Over ten years ago, I recall being in a presentation at NAR’s mid-year conference and hearing Gregg Larson from Clareity Consulting predict that MLS services would soon be “free”. I don’t recall all the details, but I believe Gregg was predicting that advertising would replace the per member per month revenue model pervasive in most MLSs at the time.
Ten years later, “free” may finally be here. First, of course, we have RPR, which is offering software to members for “free” in exchange for a license to the MLS data. RPR insists that it’s not an MLS but I think the point is still valid. RPR stands for the basic proposition of “free” software with the right to earn revenue from the MLS listings.
Another example of software for “free” is Listing Book. Instead of charging MLSs or users a license fee, Listing Book has an advertising supported revenue model and they also have some upsell products. This really isn’t too different than RPR in that both are using the listing content to generate revenue.
Both of these business models stand in stark contrast to that proposed by traditional MLS or other real estate software vendors, which typically license the software for a monthly fee. This shift in revenue or business model for real estate software poses some interesting questions:
What I am sure about is that the shift in business model posed by RPR and ListingBook make it harder than ever for MLSs and brokers to evaluate the value of the transactions being proposed, because “free” is very attractive and can blind you to the real costs. At the same time, as mentioned above, I wonder if the real revolution being wrought here is in the way brokers and agents buy software (“free” from their Association) and whether that’s in their long-term best interest.
P.S. If you click through on this Realty Times article from 1999 (also linked above), you’ll see that there was a debate or discussion among no other than Dale Ross (then head of MRIS and now head of RPR), Jay Huffman (MLSNI and REBIG) and Gregg Larson on the topic of free MLS. If anyone has any documents or links or even memories evidencing that discussion, I’d love to see them. I can’t seem to find anything on the web about it other than the Realty Times intro.
I’ll be moderating the MLS panels at Inman Connect NY in January, One of the sessions outlined so far is “Breaking Data Taboos for Fun and Profit.” The idea for this session stemmed from the Connect Create session at Inman SF this last summer, where developers from two companies built two applications in 48 hours and then showed them off at the end of the conference. One of those applications was an agent rating service built by Diverse Solutions using some data from SoCal MLS.
During the demo of that product, Diverse’s President Justin Lajoie commented that he wasn’t sure if the product would ever see the light of day because MLSs would have to grant permission to use the sold data in this way. Brian Boero asked the brokers and agents in the audience if this was a product they’d like to see become real, and the response was definite: Yes, they would.
The question raised was pretty clear: How can MLSs better leverage the kind of rapid innovation available today? One potential answer is to create an API for the MLS data that’s easy to use and understand, especially the terms of use. Currently, the only terms of use for MLS data that are widely adopted by MLSs are IDX and VOW policies. Are those enough? Or could brokers and MLSs create more innovation by developing a new terms of use targeted at specific data sets?
For example, two potential use cases come to mind: (1) syndication or advertising of listings; and (2) aggregate statistical reports. In the case of syndication, the terms of use would focus on the limited set of data needed for advertising the listing and would include an opt-in from the listing broker. Having a standard API for syndication could increase the quality of listing advertising on the web and increase competition among aggregation sites.
In the case of aggregate statistical reports, the terms of use could focus on limiting use of the data for analysis and reporting in the aggregate as opposed to disclosing individual listings. Would a more limited terms of use focused on the aggregate instead of specific listings make it less threatening to brokers to open up the data to new and innovative uses? Are there any terms of use that would be able to be widely adopted or will MLS data use always be limited to policies like IDX and VOW?
Of course, these discussions do not happen in a vacuum. Just yesterday, Google made it easier to see real estate listings on their maps and they’re encouraging real estate professionals to post their listings to Google. Of course, Google has their own terms of use for posting information to their site. We also know that companies like RealBird are using Google Base as an alternative source for listing data, using Google’s API as a round-about way to get at the MLS data.
Is it time for MLSs to leverage the rapid innovation cycle by creating their own API? I’d love to hear from you in the comments below and also at Inman Connect NY.
