As a follow up to Dave Platters excellent, well articulated post on why anyone “is dreaming” that they can beat real estate.com.au, it made me revisit an idea I had a few years back. I think for the most part Dave is correct, however there is something that needs to be done about property content origination.

To me it has always been about control, if you go back to the early days on business2.com.au I wrote passionately about how agents will pay a price for putting all of their eggs in one basket and relying on one company for their web, marketing and portal needs, and it has pretty much played out in that manner. REA are top dog in many regions of Australia and can rightfully state their number one position. Agencies online property marketing budgets today are pretty much controlled by realestate.com.au and domain.com.au, annual fee increases continue at a clip and the limitations of each agents plans are pretty silly to say the least!

Realestate.com.au is all powerful because they have the listings and consumers will of course go to where the listings are. Consumers also know how to play with realestate.com.au and for the most part it is their favourite tool for browsing for real estate, domain certainly have the numbers on mobile devices but the browser is still king and this will not change in the short to mid term.

REA can pretty much do what they like with pricing, they are the market leader in an industry that is one of the most popular search pastimes in Australia, if you are an agent and you do not list on REA you will pretty much lose listings to other agents that are and REA had a brilliant strategy for agents early on, almost blackmailing agents into going for bigger packages. I lay much of the blame for this with real estate institutes who accepted ‘donations’ from REA in the early days to endorse their portal and put them in front of an eager audience – you!

The REA XML has also become somewhat of a de-facto standard for listings and pretty much all portals accept an REA XML feed to list with them.

If agents and competing portals want to to take that control away and place it back to agents they must do all of these things listed below pretty much in their entirety. Will they do this? Almost definitely not, but it is worth revisiting.

Open Source Listings System

Domain.com.au and all other portals, franchise groups, private agencies and private listing portals (yes they MUST be included) should band together and finance an open source system for managing property data. This must be fully inclusive, and that means REA can also use this system.

It must be built on open source infrastructure, be W3C compliant and define every single element useful to todays real estate agent. The system must have no stakeholders and be open to anyone. The system must be simple to sign up, simple to use and built on an open framework that can have multiple contributors. This would be controlled by a board of developers that have a wall of separation between them and any interested parties.

Agency
Agencies simply register with the system and are given a few tabs to work with (My Agency, My Portals, My Developers, My Apps). They manage all of their staff and can import their current listings into the system and the system takes care of the rest. They select what portals they want to be involved with, can give access to their web developers and can login and manage this information from their desktop, tablet or phone device.

Portals
Portals simply join the system and offer their portals with their standard terms and conditions clearly set out in the system. This will allow any agency to simply check a tick box to allow their data to be shared by that portal. If the portal is free then it simply starts the data transfer and updates instantaneously once changes are made to the data. If it is paid for then a simple code would need to be added to the system.

Developers
Web Developers are given tools to develop websites using this data and be given everything needed to do this effectively, including plugins, sample codes. Agencies can assign web developers to manage their web development by simply ticking a box next to that developer and that developer will have interface access to all they need to develop websites and applications for that agency.

Apps
Any product or service can offer their applications to agencies, be it, mobile phone apps, tablet apps, CRM software services etc. These apps can be free, paid or subscription based. Think of it like the Apple App store.

Cost + Revenue

Yes, to build this and maintain this service would be expensive, but nowhere near what agencies currently pay for the same services. The Real Open Source Community (ROSC) would be funded by annual verification. Initially it would need to be funded by portals and franchise groups with no strings attached (tall order) for two years from launch, but once launched each agency, portal, web developer, app would be encouraged to become verified, this verification would be a community trust system.

The annual report and all expenditure would be open and annual verification fees determined by the previous years revenues. This would ensure that the system was always in the black. The system would also have a constitution drawn up that can only be amended if 75% of all verified users voted up for that amendment – in other words each verified member has an equal vote.

ROSC Constitution

Part of the constitution would be that the data is owned by the listing agent and the text, photos, videos etc would be the copyright of the original author. Any breaches to this constitution would have impacts for any of the members. The terms and conditions that each portal, web developer and app developer disclose would be standardized, so agencies know the pricing, annual increases, sold data information etc from the beginning and as it is standardized there is nowhere to hide little clauses

Private Listing Portals

These would be treated just like anyone else. Yes, I hear you say this is a bad thing, complete nonsense! Over the next decade more and more people will list privately, it will take decades for this to become a powerful movement, and by this time agencies would have adapted their business models to suit It is important because they are an important part of the potential market for all agencies.

