One of Britain’s foremost PropTech experts says OnTheMarket could still disrupt the portal landscape - but has trust issues following disputes over subscriptions.
James Dearsley says having 50-plus agencies involved in a joint legal action against OTM over the alleged charging of varying fees could damage the portal’s reputation.
"OTM need to listen because I am sure they can stop the legal claims but the allegations are worrying. Misleading early adopters to the concept as they sought to drive sign ups, has contradicted their early and very transparent policies” he says.
"This is particularly worrying over the issue of subscription fees and whilst I believe they can resolve the legal issues, I am not sure they can resolve the trust issues that will result" Dearsley writes on global real estate website Property Portal Watch.
However, he says that although the portal has lacked the funds to create sufficient awareness of its existence and its success as a brand - he describes that as “a big shortcoming” - it has nonetheless hit a nerve in the British agency industry and could end up disrupting the existing portal model, even if OnTheMarket itself fails.
"If nothing else, the concept shows to other portals that agents are not happy," he says.
"That is what other portals should take from this whole experiment. Pushing prices up over time is not a sustainable business model when there is a clear duopoly, is not right for the core market. It may please shareholders but it will not please the customers.
"Portals need to understand the upset and work with their client base far more for the long term health of the portal market" he concludes.
OnTheMarket this week announced its agency membership had risen from 5,700 offices at the start of 2016 to 6,300 by the end of June.
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"Pushing prices up over time is not a sustainable business model" - Hmmm, not sure Rightmove would agree with that one, James!
You could be right there Paul!
However, continual pushing up of prices breeds discontent and so in the long term, it isn't a healthy situation for the incumbent.
I would have thought they're too busy battling court cases to be of any concern to RM and Zoopla.
Wonder who paid the guy to say this?
Hey Ian, just to clarify, I am not sure OnTheMarket will survive but the mentality that it has fostered and exposed, will most likely continue. A very clear distinction.
Can't say I agree James- however the main reason for this is that there is nothing revolutionary or unique about the features or UX of OTM. It was built will the sole aim of reducing agents marketing spend. Unless they can genuinely differentiate themselves with something users cant do without and agents cant ignore then they are doomed to failure. And, unless they do create this, I want them to fail- because, if they dont, they will drop the OOP rule at which point all of us will have to use them which will then add another expense on top of RM & ZPG yet portals dont create leads they simply funnel them. More costs for same revenue.
Well said. So can really talk about it as 'PropTech' then?
Hi Kristjan, again, the point is that OTM as a model may not survive but the mentality of change against portals will carry on.
I actually believe all portals are on a slippery slope because they were built for an age before social and before the internet got going. Portals are all having to morph and change as another, different method/model/outlook will change the way we sell houses for the next two decades is going to come along.
Play this game. Go to Google Trends and put rightmove into the search bar. This opens a page where you can compare other search terms. Add On the Market and then add Zoopla and see what kind of distruption OTM is causing.
What matters is what consumers think, not what agents think consumers think.
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