Following from Charlie’s great little article yesterday I want to turn your attention to the so called ‘glossy wars’ being run across Australia.

Over the past few weeks I have been receiving emails about a ‘heated’ war between Antony Catalano (MMP Holdings) and Fairfax’s Real Estate Print Guides. You can read a great little article on Crikey here and also The Age article here.

It seems some of eastern Melbourne’s agents including Jellis Craig, and Kay & Burton, are defecting from Fairfax Media’s Melbourne Weekly Real Estate Guide to a new publication being led by Antony Catalano (MMP Holdings) and some law firms with some the local agents taking a stake in the publication.

Now where do I start?

Yesterday’s article by Charlie pointed to a percentage of agents that claim that vendors are somewhat begging to be included in print publications. I call this segment of the market ‘truth stretchers’ or maybe ‘agents with interests in print publications’ is a better phrase. Seriously? Vendors are knocking on agents doors to advertise in print? Surely you jest!

Print Advertising

Print Advertising is a barrier market these days. Convincing a vendor to shell out thousands of dollars for a one day advert that only competing agents look at (a little harsh yes), is hardly a good advertising investment for your vendors. The barrier market I refer to is at about $700,000, this means very few people with properties for sale under this figure would look at a print campaign, hence the ‘barrier market’. This barrier is rising by the year and in a few years print publications and interested agents will only survive on the multi million dollar vendors.

This is not to say print advertising is dead, it will survive in exclusive pockets of Australia, but to middle Australia and below, it is finished!

MMP Holdings

But wait! Why have MMP Holdings and others invested in real estate print media? You only need to read Charlie’s article from yesterday to understand why – dumb money! For some reason real estate agents in Australia are still infatuated with print media and whilst print advertising is in decline it is still a very lucrative market.

Going up against Fairfax is a tough deal and one that may play out for years. The problem for MMP Holdings is that incumbent newspapers will not give up their market share without a long costly fight and most of these publications cannot stand the heat or successfully sell back to the newspapers within a few years.

MMP Holdings will have  need to make an impact fast. Having a group of agents owning a share of the publication is not the smartest move either. We have seen how far that will get you with competing agents in the past – especially if this is disclosed to competing agents.

The biggest problem faced by MMP Holdings aside from money is infrastructure. Fairfax have so many other perks it can offer agents with zero real costs that it will make competing in the long term difficult. Remember Fairfax are combining their print and online divisions, so offering bonuses on the web for ‘loyal’ agents can make life difficult for MMP Holdings.

Funny Money

Something tells me everyone involved in this is playing with other peoples money. There are hundreds of opportunities out there to make money, why would you spend millions of dollars on an industry that will most surely die a slow and painful death?

All over Australia new glossy print companies are going up against incumbents like Fairfax and every time I read an article on this subject I just think why? Are agents that dumb that they will just continue to throw money at something that offers little value for money?

Maybe I am a web snob, but these glossy wars get a little boring after a while.

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Slowly but surely Google Real Estate is making inroads into the Australian real estate market with the recent signing of LJ Hooker on top of most of the major players in real estate in Australia. It will take longer for all of the smaller independent agents to come onboard, however it is clear that this is the beginning of a new era and it is time REA and Domain stepped up to the plate and opened themselves up to the Google way of life!

Why? Because not doing so will slowly end their dominance and when the decline occurs it will be so fast that no maneuvering will make a difference.

Some may argue that Google Real Estate has not made a difference as yet, but these people live in complete denial and it will only be a matter of time before visitor numbers begin declining and Google Real Estate begins its upward March.

Remember, Google only has to get comparative data to make a difference. Google also have a far greater capacity to let people know about it than all other real estate portals in the world combined.

Recently a number of videos have been produced that well and truly show how serious Google is about maps and real estate.

Finding a house on Google Real Estate Maps

Here is one to showcase real estate listings throughout Australia

Here is one on how to refine your real estate search on Google Real Estate.

Real Estate API’s
Realestate.com.au and domain.com.au must open their databases up to the general public to create a whole new wave of web and mobile applications.

