The proposed merger between Zoopla and Digital – in a bid to do battle with the supremacy of Rightmove – is being held up while it is studied by the Office of Fair Trading.
While clearance of the deal could be through by the end of February, if the OFT were to decide to refer the merger to the Competition Commission there could be a further six months’ delay.
On Wednesday, a number of estate agents were surprised to receive emails from the OFT asking them for their views on the proposed merger – despite the fact that it was announced three months ago on October 14.
The agents have been given the opportunity to express any concerns, but have been given only one week – until January 18 – to respond.
The comprehensive list of OFT questions asks whether agents consider Zoopla and/or Digital to be close competitors to Rightmove, whether they have ‘threatened’ to switch from one to another and why, and what they feel the impact of a merger could be.
It also asks for agents’ views on portals’ prices, and whether they feel there are viable alternatives to using the portals.
It asks, for example, if agents would consider switching providers if a portal raised its prices by between 5% and 10%. In fact, Rightmove is this year raising its prices by 21%.
One set of questions specifically asks agents for the actual amounts they are paying to each of the big portals.
Separately, the actual merger will involve Zoopla buying the entire share capital of Digital from A & N Media Investments, which is the consumer division of Digital Mail and General Trust, to form a new larger company. Zoopla will then sell back 55% of the shares in this new entity to A & N.
Yesterday evening, a spokesman for Zoopla said: “We can confirm that the OFT is currently looking at the merger to ensure that it does not raise any competition
concerns, as is their normal process with mergers of this high profile.
“Given Rightmove’s dominance, we firmly view this transaction as being pro-competitive and good for agents who have been crying out for a genuine competitor to Rightmove for years.
“We are doing a lot of work with the OFT and are hopeful that clearance will be obtained to complete the deal.
“Once we complete the deal, we intend to change Rightmove’s dominance by being the most cost-efficient advertising option for agents and creating real competition in the market.”
Readers who wish to comment on the proposed merger can email carole.bowley@oft.gsi.gov.uk
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Comments
It will soon be irrelevant look at the Rightmove business plan with the large majority of buyers watching the site Rightmove have the marketing cornered.
As a seller what would I have to do if Rightmove stopped showing property listed with agents?
Correct I would then have to list directly with Rightmove at whatever fee they demanded.
We will all lose, Rightmove will control the market! are we too late already, should we continue to thank them for allowing us to use their portal for a small fee.
Careful. Think about it. Here's an alternative opinion.
Roughly, roughly from Companies House:
Digital Property Group makes £20m in revenue / £2m profit
Zoopla roughly £10m / no profit
Rightmove roughly £80m half of which is pure profit, more than the other two have in revenue combined!
A merger between them doesn't create better competition - it simply reduces it and means you have to be on both at a higher price.
What do you think the play is here.
You put the two together to make £30m in revenue and you rip out £10m of costs rationalise the platforms a bit, cut out loads of the sales, technology, marketing and management teams, where they overlap, dozens of jobs go, offices go.
And you kill the competition between the businesses which keeps their subscriptions down at the moment as they squabble with each other. Once under one roof do you really think that will happen? Just as happened with find a property and primelocation as others have said.
1 + 1 = 3 on revenues
1 + 1 = 1.5 on costs
That's the rationale.
And still there is no effective competitor for Rightmove. It is so much bigger in terms of page impressions or time on site in the month, enquiries generated, or whatever. Unique visitors to the site, which they'll quote till they are blue in the face as evidence they're credible compeition, isn't the point.
It's how long they spend (session length or page impressions) and what they do that matters - not how many people you can throw at the wall through internet marketing, only to have them slide off. The fact that RM don't even bother to articulate this is a measure of how confident they are.
"Perspective" that's true on people coming in the front door, but it's just slinging mud at the wall, which slides off. Just look at Alexa (look at how close they are on visits, then compare how RM move away when you look at Page impressions). It's not accurate, sure, but it's the same picture as the session length article which Rosalind published on here some months ago from Comscore or whoever.
The only thing that stops RM is government regulation, eventually, though not yet. And right now it's still great value for money, which is why they can crank up their prices, even with indelicate timing as agents face a tough market.
So, in sum this simply means higher costs for agents.
And less choice. We'll have to advertise on both as otherwise other agents will use our lack of presence on the remaining number 2 against us. At least right now it's a mixed field with competition between 2 and 3 keeping those costs down, and not needing to be on both as there is confusion and choice in options. This makes an oligopoly - a reduction in alternatives, pure and simple. It means costs go UP as competition reduces.