Original Sin

The reason for this system would not be too knock off any of the leaders, it would simply be to open the originator of the content and give control back to the agency, the people who create the content. REA and Domain would have access to the system just like anyone else and it is highly likely they would still be the dominant players in the market for the foreseeable future.

So, do you think that portals would get involved, do you think franchise groups would get behind this, even though not one of them will own one snippet of the system?

I’m talking to you.

Yes, you.

The person who thinks you will start an Australian real estate portal that will shoot right past domain, dethrone realestate.com.au and become the new number one.

Or, maybe you’re an agent who for some reason (perhaps because you have to send them a check every month?) doesn’t like realestate.com.au and wishes the industry would start a portal as a realestate.com.au killer.

I have a message for you: you’re dreaming.

I tell you this because of a very interesting discussion that developed in the comments of Ryan’s excellent post on FarmBuy.com.au. I thought I’d pull out the topic and expand on it.

Face it. realestate.com.au is the dominant market leader in online real estate listings in Australia. It would be very hard to beat them at their own game. What’s more, you cannot expect to copy realestate.com.au and win without their help, in the form of massive, ongoing self-destructive behaviour. They are not likely to give you that help.

All those hopeful entrepreneurs trying to create a new website to knock realestate.com.au out of its top spot and take it for themselves are on a fool’s quest. That goes for everyone from domain.com.au and on down. Domain can aspire to a profitable second place. Smaller, later comers can aspire to make a living, maybe, but certainly not to kill the giant.

The plain truth is realestate.com.au is the leader and will be the leader in online real estate listings in Australia as long as there are online real estate listings in Australia. There have been instances in business history when a player with a dominance similar to realestate.com.au’s was displaced by a competitor, but not many.

I say this as someone who has worked at realestate.com.au and with other real estate related web businesses on three continents, and as an entrepreneur.But, if you think I am missing something here, please enlighten me in the comments.

How to Make Money

Tell them they're dreaming!

Instead of leadership, go for a niche and establish a strong brand as the first and best in that niche. Here are some niches that are already in play, with varying degrees of success:

• Farms: FarmBuy
• Rentals: Rent.com.au
• Regional: AllHomes
• Premium property: Million Plus
• Free listings: The Home Page
• Chinese buyers: Juwai.com (a client of mine)

If you can be content with a niche, you could possibly be profitable, or at least one day sell out at a profit. It will be hard, because the Australian market is so small, but it seems possible. A niche could also be an add-on to another real estate-related business, giving that other business strategic advantages — like domain.com.au does for Fairfax’s newspapers.

Still Dreaming?

If a niche is not enough for you, and you want to beat realestate.com.au, there is only one credible strategy. You must dominate a new niche. This new niche by definition cannot be dominated by realestate.com.au and must be able to grow big enough to one day eclipse realestate.com.au. The flaw in this strategy is that you have to be riding a wave of history for it to work for you. Those waves don’t come along often.

For an example, look at realestate.com.au’s own history. The major media businesses had print real estate classifieds locked up prior to the realestate.com.au’s rise. They were unassailable. Classifieds were so reliable and profitable that analysts called them “rivers of gold”.

Then, three friends in Melbourne registered the domain name realestate.com.au and began persuading skeptical real estate agents to put their listings online. They chose a real estate classifieds niche the big players had overlooked: online. And they made themselves the leader in that niche.

(It is true that News International has a stake in realestate.com.au today, but that only goes back to 1992, when Simon Baker in his wisdom convinced News to buy it. realestate.com.au was a pure, independent startup in the classic mold. I reckon if you did the numbers, you would find realestate.com.au has been a much more profitable investment for News Corp than myspace.)

Over time, little realestate.com.au grew and grew by riding the growth of the internet. realestate.com.au won online and rode the internet’s historic growth into the very backbone of our economy and culture. The big media companies still dominate print classifieds, but print is sliding into irrelevance.

As of today, realestate.com.au has reported record revenue for six consecutive half-years, while the newspapers are struggling.

The lesson to draw from this history is simple. real estate portals should not take on the established leader head-on. Find a new niche and become the leader in that niche. You can make a living, and you may even get lucky enough to ride a historic trend into great riches.

The directory is powered by another Fairfax owned company, OMG a digital advertising company. OMG have over 30,000 Australia domain names and active websites, with 60 + of them being key industry categories. A  few examples include:

• Realestateagent.com.au
• Painters.com.au
• Lawyers.com.au

With specific industry based domain names all running a directory powered from a central database, makes OMG quite successful at connecting customers with their client’s businesses.