I have been pushing API’s with these portals for over 2 years and yet we still have nothing. Maybe Realestate.com.au’s big announcement will include an API?

What can an API do?
As an example any website would be able to carry listings through this API, so community websites, industry websites, councils, agents, even business2.com.au would be able to carry listings, sales data etc. Portals do not need agents permission as agents have signed away all rights to the data when they join these sites.

Signing up should be simple and approval rapid and it should be accompanied by rapidly evolving documentation and examples.

Boon for portals
One other thing we will see is innovation across the board, even things we have not even thought of will take us by surprise, but the biggest boon will be for the portals. It will extend their listings and sales data reach and allow that data to be ingrained across 10′s of thousands of websites across Australia and the world.

Versions
There should be two versions of the API, the free version which carries 3rd parties adverts from the portals and is a little limited and then a paid version that carries no advertising and allows the user to do whatever they want with the data!

Flow on
The flow on effect of this will flow across the industries to jobs, cars and classifieds.

Will this happen?
Don’t hold your breath, large organisations are slow at moving on these opportunities, usually waiting until it is too late. We are fast approaching a time where I think realestate.com.au and domain.com.au will start going backwards unless they really innovate with API’s.

One only has to look at the music industry and the movie industry to see how stubborn incumbents completely ruin their own industries by not embracing and innovating.

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When Telstra paid AUD $636 million for he Trading Post in 2004 many questioned yet another wasted acquisition for the Telco giant (the list is long). Today those questions have been vindicated as Telstra has now shut down the 22 print versions of the Trading Post to concentrate on the online edition. Another hit will come as many visitors to the website would have come from the print versions and the final blow maybe the poor structure of the Trading Post website – as only last year I attempted unsuccessfully to post a product (a free trial offer – that wasn’t actually free) and gave up after I could not work out how to post (it kept directing me to pay).  So I missed out on saying the phrase ‘tell him he’s dreaming’ all because a special offer I clicked on didn’t turn out out be that special after all.

As for another ‘dreamer’ Ron Walker is trying to paint his tenure at Fairfax as a savior telling ABC PM, “If we had continued to rely on the cash flows from the Sydney Morning Herald, the Age and the Financial Review, the company wouldn’t have existed today, so, it’s paid off for us”. Yes Ron, paying $700 plus million for a ‘New Zealand only’ classifieds site saved Fairfax! Fairfax has some great opportunities but the window is closing very fast and buying up expensive digital assets that do not even cover the interest on the loan to buy that same asset is not the answer. I have no idea what Ron Walker has done in his time on the Fairfax board, but I can assure you he will not be remembered as a savior!

It truly dumbfounds me how large organisations such as Telstra, Fairfax, PBL or News Limited rarely ever create a unique product from scratch. They are all very good at buying assets at the height of the market and selling or getting out at the bottom of the market. These companies already have huge traffic to their major sites and massive databases in the classifieds arena, be it in cars, jobs, houses or general classifieds., so it should be relatively easy for them to create successful new products and increase shareholder value.

They need to get out of the habit of buying up websites for 100′s of millions of dollars and invest a few million each year in a ‘Black Ops’ style tech team to come up with new and exciting products from existing databases/systems they have.

This team should be able to tap into (read) any database and should be able to create new products from scratch without someone telling them ‘no you cannot do that, this will affect this or that’. The idea is that you create new products and test them in markets across your digital assets. This team should be able to go and meet with any division of the organisation and be granted access to any data. Yes, you must have some oversight, but that is at the end of the process, not at the beginning – if a product doesn’t fit – or is too risky – it gets shelved.

The alternative is to continue dying a slow death and live in denial. There does come a time when banks will abandon these companies or their money will run  out and for some of them the only way to survive will be to do what Telstra is doing and selling off or closing down assets.

This is the digital era and web/mobile based products will be everything to these companies in less than 10 years.

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Much has been written about newspapers and their demise. We have all read stories of how newspapers are bleeding all over the world and in cases like the Los Angeles Times (and The Chicago Tribune) filing for bankruptcy in the United States, not to mention that our own traditionally profitable newspapers are slowly losing profits and revenues.