"Realist" is right. And "Next Years Biggest Headline"
So, as someone else said, be careful what you wish for.
Do yourself a favour - write to Carol now - it takes 2 minutes - save yourself a lot of money next year...
carole.bowley@oft.gsi.gov.uk
Let the government deal with capping RM when it becomes poor value and clearly a monopoly (which it may or may not be already, but is en-route to being, with or without this merger), just like they do with the Yellow Pages.
BristolAgent is spot on. Anyone these days still spending thousands in newspapers and not advertising on all the major portals is a fool and is fooling their clients and not getting the results or doing the business they should be. That said, the portal supplier market is not working properly at the moment because Rightmove has opened up such a lead on the others that they can't close it and would have to spend themselves into bankruptcy to catch up. So Rightmove can charge whatever it likes given the lead it has...and us agents have to grin and bear it. The Digital and Zoopla merger holds out the best hope by far that the gap is closed and Rightmove's arrogance level drops quite a few notches. If the OFT were to interfere with this merger they would be signing all our death warrants from a negotiation standpoint with Rightmove. Just think about it - next time you are face to face with a Rightmove price increase, you will either be saying - "get lost, think i will go it alone with DigiZoopla" or you will be saying "oh, only 25% again this year - thank you so much for spanking me once more...i love it".
The stats from Property Gal are not relevant as they are searches for the brands and do not represent the traffic. We all know Rightmove is a bigger brand and has been around longer and I assume that is why Digital and Zoopla are spending millions on TV to close this gap - millions to advertise our properties by the way which I am very grateful for!
The real thing we are paying for is the exposure that we get on portals (just like newspapaer circulation) and the recent figures I saw show the gap is not huge with Rightmove in lead at 3.5m visits, Zoopla at 2.5m visits and Digital at 2m visits. I am on all 3 and the enquiries I get are about in proportion to this. BUT...on a cost per enquiry basis Rightmove is by far the most expensive, almost double the others! In normal circumstances, I would drop my most expensive supplier (Rightmove) and replace with cheaper (Digital and Zoopla) - or Rightmove would have to reduce prices. But I can't drop them as Rightmove is so powerful and they wont drop prices for same reason (except this merger might make this happen).
All I care about really (as I would think other agents would but clearly dont) is taking care of my clients - that means not lying to them and pretending Rightmove is only game in town. For those Rightmove lovers, have you tested the others recently or have you been blinded by your love? @Hawkeye - saying that the same punters use all portals is not true and you are not telling your cleints the truth but are in fact lying to them and trying to pull the wool over their eyes. Most punters dont shop at 3 supermarkets or read 3 daily newspapers or check 3 portals - some do (a minortiy) but not most. This is fact. I am happy that you and others take this view as it hurts you and your cleints but it helps me.
I always find it amusing when I read on here how expensive portals are. I know we agents like a good moan...but get real - they are incredible value at low single digit pounds per enquiry. I have been around for a while and remember the days not so long ago that it cost me 20 quid plus to get an enquiry from the newspapers.
I agree with all those who caution being careful what you wish for. Here is what may well happen if the merger doesn't go ahead - Digital and Zoopla will overspend on TV and kill each other. Rightmove will watch gleefully as they both go out of business (as so many others have already) and then Rightmove will double or triple its prices.
Simple fact - the portal supplier market today has a very strong player and a few less strong players. The less strong ones can't impact the behaviour or prices of the strong one at all. A more healthy situation which I know would be better for me is to have another strong player who can help control prices. It is called healthy competition - without it we are all going in big trouble .
4 x 60805 (laptop, Iphone, work Pc home pc) = 243220
x 10 ten active applicants to 1 buyer= 2.5 million. Than is still a very long way short of the 44 million claimed unique visitors and only 10% of the total for all the portals.
The figures are wrong however anyone tries to dress them up! A miniskirt on a Moose, lipstick on a pig.
There!.. you see? Mr Hawkeye loves Rightmove.
He is being 'battered' like a fish in a fish shop on Rightmove fees, but he loves it.
Ed, Joanna and Miles love him too, they don't know him but they love the idea that he promotes their business and pays 21% rate increases year on year.
Ed, Joanna & Miles rake in their personal millions and share a bit with their investors. In secret emails they discuss the £80 odd million of estate agency commission they have prised out of the property market to divvy up amongst themselves.
They never stop to think about the market as a whole and how it has shrunk by 50% since 2008.
They just love Hawkeye and his mates.
Goodonya Hawkeye
I'm happy with RM as they have the lion's share of the market. I advise clients on this basis and to virtually a man (or woman) they use RM. Some of my rivals boast they offer properties on X no. of sites and when I tell clients the truth they do not give a stuff for the other sites in any event.
