Will OTM replace Rightmove?...

By Simon Shinerock

At the time of writing, Rightmove had a market capitalisation of just under £4 billion, down almost 15% on the news OTM is subject to a takeover bid by the CoStar Group - a New York listed company with a capitalisation of over $33 billion. It’s also worth noting that Rightmove’s shares are nearly 30% down over the past two years, possibly in part due to its poor relationship with its customer base and a general perception it has nowhere left to go in terms of increased revenue opportunities - there is only so much juice in that lemon.

It seems an age ago but some of you may remember I was once a fierce critic of OTM back in the days of Ian Springett and the ‘One other Portal Rule’. At the time I was a strong supporter of Zoopla and I thought OTM’s strategy of attacking them instead of Rightmove was ill thought out (dumb) and characterised a management team from a bygone age. However as proof that a leopard can change its spots, I have since become a supporter of OTM under its current CEO. Jason Tebb has completely changed the ethos of the company, showing a high level of business nouse as well as the ability to build and in my case rebuild strong relationships with its clients

Nevertheless, in its current form, OTM simply lacks the firepower to really threaten Rightmove and although I still have some regard for Zoopla, I don’t believe they have the required ambition to become number one in the portal space. That said, it may be that we have to redefine what we mean by ‘the portal space’ as we transition into a far more (artificially) intelligent property search environment. In a world of AI-driven property searches and agent-empowering technologies, where does that leave traditional portals?

Increase quality

The holy grail for estate agents would be a portal that supported them and helped them develop rather than act like a parasite sucking the life out of them. OTM and Zoopla have already recognised this path to some degree, Zoopla’s evolution doesn’t go far enough and OTM in its current form lacks the resources to deliver although it seems to get the point. Being specific, what I mean is enabling agents to develop the potential of their own client bases and their own websites to increase quality lead generation and nurture as well as offer their clients a full range of accessible services under one roof.

This ‘property hub’ concept is not new and has been pursued for years by many players but the real win would be to see these gains benefiting agents directly rather than aggregators and supermarkets. Valpal is a great example of agent empowerment at a reasonable cost, last month ValPal delivered more vendor leads to estate agents than Rightmove - despite only having about 25% of the high street market. What’s more, with MovePal they offer a way to nurture those leads and serve them up hot.

For those who like numbers, look at these 88k VP leads in Sept 23 plus 25k Bonus = 113000 for Sept 23. 1.6m leads in total generated over the last 12 months from just 4354 offices.

In the future ValPal will offer a home hub for every agent, add an open market search. If tools like ValPal are the future, where does that leave traditional portals? As agents, isn’t it time we took charge of our destiny, rather than relying on platforms that might not have our best interests at heart?

Whatever the future shape of property search, right now, money still talks and the simple fact is that CoStar has the firepower to take down Rightmove and seemingly the will as well. Of course there will be worries of the ‘out of the frying pan’ kind and I believe agents have the right to ask for reassurance about those worries. What we really want is recognition that it’s our properties and our hard work that breathes life into the portals and that without us they have no business.

The best outcome we can hope for from the entry of this new titan, assuming the deal goes ahead, is a Rightmove that has to accept a reduction in its portal fees and an industry that either finds new ways of making money, perhaps by adding real value to the moving experience, or is forced to work on lower, more normal profit margins.

In the meantime, change is happening at such a pace it takes my breath away, it’s hard to say what agency is going to look like in a few short years as so much of what we do is replaced by AI. My instincts tell me there will be a place in that future for skillful agents with the right products who embrace change and offer their clients a combination of a high tech service with the human touch.

Now is not the moment to speculate further though, right now is the time to focus on a potential future where Rightmove is no longer able to dictate its own prices and is forced to value its customers rather than merely exploiting them.

Simon Shinerock
21 October 2023 11:00 AM

Very sensible and pragmatic Maurice. Last year I analysed where our vendor and landlord leads come from and when it came to portals, Rightmove included, it was a joke there were so few, leading to a ridiculous conversation with our RM rep. Our then Acting MD convinced me we couldn’t ditch RM though because of the damage it would do to morale and the target we would become for other agents. They probably weren’t wrong. This year the situation is even more lopsided with RM contributing an even more insignificant number of landlords and Vendors despite us having gone for the top package (again). In the last few months I’ve assumed a frontline leadership position for the first time in more than twenty years. I am pleased to say the basics still work but looking forward the pace of change is taking my breath away, irrespective of this development I can imagine a near future without portal dominance, not because of agent copy but simply because of innovation stemming from AI