Three interesting pieces of information have come to light in the last couple of weeks concerning rightmove.co.uk.
Well on the surface, these seem like startling facts and figures and we should all be scurrying off to sell our Rightmove shares. However, a little more thought about the situation of agents and the strength of rightmove.co.uk probably reduces the severity of the situation.
Firstly, for an agent the most important thing in tough times is leads and when you look at the traffic to rightmove.co.uk, you know that they continue to dominate the UK market with more visitors than any other site (Click here for related article) - therefore an agent is likely to pay something and get significantly more leads than paying nothing and receiving much less leads.
Secondly, i often hear the argument about the price of advertising on rightmove.co.uk. Well the reality is that online advertising of property accounted for only GBP 75m out of a total of GBP 700m spent on property advertising. Given that online generated the majority of the leads, why would an agent sacrifice a strong lead generation tool to continue to pay for less effective media. The reality is that other media will suffer before the online space.
Thirdly, given rightmove.co.uk's position as market leader, it is likely that agents who use more than one portal will give up the other portals that they have to pay for before they give up rightmove.co.uk. They may in parallel try the free portals however they are unlikely to replace rightmove.co.uk as the main generator of leads for the agency.
Fourthly, rightmove.co.uk will be affected by an increase in the number of agents leaving the market however they should be able to partially off set any loss through new agencies entering the market and signing up, some pricing power (they have pushed through a hefty price increase this year), and the increase in revenues from the letting market and the new homes markets.
Finally, given the cost base that rightmove.co.uk has at the moment, margins should be able to be maintained, even when there is a decrease in the growth in revenues, by a greater focus on cost reduction.
Overall, while there is some hype around the potential impact of the market on Rightmove, the bottom line is that it is unlikely to be as significant as projected by some pundits. The real impact may be on findaproperty.co.uk, propertyfinder.com and primelocation.com.