An article in Investors’ Chronicle says the dominance of Rightmove and ZPG in the portal market could be under threat from OnTheMarket.
The article points out that back in 2001, Rightmove’s average rent per advertiser was £100 per office per month - last year the figure was £922, giving a compound annual growth rate of 14 per cent.
As these figures are averages, the article points out, many subscribers evidently pay more - “over £1,000 a month, and some as much as £1,500.”
The article says: “Suddenly, OTM starts to look attractive, but it needs to gain a greater market share to be able to fund further growth. And at the moment agents are being brought on board without having to pay a fee.”
However, it warns that OTM’s recent growth - it now claims to have around 50 per cent of branches listing across the country - is down at least partly to having low-cost or no-cost deals with some agencies.
“The revenue stream will be turned on when the model achieves critical mass. At this point, the idea is that agents will start to pay and save money by leaving one of the other portals” says Investors Chronicle.
It asks how Rightmove can respond to this, given that ZPG is now part of a larger landscape, having been taken over by a US company.
The article says it will “be a few years yet” before agents start to switch off from Rightmove, and it suggests the dominant portal - which reports its figures to shareholders in 10 days’ time - may invest heavily in marketing and technology to combat any competition from the challenger.
“Rightmove can’t match pricing without demolishing its bottom line, and there is no way that it could buy OTM because 70 per cent of the shareholders are the estate agents themselves” says the article, concluding: “So, having nearly doubled its profits in the past four years, and trading on nearly 30 times forecast earnings, Rightmove’s share price must at some point start to look vulnerable.”
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Last week i bought a significant number of share in OTM. This is going only one way. Rightmove have broken the trust of 95% of the market with continually raising prices and allowing pay upfront agents to destroy their own business model.
It's unfortunite you have been duped so badly without relising it 'house seller'. Share prices reflect the value of a business, OTM will never be worth much. The big gap they have, is the many millions in marketing budget each year to grow and sustain the business. The huge lack of income from agents, and additional costs bringing on and managing thousands of free branches on free contacts given these past few months will cause big problems next year, and there after.
I agree with Rob. I would own Rightmove all day long. They have tremendous pricing power. I just don't understand why they don't do a Purplebricks themselves though and put estate agents out of their misery.
Yes, and pigs might fly.
I think there is change in the wind, watch this space.....
Rob-sorry to disappoint but I bought low and I am already quids in .OTM have a great upside.
How much have people made
out of PB -how much money do they make ?Great service ?
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