I see no point in offering properties on 3 sites when all the punters look at all of them in any event and the stats shown by Property Gal:
Rightmove 7.5 Million
Zoopla 0.8 Million
Find a Property/Findaproperty 0.9 Million
Primelocation 0.4 Million
If that is so what are you lot bleating about. Get on with your work and maybe the time on market of 241 days will come down!
The OFT is empowered to apply two substantive provisions which prohibit conduct by one or more dominant company which amounts to abusive behaviour: Article 82 and the Chapter II prohibition.
Any conduct on the part of a company which amounts to the abuse of a dominant position in a market is prohibited.
Unchecked price increases in excess of 10% is deemed a sign of abuse under SSNIP testing.
The tests applied under Article 82 and the Chapter II prohibition have two common elements: whether a company is dominant in a relevant market; and, if so, whether it is abusing that dominant position.
Rightmove FAns are into BDSM, they enjoy their abuse.
10,000 estate agents get hit head on by a truck but claim never saw it coming.
Maybe it's just me but do you really believe this merger is positive? The newly formed company WILL make you advertise on all 3 even if 1or 2 don't work. They will cost as much or more than Right move as those that were on 2 years ago will remember it cost £600 to be on all. The investors and part owners that sit on the board of directors for Zoopla are countrywide and connels so they will push prices up for competitors and protect themselves as they did when they owned Right move. The majority shareholder is the newspaper group that when they had a strong an effective product had increases of over 50% but cut circulation to make more titles and get even more out of advertisers.
Not claiming to be an expert on these things but just seems obvious to me.
Because if an applicant uses his laptop, iPhone and work pc to search 3 unique users will be recoded.
41,780,00 should read 41,780,000
do you really think the quoted unique users are true and accurate.?
I have been looking at the figures in detail this week and noticed that if you add them all up it comes to more than 2/3rd the UK population, Men, Women and children. Now something isn't quite right when the quoted 41,780,00 unique users is made up of 6 companies whose unique users total 21,010,000 someone has added 20,000,000 unique users into the figures for the past 12 months!
Let us assume that Rightmove as the source of every single sale in the country each and every month all 60,000 of them that would give KPI figure of less than 1%, the Findaproperty figure would be 1.68%, it is simply bunkum to suggest that provably incorrect figures should be the basis for any sane decision on revenue spend and worse still to think that a KPI figure less than 1% is something worth admitting to let alone heralding is just embarrassing.
Please would someone ask the 60805 buyers each month what prompted them to enquire about the property they bought and then publish an honest and independent report? I would guess that 20% saw a for sale board and then looked at the internet, 40% saw a newspaper advert and then looked on the internet 40% only looked at the internet and 20% visited an agent’s office.
Yes my figures add up to 200% but as that is standard practice I felt I ought to follow suit.
All this commentary on monopolies in interesting but is not the point.
What is the point is 'competition'...and I mean real competition in the sense that you have choice and the service provider cannot dictate terms to you at will. The fact that Rightmove price increase have averaged about 25% every year for the last 5 years shows that there is little choice and competition in this market.
I think we had better all pray that this merger gets approved...and fast...or else we will be looking at 25% or more for the next 5 years. Rightmove has demonstrated both with its attitude and increases that it cares little about the agent and only about its own profits, so just imagine what fun they will have if the OFT block this merger.
Start praying colleagues and stop messing around OFT - this merger is exactly what the market needs and if it doesnt happen, you will be to blame when agents are paying £2,000 each month to Rightmove in 3 years time!
Who cares? I am going to make the right move to a prime location in the pub. And I will have a monopoly on beer.
Not Enough..... "Once you get your head around the idea that the portals, and in particular Rightmove sell their services to Estate Agents, and therfore their market is Estae Agents"
Have you been drinking?
Is Tesco's market shoppers - or products?
Is Fords market Cars or drivers?
Is Microsofts market computer users or software - should they change their name to MicroUser?
Dont confuse product/service with customers. On your logic - the only market IS customers not what they sell Clearly bonkers. Ask your mother if you can stay up late and read some basic economics.
@ Not enough
"The market is not the clicking old bean. It is Estate Agents who are the customers. "
Old bean - you are totally wrong. The market is the product or the service - customers are a result.
You shop around for a product - you dont shop around based on the number of customers.
Tesco take £1 in £7 of peoples money - they still have to be competitive or they wouldnt. For the record, their market share is not dissimilar to Rightmoves.