There’s been a great discussion going on over at Bloodhound Blog regarding whether and when to ask visitors to an IDX site to register. In his post If You Want to Close More Deals, Require Registration, Eric Bramlett makes the case that requiring registration can produce more sales if you have a good follow-up process in place. The basic premise is that requiring registration produces more sign-ups from a wider variety of people (including those not wanting to buy or sell now), and so you need an incubation process to find those ready to do business now. In the comments to the post, there are arguments pro and con for requiring registration, with those who don’t require registration preferring to allow users the freedom to indicate when they want to register, which provides a sort of self-selecting process (fewer but higher quality registrations).
To help our IDX customers find the best options for their site, FBS recently released options in its IDX Manager to allow agents and brokers to specify registration options for each link:
There are a couple of things I think are cool about this: (1) the options can be set up for each link, so you can try different options on different links and compare how they perform; and (2) you can allow users to skip the registration requirement, which effectively turns the requirement into a request.
My personal view on registration is that I think it should be as natural to the consumer’s search activity as possible. For example, it’s necessary and expected for users to register when they want to save something, and that’s the default behavior of our IDX links. If you’re going to require a registration to view content, perhaps requiring for it right up front is the most natural — if you want in, identify yourself — because some arbitrary limit based on time or number of listings or searches viewed is, well, arbitrary.
Overall, as I’ve written before, I think consumers are more accustomed than ever to registering at web sites, and so asking for registration no longer has the negative connotation it once did. I also think registration requirements are going to become more common on real estate sites as VOWs gain popularity. As others have commented, the key is how you follow up. If you provide a useful service post-registration and don’t spam the recipients, the consumer may just become a valuable customer making the registration a win-win.
I also realize that what matters are measurable results. Some or all of these approaches may work better for you than others. That’s why we’ve provided the options, for you to try and see what works for you. As these new options are deployed by our customers we’ll collect data and report back later with which options are producing the most registrations and it will be interesting to see if we can tie the registration data to sales data to measure the real bottom line.
Let me know your thoughts on the best place to ask for or require registration during the consumer search process.
A quick post this morning inspired by a Kristen Carr tweet about Liam Dayan’s post some time ago about using IDX and VOWs together. A quick excerpt from Liam’s post:
Frankly, handled right registration can be converted from being a barrier into being a feature. Think velvet ropes and VIP rooms. Also, that consumer objection to signing up is just generally getting quieter and smaller every day as people’s use of social networking mediums that demand sign-up for participation grows. Add single sign-on mechanisms, either individual or one of the social media platform initiatives like OpenID, etc. and this becomes negligible.
And BTW? There’s nothing in the language of the VOW agreement or any other I know of (big caveat on that one) that precludes a broker from maintaining both of those feeds. That introduces some interesting hybrid UX/reg-path possibilities. This is a very solvable problem.
This is all very relevant to our Summit meetings this week, where we’re covering a lot of material on our customer portals and how they create opportunities for improving service to customers through people data. Go read Liam’s entire post.
I’m excited that Bill Chee will be one of the presenters during the MLS Track at Inman Connect on August 6. The topic will be “From Listing Data to People Data: The Next Challenge in VOWs and MLS Consumer Sites”. In preparing for the sessions, I watched Bill’s 1993 (yes, 1993) “Lions Over The Hill Speech”, which, thankfully, NAR has archived and made available on the web.
Watching the video in retrospect, sixteen years later, is fascinating and instructive. This speech pre-dated Realtor.com, Google, and all the other recent lions. If my memory serves me correctly, the initiative approved here resulted in RIN and ultimately Realtor.com, the most popular real estate search portal on the web today. Interestingly enough, there are some new “lions” over the hill today on that top 10 list, and Google is seen as the biggest lion of all.
One of the key questions I’ll have for Bill Chee at the Inman conference is whether listing data really is a non-issue today because it’s everywhere, or whether opportunities remain to leverage the data quality from the MLS for consumer benefit through VOWs and IDX. Bill said recently at the MLS Connection conference in Portland that “people data” is the key today, and I’m very excited to learn more about how that fits into the site he’s created at Prudential Locations and how that helps him provide better service to his customers.