Change
However, Rupert Murdoch had gone on the offensive and has spoken of the possibility of newspapers charging for access to online content, he has also flagged the possibility that newspapers could be delivered only in digital within 10 years.

In the last few weeks the heavyweights of the newsprint world gathered in Chicago to come together to launch a group offensive against free content.

Today newspapers only push a certain amount of information directly to their websites and hold back on unique investigative information and journalism until after it has appeared in the print versions, I can understand this, but it is not sustainable.

Newspapers have to return to their roots to survive, they have to understand that the reason the majority of people read their content, is because it is unique not because we want to hear a, (we can get that anywhere).

Organisations like Fairfax and News Ltd over the past 20 years have invested more in sales and marketing and less in investigative journalism and this will end with the digital newspaper revolution.

Skepticism
Newspapers believe people will pay for this content but I am skeptical for a number of reasons. The first being that newspapers have invested less and less over the years in investigative journalism and more and more in marketing and sales. Secondly the classifieds have been bleeding to death because online just kills it in so many ways (content, days on market, accessability). This has been one of many factors in the demise of print and many newspapers have just resorted to tacky journalism trying to reach a younger audience whilst alienating their base.

Light
However, there is some light at the end of the tunnel. The Kindle device has proven that even an ugly little black and white wireless reading device can be popular and profitable. All it needs is for a company to enhance this offering and take it to another level (cue Apple and its touted color reader) and we have something that all newspapers need – a vibrant competitive wireless newsreader market.

Real Estate
This is your digital newspapers, so digital newspapers will allow agents to deliver targeted listings with branding, digital newspapers will give you a canvass to work with and allow you to brand your agency around your listings (you hope), unlike traditional newspapers – digital newspapers will allow you to carry a wealth of property information and local sales data alongside those listings.

Subscriptions
So why would we pay for this? You still buy magazines don’t you? Wireless Readers will demolish the gossip/celebrity magazine industry but it will revive the newspaper/unique content industry because we WILL pay for this – but only to a level.

Wireless Readers will be thin, light, color and black and white and have 6 – 10 hours battery life, they will serve a number of purposes but digital newspapers/ebooks, email, web will be the primary market.

The price? $9 a month? That’s about the money, it is all about volume – and newspapers will actually see a revival and in the cases of companies with quality journalists, a good news reputation and content like Fairfax (Sydney Morning Herald – The Age) will thrive, whereas papers like the Telegraph and the Herald Sun will stick to the print versions longer and die a slow death (blue collar)

Fairfax will eat News Limited in Australia for breakfast for another reason, classifieds. News Limited pretty much owns the tacky side of print in Australia and only has one newspaper it can be editorially proud of, The Australian. As for online classifieds, it has realestate.com.au and even that has a limited shelf life given its damaged reputation amongst the industry and agents.

Summing Up
The future of digital newspapers will be all about journalism and content as we can get all the other stuff elsewhere. It has to be about what made it successful in the first place- quality journalism – quality investigations, matched with quality content.

Throw in online classifieds and a brilliant interface and you have a winner. I pay for content today (software design website) , but they only own me only as long as the provide quality unique content ($7 per month).

So sit back and enjoy your newspaper with your coffee because it is nearing its end. No? You might think this, but just imagine if print newspapers lost just 10% of its readers to digital, now think about the fact they are already bleeding $ on print as of todays readership. Now you see it :)

It may take 5 – 7 years but it is coming! Your thoughts?

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Domain.com.au (through Domain Property Data) recently announced a new initiative to up the ante to arch rival Realestate.com.au. Here is a snippet from the Domain.com.au press release.

Domain Property Data has always equipped you with the most reliable and accessible market knowledge. Now we are changing the industry by offering Domain.com.au agents free access to advertised sales and rental history, as well as agent reported sales results.

All an agent needs to do is accurately report their sales data through their feed to Domain.com.au and they will have access to this data. I think this is a great idea and hopefully that start of a new trend.

Having accurate sales data is important to both Domain.com.au and Realestate.com.au as it is valuable data, so measures to improve the quality of this data can only help Domain.

Follow the link below to read full press release from Domain.com.au Read the rest of this article »

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