Businesses can pay as little as $19.95 pm for a basic subscription on 1 site through to $97 pm for a premium subscription on 20 industry sites. Each business receives their own page which displays the usual business details including description, images, operational hours, testimonials and reviews.

From Domain’s perspective the Directory adds another aspect to their portal and an additional feature for property seekers. It’s also a good experience using the directory, as the layout is quite functional and the predictive search is very intuitive.

Fairfax often state they can deliver better results for their clients and this integration of their two brands is example of how they can drive enquiries to their businesses.

I’m hoping Domain can incorporate this directory into their real estate agent search which will provide users with a much more useful and enjoyable experience when searching and comparing agents.

Greg Hywood, CEO and Managing Director of Fairfax said:

The decision to pursue the IPO of Trade Me is a further step in reshaping the Fairfax portfolio and adopting a more flexible corporate structure to maximise shareholder value. Importantly, Fairfax will continue to benefit from the strong growth profile of Trade Me through a shareholding of at least 65%.

Former Fairfax chief David Kirk, who made the decision to buy the auction site in 2006 for some $700 million, will be brought back in as non-executive chairman of Trade Me.

There’s no doubt Trade Me is an excellent company as it has over 2.7 million registered traders and is said to contribute to around 17% of Fairfax’s online earnings. However, many spectators believe Fairfax paid too much for Trade Me so a successful IPO will clarify whether their investment was a success.

I don’t see this IPO having a direct affect on the Australian real estate industry but it should be positive for the New Zealand market as now buyers, sellers and agents can become owners in the portal they all use and enjoy.

From their press release:

The acquisition of realholidays.com.au, which features 21,000 listings(1) not only broadens HomeAway’s reach into the Australian market, but also marks its expansion from North America, South America and Europe into Asia-Pacific.

“Australia is a tremendous travel marketplace, and HomeAway is excited to continue the work begun by REA Group to provide even greater choice to Australian travelers,” says CEO Brian Sharples. “We look forward to working with the realholidays.com.au customers to help them benefit from our technology and the marketing of their properties to a new, global market of vacation rental travelers.”

“REA is proud of realholidays.com.au’s success in the Australian holiday rentals market,” says Greg Ellis, CEO and Managing Director of REA Group. “However, we recognized the opportunity to further develop the business and, given our focus on residential and commercial property sites, felt it would be best managed by a specialist. With an expertise in holiday lettings around the world, HomeAway is ideally placed to provide even greater value to realholidays.com.au’s customers.”

This is an interesting move by REA as until now their consolidation has only involved the sale of overseas interests and excluded any Australian based portals. It also comes just after the announcement that their major Australian competitor Fairfax purchased two Australian based holiday portals.

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.

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.

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.

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?

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

FREE ‘JUST LISTED’ AND ‘JUST SOLD’ AGENT DATA
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.

Our new agent reported data platform is launching on the 2nd March.

Agents that report their sales results to Domain Property Data will be able to keep up to date with properties that have ‘just listed’ or ‘just sold’ right across the state, for no extra charge. What’s more, your sold properties will enjoy increased exposure across various sections of Domain.com.au and several of the Fairfax Media newspapers and websites.

Domain.com.au also distributes sold content, including weekly auction and private treaty sales results, to a wide range of media channels, and auction results are syndicated for publication in leading metropolitan, community and regional newspapers and internet portals. To ensure that your sales success is published across these channels, report your property sales to Domain Property Data.

When searching on Domain Property Data, you will have the ability to do the following:

• View a property’s sales data (price, sale type, etc) and key attributes (bedrooms, bathrooms, etc)
• Search a property’s advertised sales and rental history
• View historical agent reported sales data for the property.

In addition you and your team can receive a weekly email from Domain.com.au, keeping you up to date with agent reported sales in your key markets.

Agents that do not subscribe to Domain.com.au and/or do not report their sales results will not be able to access agent advised data on Domain Property Data. Please note, Domain Property Data is not available in Western Australia.

To access agent reported ‘just sold’ and ‘just listed’ data on Domain Property Data or to find out more about Domain.com.au simply contact your Account Manager or call us on 1300 799 109.
Report your sales success easily

You can now report your sales results easily (even when the sales price is marked ‘Confidential’) via your bulk uploader or Domain.com.au Agent Admin.

As well as gaining free access to Domain Property Data, agents who regularly report their sales success will also benefit from increased exposure for their agency.

Agents that choose not to subscribe to Domain.com.au and do not report sold data will not be able to access Domain Property Data.

Kind Regards
The Domain.com.au Team