As you probably know, I have been no fan of OnTheMarket (OTM) over the years. You may see this admission as somewhat of an understatement.
However, I never had an issue with the fundamental idea of an agent-led portal opposing the might and power of Rightmove, whose dominance has - in my view - threatened the profitability and credibility of the industry.
My problem with OTM was that I disagreed with its strategy because I didn’t think it would work and Ian Springett didn’t take it very well when I publicly articulated my views.
The reasons why I didn’t think the strategy would work revolved principally around two fundamental flaws, the one other portal rule (OOP) and the determination to topple Zoopla as the number two portal before tackling Rightmove.
Apart from general distaste for and suspicion of the approach, I felt that the one other portal rule would cause the proposition to run out of steam and prevent the business from reaching critical mass.
I disagreed with targeting Zoopla, not just because I saw it as a spectacular business which was actually becoming a real challenger to Rightmove, but because I felt that by targeting Zoopla, OTM would strengthen not weaken Rightmove and make matters worse not better.
You could argue about how right I was, or how it could have all worked out if only the industry had given OTM more support, but it’s irrelevant now and the purpose of this article is constructive, not a belated ‘I told you so’.
No, the purpose of this article is to hold out an olive branch to OTM because I think there is now a real opportunity for its new proposition to succeed where it first failed, provided of course the people behind it have truly learned from their mistakes.
This volte face shouldn’t surprise you too much because I’m a pragmatist at heart. Mostly I just want to get the job done. Anyway, if Donald Trump can befriend Kim Jong-un and Vladimir Putin there must be hope for Ian Springett and I.
As Shakespeare so eloquently put it in The Tempest: "Alas, the storm is come again! My best way is to creep under his gaberdine; there is no other shelter hereabout: misery acquaints a man with strange bed-fellows."
What I am proposing is more of an alliance of expediency, in our mutual interests, in the interests of fair competition, in our customers’ interests and in the interests of the industry.
As has been pointed out recently in this publication, several pundits and commentators are now calling ‘peak Rightmove’, one or two are even suggesting it could be vulnerable to OTM, if of course OTM manages to break through in market share of property listings and consumer traffic.
What I think is that its current proposition for new members is a bit of a no-brainier and if it takes the initiative, I’m certainly open to it. Agents have nothing to lose by signing up to the new OTM , the OOP is gone and with it the need to dump Zoopla, so what have we got to lose? I rarely, if ever look a gift horse in the mouth, so let’s see if I get that call…
However, let’s say that OTM does sign up the great majority of agents between now and the end of the year, how will this provide a credible threat to Rightmove? Well, by next spring the ban on upfront letting agent fees will come into force and agents who want to survive will need to increase their incomes from other sources, or economise. It’s this need to economise that provides the threat to Rightmove because of how expensive membership has become.
If by then OTM is a credible alternative and if Zoopla continues to become more attractive as well as remaining an economical proposition, then agents may decide to drop the more expensive Rightmove.
If this happens, and a significant number of agents voluntarily drop the leading portal then its pricing power will be broken and we will have three portals vying for our business on a competitive basis, which, as I have said, is good for everyone, except Rightmove.
For those of you who can’t imagine significant numbers of agents dropping Rightmove, think again. They are already a lot weaker and vulnerable than they look. Gone are the days when vendors insisted you use them. The landscape has developed infinitely since then and continues to do so at an exponential rate.
As the clients of the online agents who merely list properties on the portals are finding, there is a lot more to estate agency than that. If you don’t know what I mean, you probably aren’t an estate agent, or maybe you shouldn’t be.
I see this in simple binary terms. Way back in 1989, when I started my first branch in Crawley, there were two local property papers, the News and the Observer. I learned that increasing the number of pages I bought and running ads in both papers made no significant difference to my business.
If anything, doing so distracted my staff from doing the real job and gave them the wrong message that it was passive advertising, rather than their efforts, that was responsible for our market share. This lesson cost me a lot but once learned it saved me a fortune and never again have I thrown money uselessly at pie in the sky advertising. Like I say, good agency is about much more than that.
Let’s call a spade a spade, the industry is under attack from multiple directions. We have a combination of reduced volume in sales and lettings, increased regulatory cost and shrinking margins.
Whatever we do, there are going to be casualties. Of that I have no doubt. There will of course be winners of this crisis and they will be the smart agents who control their costs, protect their margins and look for opportunities while sticking to the knitting and keeping the faith. Another winner could be OTM. They have a second chance, not everyone gets one. Let’s see if they take it.