Rightmove signs its own death warrant and reveals its true contempt for agents.
Since this blog was published, RM made a subsequent offer of 75% discount for 4 months which is discussed in this post.
Today, Rightmove made the biggest mistake of its existence, and probably marked the beginning of the end of the portal era.
In response to the Coronavirus pandemic, and in what will be seen as one of the clumsiest, most thoughtless and insulting moves ever made by any company in the property industry, Rightmove today emailed it’s customers (with fewer than 25 branches) offering a frankly pathetic gesture of partial deferral of subscription fees for 3 or 6 months. Any deferrals are to be repaid in full in the following 3 to 6 months, probably in the hope of getting some good trade PR for once.
Let them eat cake.
Instead, this “let them eat cake” moment at best shows Rightmove’s lack of understanding of the reality of the vast majority of their client base, and at worst displays the true contempt for their customers that becomes necessary when you want to sleep at night, having made around 70% net profit off the proceeds of the work of your customers.
This gesture assumes that, immediately after a 3-6 month deferral period, agents will be in a position to resume paying the full price PLUS begin repaying the deferred amount. In other words RM thinks that agents pipelines are going to be flowing with cash by August. For that to happen, agents would need to be tying up deals now.
It’s plain to see that deal flow for agents is about to stagnate almost completely in the coming 2-4 months at least. The world is facing a watershed moment, after which life is unlikely to be the same again. By August, many agents will be having to shut up shop completely, through no fault of their own, due to the impact the virus is going to have on society.
Slap in the face for agents.
The message from Rightmove is “we’re rich enough not to care about this situation”. It is a huge slap in the face for its customers.
Anyone making 70% profit from an outdated business model simply by virtue of holding an effective monopoly that is bleeding its customers out of business, needs to have a word with themselves.
By contrast, Roman Abramovitch has offered to pay for the hotel accommodation of nurses and doctors in London in response to the virus.
Rightmove has offered a short term interest free loan, to the customers who are the source of its massive profits. It’s truly insulting.
The beginning of the end for portals.
This is the beginning of the end of Rightmove’s extraordinary winning streak. It has been the winner, but agents have been the losers. The comment threads in today’s stories on Estate Agent Today and Property Industry Eye are overflowing with furious agents, many saying that this is the last straw and they have handed in their notice to leave today.
The thing is, it highlights another, wider problem. The charging structure of all portals. Fixed monthly subscriptions for agent offices, when agents can range from having a handful of properties to a few hundred, simply isn’t fair. It’s almost as if the portals are in denial about how internet based businesses in the rest of the world charge-on-a-pay-as-you-go, pay-only-for-what-you-use, priced-according-to-value basis.
There has also been a trend of increasing overall numbers of leads from portals, while underlying transaction volumes fall, making the value proposition from portals weaker and weaker.
OnTheMarket was always doomed from the outset, because it was the brainchild of Knight Frank, Savills and Douglas and Gordon who just wanted a share of the portal profits for themselves. They adopted out of date tech and even more out of date protectionist strategies that were never going to win agents over.
The beginning of the end of the portal era is here. They will be around for a few years yet, but their strength will wane.
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