So - why so many customers? Is their success a failing?
@not enough @wrong perspective @you are an idiot et al
You are probably the same person - you are also like a piece of fish in a chip shop. Battered.
Monopoly: Market situation where one producer (or a group of producers acting in concert) controls the supply of a good or service, and where the entry of new producers is prevented or highly restricted.
Nope - not a monopoly then.
Simple facts
@anon - good points well made.
In terms of the stupid comments made - consider this.
Globrix has 100% of agents on it. More than RM. Its free. Is that a monopoly as well - but a good value one?
No - so the number of agents who are customers cannot make a monopoly - if they did - then there are 2 monopolies - I trust that concept is not lost on people.
You are of course correct - a monopoly exists because of the product - not the number of customers
Rightmove has so many because every agent knows its the most effective source of traffic and leads. If it wasn't - it wouldn't be.
Breaching competition rules is when Microsoft prevent choice as every PC had it pre-installed.
Finally - remember - the OFT aren't investigating RM. That proves they cannot be a monopoly - or they would.
Read the Enterprise Act - and you will learn why the merger has been referred. Simple.
Its amazing how ill informed some people are - and using it for RM bashing. Grow up - this OFT issue was nothing t do with Rightmove. You have just hijacked it for your own ends and to get some free airtime. In doing so - you look silly.
A monopoly exists only if a material product or service is only available from one supplier or company. Clearly this is not the case.
Yes Rightmove have almost every agent signed up - but so does Facebook - doesnt stop people using Twitter, Google+, My Space and others as well. Its just one is better and more prevalent.
Yes I get the comment about clicks - but ultimately this is the value of the product. If RM's ROI was poor, they wouldnt have 14,500 agents signed up.
The average is NOT £5,600 - thats a silly comment as it fails to note how many offices an agent has. An average is not indicative of the extremes it represents. Cost per branch would make interesting reading.
And why do some get discounts? 2 reasons - bulk listings and dont forget - who started it with their investment and risk - Halifax, Countrywide plc, Royal & Sun Alliance, & Connells.
35% of my Portal spend is on RM. The rest is on PL, FAP, Zoopla, Email4property , Gumtree etc,
RM has 40% market share of clicks - so that seem like value in simple terms.
PL is the most expensive and produces relatively low traffic, but of high quality and it generates instructions.
Facebook is free and generates more hits than all but 4 portals. Globrix is free and has the highest traffic flow.
Rightmove is optional - why not leave? Why - because it works.
This is a very complex matter and dismissing a company as a monopoly on the basis on the number of customers when other suppliers exist undermines their success, investment and innovation. This is why they have near whole market of agents.
If the merger goes ahead, which it will, then the newCo will have a bigger market share and may replace RM as market leader - who knows.
How can my few hundred quid a month (including Local Val Advice and banner listings which I CHOOSE to have) be poor value?
If i was - I would happily opt out.
Whoever said £5600 average is comparing multinationals with sole traders. We pay £400 per office. Less than tdpg. That's value. Rightmove is good because it works, invests lots in Seo and advertising. Their success is brand awareness. As an economist - I can assure you it's not a monopoly. The number of agents is not the point. It's the product which creates a monopoly. And oft were discussing a merger which would create a market share in excess of 25% - so referral under enterprise act is statutory and nothing to do with rightmove.
Once you get your head around the idea that the portals, and in particular Rightmove sell their services to Estate Agents, and therfore their market is Estae Agents and not internet browsers you can see the problem.
If you then pretended you were an OFT layman casually browsing financial news items and you noticed Rightmove had produced increased massive profit margins year on year from a shrinking customer base, wouldn't you be even just a little tad interested in how they achieved this?
The market is not the clicking old bean. It is Estate Agents who are the customers.
Rightmove are almost at 100% of their potential market share, how many more ESTATE AGENTS can they bill?
The clicks are not the market.
Very interesting rumours (or not) around about this merger and whats going on and not going on
May lead to some upset people on here reading the comments being made
Look at the SSNIP test OFT use to define a monopoly.
The application of the SSNIP test begins by considering the products or services of the type supplied by the firm under investigation and asking whether ahypothetical monopolist with control over all of these products would be able profitably raise the price of those products permanently by 5-10%,
We Agents know Rightmove not only can... but do.
The monoply is defined by prices charged to customers. In Rightmoves case the customers are Estate Agents, NOT THE FOLKS WHO ARE CLICKING.. THE CLICKING IS NOT THE MARKET, it is the billing.
all very interesting - but I think this is about DPG & Zoopla.
