OnTheMarket chief executive Ian Springett has told an agents’ conference of the strategy for his service - including a prediction that if current ‘free’ users started paying, then the portal would be self-funding.
Addressing the Relocation Agent Network conference on Friday Springett displayed a slide giving the relative agency membership of each of the big three.
Using publicly available data he said Rightmove had 14,585 independent High Street agency branches plus 2,000 corporates and 1,000 online/hybrid/off the High Street offices.
Zoopla had 12,264 independent High Street branches and, like Rightmove, some 2,000 corporates and 1,000 online/hybrid/off the High Street offices.
OTM had 11,500 independent High Street offices.
Springett said OnTheMarket’s institutional shareholders - those who put some £30m into the portal during its IPO process late last year and early 2018 - were happy with the strategy adopted by the portal. That was “addressing what the customer wants, keeping the fees sustainable in the long term, and then allowing us to build other revenue streams.”
He went on to say: “If we’re able to get the backing of the industry - of all the people currently using the site but not paying for it - if they all decided to pay, then we’d become self-funding.”
He also said that agents had the opportunity to influence OTM policy as they formed 70 per cent of the shareholders currently.
But he warned: “In due course they’re all going to be able to sell … and if the majority of the agents’ holding is reduced and reduced and reduced then the influence the agents have will be more limited.”
Tomorrow OnTheMarket returns to court for the next instalment of its battle with Connells-owned agency Gascoigne Halman.
The latest action is likely to last three days in the Court of Appeal which will hear Gascoigne Halman’s challenge to a ruling that cleared Agents Mutual - formerly the parent company of OnTheMarket - of anti-competitive activity with its one other portal rule, which existed until early this year.
In July 2017 the Competition Appeals Tribunal judges, after a lengthy consideration following the tribunal itself, decided that OnTheMarket’s ‘one other portal only’ rule was not anti-competitive.
The tribunal had been hearing a claim by OTM’s parent company, Agents’ Mutual, that Connells-owned agency Gascoigne Halman was in breach of contract. Since that time AM has become a wholly-owned subsidiary of OnTheMarket plc.
In 2017, after the CAT verdict was announced, it was agreed in court that Gascoigne Halman must pay £1,243,248 as an “interim amount” pending a definitive decision on costs.
At the time Connells Group issued a statement hinting that it could appeal at some time in the future: “Gascoigne Halman is surprised and disappointed by today’s Competition Appeal Tribunal judgement. We are considering our position and will consequently not be making any further comment at this stage.”
Connells is not commenting on the case and a statement from an OnTheMarket spokesperson says: “Having taken appropriate legal advice, the Company remains confident that the judgment of the Competition Appeal Tribunal will be upheld. As litigation is ongoing, we have no further comment to make at this stage."
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" a prediction that if current ‘free’ users started paying, then the portal would be self-funding."
Really! Whats that??? A business that charges customers might be able to survive without massive hand outs from the city. Wow. This is powerful stuff.
OTM can have all the listings in the world.... it means nothing without visitor traffic. The simple fact is that regardless of whether they charge the "free agents", no amount of money will create the same amount of traffic that Rmove and Zoopla get.
You dont beat strong competitors by being a "me too".
A better strategy may be
A) focus everything on dominating mobile.
B) focus on Agumented Reality tech (pokemon for property) and hope to catch Rmove and Zoopla napping in about 5 years when it goes mainstream.
One thing is for sure.... behind a lot of "city money" is some real person who is hoping for a return on their investment, to help pay for something important to them. They probably werent expecting it to be burnt like monopoly money while a company works out a way to "self fund".
Had to giggle here about the " prediction that if current ‘free’ users started paying, then the portal would be self-funding" - touch of the Del Boys - "this time next year rodders"........................................
Errrr...haven’t we heard this before!
Self funding means profitable right?
Lets not get carried away.... it could mean....... drum roll.... breaking even.
This is the key point.
"He also said that agents had the opportunity to influence OTM policy as they formed 70 per cent of the shareholders currently. "
But he warned: “In due course they’re all going to be able to sell … and if the majority of the agents’ holding is reduced and reduced and reduced then the influence the agents have will be more limited.”
So in a nutshell, OTM is a third unwanted corporate portal which will go the same way RM and ZPG went, will ultimately be controlled by external investors as increased ARPA is the only way to keep them happy, and the whole charade will be exposed for what it was - an IPO agenda from day one with no long term benefit to the industry.
They won’t continue to pay after the free period, THE END
It's a shame online agents like us, very well known in the Leicester Market, aren't deemed to be bona-fide companies to join their platform.
Don’t feel too bad Andrew
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