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Wouldn’t it be idyllic if you only had to visit a single website to look at all the available proper- ties on the market? Time saving for house- hunters, sure, but is a monopoly ever a good idea for any area of commerce?
Rightmove might not technically enjoy a pure 100% monopolistic position, they do have some competition, the main one being Zoopla, but they seem to act as if they do.
On the front page of this month’s issue we’ve already covered the various ways people look for the next home, so let’s add a bit of context here. Rightmove is merely a venue for property details on the internet. It’s not rocket science what it is and what it does! The company own a domain name (their brand) and own/rent space on servers to host
their website. That is it!
In close association with rummage4property
PRINT ADVERTISING STILL WORKS! Rightmove has one of the highest profit margins around
They don’t manufacture anything, they don’t even own the materials that are vital for their continu- ance as a business! Without property details, they are nothing!
Estate agents supply all of the listings content to Rightmove completely free-of-charge. Actually, agents have to possess the means (software) to be able to transmit the property data to Rightmove; another cost that has to be borne by the estate agent.
This is where the situation gets truly ridiculous. Rightmove has millions of visitors and enjoys many billions of page impressions per year. Imagine being able to monetise this massive audi- ence by, say, third party advertising or sharing data, they wouldn’t need to charge agents at all, right?
NO - WRONG!
The very same agents who supply all of the listing content, without which there would be no Rightmove then have to pay incredibly high fees to the company for them to host agent’s data on a third party web site.
Compare Rightmove to other digital companies; Netflix who either fund their own content or pay for material from third parties. They NEVER get it for free like Rightmove. They charge the end user just £6.99 a month for a service that could proba- bly be made free by accepting adverts, however, they decline in order to offer a better user experi- ence. Youtube is free to use, content is uploaded at no charge and people submitting content can even have a route to earnings via royalties for their work.
Despite massive profits Rightmove lags in innovation
Take a guess, even a wild guess, at how much Rightmove charges estate agents per month for the privilege of them putting their property details on the internet via their website. £100? £500? £1000? More?
The average subscription is almost £1100 but a fee of £3000 or more for a single branch company is not unheard of. We have read agents reporting that the Rightmove element of the selling fee they receive after completion can be £500 or more. That’s a large percentage of what the agent earns in total. We know of local firms who are on the most expensive package with Rightmove yet have less than a dozen properties available. Over £200 per month per property for them to be on a website!
Rightmove is famous, or rather, infamous for achieving one of the highest profit margins around, consistently 75% plus. Ironically, a close challenger is AutoTrader, another digital business where content is supplied free of charge by advertisers, who are then charged extortionate rates.
On a turnover of £289.32m during 2019, Rightmove had pre-tax profits of £213.56m. Profits have risen by over 50% in just the past five years. How do they manage this? By imposing annual double digit rises in advertising rate, often with no explanation or justification (inflation has been around 2% or less for many years). The company is so cash rich, it spends a lots of money every year buying back its own shares!
A digital company that has consistently made such high profits, you would expect to be market- leading at the use of cutting-edge technology, correct? That they would do everything in their means to ensure its measure by way of user experience quality, be the best available, right? Sadly, you would be wrong on both counts.
The technology upon which the Rightmove platform is built is Generation 3, this dates back to Windows XP. Yes, really, that far back. Despite their clear wealth, by their actions, they are showing they prefer to pay dividends and share buybacks to improving the functionality of their website. The crazy thing is this, Generation 5 available technology is much, much cheaper to operate and maintain.
Eventually every empire ends, Rightmove’s time is near
Rightmove charges are throttling much of the estate agency industry, particularly the small independent firms (<5 branches). These companies don’t benefit from the significant discounts meted out to the corporate plc agencies or the larger independent chains. Coincidentally, it is actually these small advertisers that, collectively, contribute towards the vast majority of Rightmove’s annual profits.
So they make great profits, they’re the No.1 property portal by a country mile, their customer service must be top notch, right?
NO - WRONG! AGAIN!
We do not know of a single business that is despised by its customers as much as Rightmove. Blimey, you should read some of the comments across the industry forums. Most other businesses receiving this type of feedback would have folded years ago.
So, given all that you’ve read over the previous two pages, about high charges, savage annual rate increases and the appalling customer service
endured by its paying advertisers, you’re probably asking yourself just one question; ‘Why the heck do agents put up with this and not just leave for one of the other portals’.
THE ANSWER IS YOU!
They are terrified that, by coming off this bloated dinosaur of a site, you will not entrust them to sell your home; that you may believe a property cannot sell if it is not on Rightmove. Complete rubbish, of course, but it doesn’t stop this myth from being perpetuated. Agents looking to make a clean break are also concerned that you may be taken in by competitor agencies who overstate the need for your home to be on Rightmove. Remember: People sell properties, not portals. Trust your agent.
There are some excellent new ‘challenger’ portals emerging which blow Rightmove’s proposition clean out of the water. We’ll be talking about these in future issues.
www.SAYNOTORIGHTMOVE.co.uk
Want a good example of the level of contempt the management at Rightmove have for their paying
customers? When it became clear the industry was going in to a deep freeze due to the COVID-19 pandemic, Rightmove offered to allow agents to DEFER a small part of their monthly subscription, subject to certain terms and conditions, for up to six months. No discount offered, this was their goodwill gesture. A storm erupted and, after being shamed by huge negative sentiment in the industry, they came back with an improved offer of 75% off fees for four months.
There is no doubt they will seek to revert to previous rates after this. This is where the active campaign that we are supporting, SayNoToRightmove, has come into play. Almost 2,000 individual agencies representing well over 3,000 offices have signed up to send a very clear message to Rightmove; come to the negotiating table with a sensible, fair and viable pricing plan along with proposals to address customer service failings and lack of technological innovation or suffer massive defections. Fees saved can fund a wide multitude of new marketing initiatives to sell property.
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