixed cost that maintains their profit margin
“People should either be caressed or crushed. If you do them minor damagethey will get their revenge; but if you cripple them there is nothing they can do. If you need to injure someone, do it in such a way that you do not have to fear their vengeance.” Nicolo Machiavelli.
Letting them know how to get themselves out of this comes under “caressed”
Educating a bully has far more effect than detention!
Posted without comment. Could equally apply to RMs treatment of its customers.
I don’t disagree that an educated and rehabilitated bully is better than one in detention or expelled however, the say no to RM campaign is, in my opinion, to continue the bully analogy, much like having a teacher walking in while you’re having your lunch money stolen. You’ll keep it today but the bully will be back tomorrow expecting more. RM will not change under current leadership and are trapped by shareholders who are unlikely to support a huge, even and sustained price drop to all of its customers not just a select few.
Good morning Robert. I hope (and believe) you misjudge the groundswell of support for eliminating RM altogether. As for them accepting heavily reduced fees, if they’re not going to reduce now, they’re certainly not going to drop to the levels you suggest in the future. After this pandemic has wrought its deadly blows there will be no place for many agents and no need for RM. They had a chance at the outset, they blew it and they’re well and truly in the mire.
You’re so often right in your judgements, methinks you’re well off the mark on this one. Time will tell!
We are only 1 month into the 75% reduction in fees and so are in a period of waiting to see more how the economy and health of the nation fairs than reaching a conclusion to the haggle with Rightmove.
While there are agents who are wholly reliant on Rightmove, and by that I mean those who cannot value or get anyone to view or offer on a property without the portals as a life support system there will be agents prepared to pay stupid money to list.
While there are agents who I guess pay about £800/branch/month less than their independent competitors or investor backed non geographic listers who will continue to list on the portals because it isn’t a financial worry to them personally, the portals will not be destroyed as many people want.
My post is attempting to show both sides a compromise and to some extent cut out a lot of the People’s front of Judea, Popular People’s front of Judea (SPLITTER!) pulling in different directions stuff that derailed Propertylive II and will likely derail saying no to Rightmove if there isn’t a consistency of message from each group.
If you listen to all that is being said, read all that is posted what is missing is the cohesive, get behind plan to transition the industry off the generation 3 portals and on to what I believe is to follow.
National, regional’ town; hyper-local property platforms that are bespoke to about 3500 activity centres all feeding off a single feed that looks after an agent’s own web system (credit Jeremy Tapp) and the aggregating platform but with all enquiries and traffic directed back to the individual agent or affinity group.
For 12 years I’ve been told it wasn’t possible, in January I proved it was and here we are 2 1/2 month later and suddenly I’m the one reining in the ambition of what is now very much a possibility if Mr. Brookes Johnson doesn’t realise the weakness of his position, his model and his tech.
I too have always had great respect for the abilities of Jeremy Tapp and would expect a good deal of credibility in anything he can devise for our uncertain future.
I met with Jeremy on my way up to see Richard Shamsi ahead of the merger of Primelocation and Findaproperty into Zoopla (October 2011)
I explained the concept of a cirrus system that puts agents at the centre of property search.
If anyone is uncertain what it is I have built talk to Jeremy and ask him to explain something I have been working towards for a very long time. I’m not sure what happening with the phones at Homeflow during lockdown but I have Jeremy’s number and permission to pass it on if you can’t get through. Same with Alex at Estate Apps, he is trapped in Columbia but is Whatappable.
We are off at the end of the month, our leads from OnTheMarket, were more, even before COVID-19 virus started. On valuations no one ever asked about Rightmove, at one time that was the first question that they asked. We are getting leads on Facebook growing. We need to set up a local portal for the West Midlands, with all agents onboard , except corporates and Shxt Bricks.
#Local portals whether by region, town or specific niche are a spin off bi-product of whats already been developed.
The thing that breaks the G3 portals ( Rightmove, Zoopla, OTM) more than the subscription is that as a small data systems that will challenge them are focused on small groups of agents operating in a specific location or selling a specific niche of property.
Interesting thoughts Chris, didn’t your business go bust last year with lot’s of people being left out of pocket?
Not sure you should be telling everyone else what to do with their business strategy?
What an a$se. There’s always one utter plankton to spoil the tone of a thread. Go and have a word with yourself will you?
Hear, hear Property Pundit.
Interesting post Seller0169 – but almost all of your posts are pro-RM 😉
Any comment on the RM PR piece two stories below? What happened to the Xmas bounce?
Yes, we know that the increased search on sold prices is EA trying to track properties that disappeared from RM PRO(your three databases are a bit of a mess !)
Time for Miles to Ship Out?
That’s disgusting Seller. I’m struggling to maintain my professionalism here. Shame on you. Typical keyboard warrior