Rightmove is a sep. issue. And for the record - its not a monopoly - thats a ridiculous comment.
Let me educate some: A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. (Properties on the website available to customers - er, No)
When not coerced legally to do otherwise, monopolies typically maximize their profit by producing fewer goods and selling them at higher prices than would be the case for competition.
As they dont have exclusive products, and 60% market share lies with others - its immaterial.
Its like saying McDonalds has a monopoly because it has more outlets and sells more burgers. You can still visit Burger King.
Some people just dont understand.
Its not a monopoly - they offer the same service as other providers and share many customers. They have over 40% market share of unique users - that's less than half. About the same as BT.
Monopolies tend not to share customers and has 100% market share of a product - the clue is in the name.
@very rude know all
Hang on - your figures are a tad misleading as they fail to reflect how many branches an agent has - an average means little
I have several offices. I pay per month:
RM £4000
PL /FAP: £4500
Zoopla: £900
So, based on the share of unique users - RM looks good value
And - economies of scale point really blows your stats out of the water as a logical argument
@Very Rude Know All (confession is good for the soul)
When you go shopping, and buy a multipack, do you not expect a discount?
If you take series booking in a newspaper do you not expect a discount over a one off insertion?
If someone asks you to sell 25 flats - would you not give a favourable rate over the person who offered just one?
Get real. You really expect Countrywide to pay 1000 times the price of a single office branch? Rightmove's value is in the number of properties it lists.
Its the same for every business and every product. Economies of scale.
The point about market share is a key point
If Rightmove turnover is £81,556,000 and they have 14,500 agencies subscribed. Is that just over £5,600 per year each?
Oh no! Monopoly, charge the indies what you like and 'mates rates' for Corporates. £5,600 is the average. Corporates pay a lot less, inies pay a lot more.
What do you pay?
What is the competative alternative the corporates can use to lever these big discounts? On what basis do they get a discount? They have no alternative but to use Rightmove too, BUT YOU PAY FOR IT, it's like tax.. are you enjoying it? You subsidise your corporate competitors.
Great innit?
@Interesting @Perspective and @the other bloke
Of course, the erudite agent will understand the point. A monopoly is not about the number of customers - its about the product they provide.
If a company has 100% market share of a commodity (i.e buyers etc represented by unique visitors), they will have 100% of customers.
As this share falls, so will the number of Estate Agents feeling compelled not to miss out.
So, Mr Wrong Perspective, try to see the point being made. If Rightmoves share of Unique visitors fell to 10% - how many agents do you think would remain paying their fees?
As such, perspectives point is an extremely interesting and insightful point and he/she is right - its not quite the monopoly I thought
Actually - I get @perspectives - er perspective and its a good point.
The reason Rightmove has a monopoly of agents is because they were perceived as having such a dominant market share. As this falls, and it is, then fewer agents will feel compelled, even blackmailed into advertising as more people use alternatives.
Some peope on here are very rude know alls.
Thanks for the 'clicky' stats. Unfortunately you are looking in the wrong direction for market share. The 'clickers' do not pay the bills to Rightmove, et al. Estate Agents pay the bills to the portals they subscribe to. The clickers are not the market for portals, Invoicing Estate Agents for money is their market.
OFT say there are about 15,000 agents in uk, Rightmove claim to have 14,500 agents subscribed. Do the % then look up OFT guides to 'MONOLPOLY'
I think you will find they qualify
Cheers matie.
This monopoly this is a tad over egged
Unique visitors to the UK’s leading property portals
Last audited figure I saw were:
Rank Portal Unique Users (Mar) Change MoM (%)
1 Rightmove 3,464,000 7.8% 8.6%
2 Zoopla.co.uk 1,812,000 13.0% 11.9%
3 FindaProperty 1,572,000 8.5% 4.7%
4 Primelocation 1,035,000 6.8% -16.0%
That means the merger will create a bigger beastie
When it comes to relative market share, rightmove.co.uk is still in front, while findaproperty.com is just behind zoopla.co.uk:
1. rightmove.co.uk: 44 percent
2. zoopla.co.uk: 22 percent
3. findaproperty.com: 21 percent
4. primelocation.com: 13 percent
@who is that twit
but if you 'slag off' your colleagues for having an alternative opinion...... as you did with Ace of Spades.
' merely showing yourself to be ignorant, selfish and totally stupid' - but that's not slagging off is it?
My point remains - I support the merger, I support a credible, single alternative. I am also cautious of creating another Rightmove.
in 2008, we paid for FAP, but not PL. When the merged - I have to pay for both and could not continue as I did. Agents currently favouring Zoopla who aren't on PL may find that the same issue recurs.
If you think ONE new credible alternative will create a dichotomy, you are mistaken. It will create a duopoly and could even increase costs. London agents cannot ignore PL - if they arent on Zoopla, then they may be forced to pay for this as well - just as with FAP acquisition.
But, in balance, Rightmove is good value when you look at the price, the results and compare it to the traffic from a combination of other portals. They are innovative too.
But please, feel free to resort to insults if that is the best way to support your argument, no matter how unnecessary.
Just dont call people stupid for not agreeing - that is far more stupid
Water to your house was suggested because there is no viable alternative supplier to your house other than the supplier you have... just like Rightmove.
You can have electricity to your house from EDF, NPOWER, BRITISH GAS, et al. You can have broadband from even more. Loadsa competition. BUT NOT WITH WATER.. not unless you collect rain or sea/river water or buy bottled to flush your lavvy. You have one supplier only, and only a choice of one.
Rightmove are the same. Yes you can use 'others' but they are the puddles, bottles and buckets in the example of water above. None can hold a cancel to the Rightmove giant as they are.
IT IS A MONOPLY.
Defined by: they can put their prices up with total disregard to their customers and their customers have no alternative but to pay it.
You can be a fan of Rightmove, of course you can. You can also be a fan of water. But you should have protection against either and both if they are a true monopoly. You have your protection from water companies, but no protection from Rightmove.
If you are an agent, you can of course like Rightmove over the other limited offerings, but if you 'slag off' your colleagues for suggesting a competitive alternative wouldn't benefit all agents and all consumers you are merely showing yourself to be ignorant, selfish and totally stupid.
Good luck to the Merger.
Has anyone considered that Rightmove is just very good at what they do?
Should they be handicapped and penalised for being so successful?
All businesses try to improve market share. Its not like other companies are forbidden from starting up portals.
So many other portals simply sold out and cashed in. Why should Rightmove suffer?
@Facts
The half year results are more up to date...and am I supposed to feel a whole lot better that they only made 64% operating margin in their last full year, instead of 71%?
Looks like I'll have to sell my house and all its contents to help Rightmove.
@Shipside's Ampitheatre figures are for the lastest 6 months, @Facts figures are also correct but are for the previous year. Both are correct as far as I can see. Both show tasty profits and combined they show increasing Revenue and profits.
@ Shipside's Ampitheatre
actually - according to their audited accounts, from Duedill.com
Turnover £81,556,000
Operating Profit £52,066,000
Pre-tax Profit £52,245,000
Net Profit £38,535,000
The OFT are (amongst other things) in existence to protect the consumer.
If Rightmove ratchet up their prices and make unbeliveable levels of profit, it is the consumer that ends up paying, not you or I.
In the last half year report RM disclosed that they are making £33.4m operating profit on revenue of £47m !!That is 71% operating margin. What's yours?
See for yourself:
http://miranda.hemscott.com/ir/rmv/pdf/Half_Year_Results_2011_Presentation.pdf
What's does the Plimsoll Report on Estate Agents' margins show? Anyone know?
Retailers would not be able to crank up margins and create a monopoly, or get anywhere near RM's situation.
Rightmove are a disgrace. The OFT must act. Now.
Richard – I don’t work for RM however I have a media background as well as property. A fair point maybe my comment re press should have been directed at the internet in general – we get very little from papers and it may well be different in your neck of the woods however regards the Digital pricing comment this is of course again an area specific quote and certainly not valid in many areas.
As for fees I guess who is to say what is fair - I expect this comes done to individuals but for me £1200 a month to be on the 4 websites actually doesn’t feel is unreasonable – do I wish I could pay less, of course, but I wish VAT was less, fuel prices were and it goes on. I do feel many people here (probably in real terms a tiny % of the industry) think this is going to bring rates tumbling down – we actually pay £20 more for Zoopla and Digital a month now than we do rightmove and were 100% forced or as I say blackmail into joining zoopla (by zoopla) which still sits badly with me – my firm belief is it gives more power to A & N (I think I am correct this is what they will be called) to hike rates up and allow rightmove to continue at the level they are.
The comment based on right of choice – it is there now but in many cases like yourself something you don’t decide to do and stick with rightmove and I believe the question is why?? Simply it is what the customers want and their right of choice and in reality meeting a customers expectation (the reason I had to join zoopla and they knew it!!) at the cost of maybe £10 a month to have their home on rightmove – Is it that excessive when we are asking them to pay for arguments sake £3000+ by way of fees.
I am sure many have had the conversation with digital regards the increases they have made recently and was justified to me when I questioned the merger and rates I was told that they can prove to me they have almost the same visits as rightmove but have to wait for the completion of the merger before they can show them – my thoughts on this were not of a company looking to save money but actually justify more – also considering they produce 50% less for us a worrying claim.
Not meaning to attack you here Richard but just responding to your message and various other comments.
Rightmove told us "We are putting your prices up anyway, we want to help you with brand awareness, so, you might just as well buy more products - it will save you money!" Actually, more likely to entice our competitors to do the same??? We have signed up with the other 2 and agree it is certainly not them that need close scrutiny. We were on the verge of dumping Rightmove and voting with our feet. Why didn't we? Not because it is better or more productive rthan the others combined, BUT, because most of our vendors truly believe Rightmove is THE portal. Their marketing campaigns have eventually brainwashed the public. As soon as the public recognise the current marketing of the others combined can compete, we will certainly ditch RM and will be relieved to do so. In our area we can combine the rest and have a full page newspaper ad every week for less than RM are bleeding us dry for. Hope it comes sooner rather than later. OFT should investigate the bullying tactics but in our experience they seem hesitant to scrutinise the larger players in ANY part of this industry, to include corporate agents, large lenders and solicitiors, banks etc. Perhapsd they should get some teeth?
From Google - Annual Searches on the phrases:-
Rightmove 7.5 Million
Zoopla 0.8 Million
Find a Property/Findaproperty 0.9 Million
Primelocation 0.4 Million
Competition?!!
@Who is that Idiot? .... oh, its you.
Ace of Spades is spot on. If agents didnt pay, then the prices would go down - so opt out. Why dont you? The reason - because it works so well. Its either cost effective because you get results from it or you are wasting your money unnecessarily. It really is that simple.
You cant use utilities as an analogy. Electricity is electricity - so you go for the cheapest - the lights switch on and the end result is the same. Then look at broadband - some is faster than others, so service factors in and its not just about price.
We used to pay £5k for a page in the Evening Standard - why? because 10 years ago, the phones would ring off their hooks on a Wednesday. When they stopped - so did we.
If Rightmove didnt produce better results than others, people would be leaving in their droves - as it is, they are expanding. Supply and demand dear boy.
AofS, try stopping using water in your house.
But what do you do if you think the cost of water to your house is too much? Who or what is your alternative? you can collect rainfall, go down to the seaside with buckets, buy bottled water at supermarkets. Plenty of ways to get water.
But you, AoS would simply say you love water, it's a great product, and worth every penny. You would ignore the fact you have no real alternative. You assume the OFT will protect you with water pricing (and so you should).
Rightmove is a monopoly. There is no credible alternative. And we agents have no protection, we just have to cough up.
This merger is great news.
I have never read such nonsense from some people.
This is a mandatory referral to the OFT. Its about Zoopla and DPG. Yet as usual Rightmove bashers jump at an opportunity.
RM is a commercial entity. It increases prices to make profits. At the point at which profits fall as agents decide not to pay the rates quoted, prices will fall. They are not a charity and agents have a choice. With this merger, that choice may be easier to make so its good for all.
If you think Rightmove is a rip off - don't advertise. Simple. Its not compulsory.
I sent a letter supporting merger to the email provided
There is no competition in the sense of service, only competition for our money. I support the merger becuase surely the combo of DPG & Zoopla will be cheaper that the split at the moment. Most people search RM. The fact that we also use DPG & Zoopla is purely because every other agent does & to not do so could possibly lose instructions.
We called our (few) buyers that came to us from DPG last year to find out if they also used RM. Answer was yes in all cases. No need to use multiple sites for selling I suspect and actually would prefer a single brand leader so we are not subsidising multiple TV ad campaigns for them to wage their own battle.
Readers who would like to comment on the proposed merger can, says the OFT, email carole.bowley@oft.gsi.gov.uk
The link is now showing live at the end of the story.
I feel the only problem I have with RM is the inability to fairly compare performance with other portals as RM doesn't appear on analytics sites due to not having link to the agents site. I can measure other portals, but have to reply on stats supplied by RM.
I do not doubt the integrity of these stats, but question whether they are measured in the same way enabling proper comparison.
Rightmoves latest price increase means im paying less. An increase in their core membership has meant im going to have to withdraw nearly £400 worth of products. They tried to get more out of me and ended up losing £350 a month. I suggest we all do the same.
Idiots
Ripoff Rightmove....
I think the Rightmove service is very good value for money. On paper, it looks expensive, but the results are great and when you evaluate it, it is actually very cost effective.
So, on your hate campaign, re-phrase it to "9,999 + agents". If an agent wants to complain, they don't need you to tell them to do so, just so you have 'safety in numbers' as you haven't got the back bone to act independtly.
It's an agonisingly simple decision, like any service or product in the World....if it offers value for money, then great...if it does not, DO NOT USE THE PRODUCT/SERVICE!
Does wtflol work for Rightmove? It is quite clear from the way Rightmove dictate their prices that there is no free market in property portals. It is competition which leads to efficient business practice, fair fees and the best service for customers (as we estate agents know well). There is no right to choose at the moment and the Zoopla / Digital merger will be the one chance to create a large and effective competitior to Rightmove which will benefit both estate agents and house buyers and sellers.
Not dumb, just sensible. Dumber is praising Rightmove for reducing newspaper advertising rates whilst implying that we shouldn't bother advertising in them anyway and ignoring the fact that most of the press discounts come via advertising with Digital!
Richard Copus
Well, I have responded to the questions and broadly support the merger. The referral to the OFT is not a surprise. If the resultant business will have a market share in excess of 25% or a turnover of more than £70m - its usual to refer a merger under the Enterprise Act.
I was more concerned at the questions asked. For example "If your property portal provider increases prices by 5-10%, would you switch provider?" - They seem to be confusing Rightmove et al with British Gas assuming we use one supplier.
I feel the merger is a good thing as presently there is no credible competition to RM with the resources and coverage to offer true competition. Agents complain RM is too expensive, yet their membership grows. As a commercial company, why would they sell services at a price less than they can? I don't like it, but that's how it works.
A strong competitor is needed.
I am a fan of DPG and Zoopla but also Rightmove and I feel this can only be good for the business. My concern is over smaller agents who choose to use Zoopla and Not Primelocation. They may find that this will change as mentioned elsewhere.
Rightmove have increased my fees by 21% in these very difficult times and say if we take a break and want to return they will add on another 40%, I have advised the OFT of their unfair tactics and suggest more agents to do the same, they are using their dominance to take advantage and cripple agents who are already struggling,
Just bear in mind that those on Zoopla but NOT on PL may find that they have no choice but to pay for all or nothing as happened with DPG and FAP merger.
@ Martin Smith
Thanks for giving this link. Readers may be puzzled to see the consultation apparently ran out in November.
I will update readers as soon as I can via a post and also in the story.
Just so dumb - the constant moaning about RM costs, still cheaper and 1000 better than the papers but everyone still does this - where is all this OFT rubish about them - interestingly I believe the websites have reduced the press rates and also reduced the need for so much of it. I am just glad so many agents out there don't care what there customers want...thank you
As for Zoopla and the Digital group - combined we pay more than we do for RM so be very careful what you wish for
Also for us that remember the Prime Location and Find a Property merger - we were made to pay £120 a month for Prime location even though we didnt want it and to this day still dont and get no business from it
The details of the OFT invitation to comment can be found at:
http://www.oft.gov.uk/OFTwork/mergers/Mergers_Cases/2011/Zoopla
Martin
To those who have asked for further details about the consultation, I will chase up the OFT as soon as possible and let you know the outcome.
So far, only a relatively small number of agents have been specifically approached for their views, which is why I have not been able to give a weblink.
EVERY agent in the UK should take part in this survey by the OFT. This is the one chance we have to make Rightmove's obscene profit margins an issue to the Government.
Ros - we need the weblink please. The trade bodies should be emailing their membership databases imploring them to take part. Nick Salmon - can you email your HIPS database?
If 10k+ agents complete the survey in the next week, the OFT will be forced to act.
JFDI !
DON'T BLOW THIS OPPORTUNITY.
Yet more 'government' interference for the sake of it!
It is obvious to anyone, especially the OFT 'experts', that RM should have real competition without the expense of conducting this 'study'
Here are two of the questions asked by OFT. They give the respondent ample scope to draw attention to RM's over-dominance in the market place and its repeated price hikes. The sooner Zoopla/Digital get their act together and provide a credible alternative to RM, the better for everyone. Except perhaps RM shareholders ;-)
What do you expect the impact of the merger to be on:
i. Prices (including listing fees, discounts, etc.) charged by Rightmove?
ii. Prices charged by the merging parties (Zoopla/DPG)?
iii. On balance, the overall effect on prices charged by property portals?
Overall, what do you believe the impact of the merger will be on competition (including, for example, prices, service, value for money)?
Never mind These pair, Rightmove need to be looked at by the OFT with thire variation of charging methods