Last week’s spat between Rightmove and OpenRent gave a brutal insight into how the UK’s most-visited portal is set to deal with all of its customers in the future – including you.
By Rightmove’s own admission, OpenRent accounts for about 8% of the lettings’ properties advertised on the portal – and that this represents what RM calls 700 ‘branch equivalents’ – making OpenRent one of its most important advertisers.
As exclusively reported in The Negotiator on 31st July, the first signs of all not being well between these two companies was the disappearance of the Rightmove logo from OpenRent’s product offering page. This observation set in train the dramatic events of last week, where Rightmove made two separate announcements to the Stock Exchange – the first, on 6th August, noting that OpenRent was to come off the site, the second, two days later, stating that an agreement had actually been reached for them to remain.
What do we know? That Rightmove’s initial statement was blood-curdlingly hostile, advising anyone who cared that, from 01 September, “OpenRent’s landlord customers will lose access to the UK’s largest property-seeking audience.” It turned out that a lot of people cared – the landlords of OpenRent’s ~14,000 properties cared, as did Rightmove’s shareholders. Amongst days of general volatility in the FTSE, RM’s share price tanked and didn’t recover as fast as the rest of the market.
Was this because of the OpenRent situation? Rightmove’s Board must have been worried.
But also worried must have been the Board at OpenRent. It’s well-known that OpenRent’s core proposition is cheap access for private landlords to Rightmove. Without that promise, OpenRent’s pitch to landlords suddenly looks really poor value.
Also, their charges are for three months of advertising – so, if they were just removing the ‘Rightmove access’ promise at the end of July, there will definitely have been some clients who paid OpenRent to get RM access throughout September, who now wouldn’t receive it. OpenRent’s landlord-facing account management team must have been under relentless siege – and that’s before the sales team reported on what will have been a significant drop in landlords wanting to join.
We also know that Rightmove’s second statement, advising that agreement had been reached, was far less hostile – but certainly not ‘welcoming OpenRent back’. It was a classic passive/aggressive declaration, cursorily noting that agreement had been reached before banging on about how nothing had changed in its expectations from its half-year analysis a few weeks earlier, an analysis sent before all of this blew up.
So, who blinked first? Anyone speaking with agents regularly knows that Rightmove’s re-energised aggression under newish CEO Johan Svanstrom takes few prisoners. His uncompromising approach to hiking subscriptions, to hit his self-imposed £2,000 per month per branch target by 2028, is hurting even previously supportive agents. He would not want to appear weak to his team, his shareholders or his customers – very much also including 700 ‘branch equivalent’ OpenRent.
On the other hand, at the end of July, OpenRent seemed to have accepted their fate and decided to come off Rightmove, albeit rather quietly. The noise that would have been unleashed by Rightmove’s brutal first statement, the critical damage to their customer proposition and thereby existence, could easily have forced them to pay whatever it took to return to RM.
The clue to this outcome will be to watch OpenRent’s charging and product policies over the next six months. It’s less than a year since OpenRent hiked their charges by up to 70%, from £29/£49 to £49/£69 – in all probability as a result of last year’s Rightmove ‘negotiation’. If these charges move again before Feb 2025 – or if they remove another portal, for example Zoopla – I can’t see any other reason for it than a significant uplift in their RM costs.
Regardless of what really happened between Rightmove and OpenRent on 04 and 05 August 2024, it is terrible news for everyone else.
Either OpenRent capitulated – in which case Svanstrom has just mentally added another +5% to whatever he was already planning to increase everyone’s charges by in 2025. If OpenRent have swallowed it, he will believe, you’ll have no choice but to as well.
Or Rightmove had to eat a bit of humble pie and decrease what they wanted to charge OpenRent, to get them back. Short term – and bearing in mind both of RM’s statements last week insisted that there would be no change to its revenue guidance – everyone else is going to have to pay for OpenRent’s shortfall, to make good RM's investor promises. And long term – RM will be better prepared for next year’s OpenRent price ‘negotiation’, and I suspect it’s going to hurt OpenRent a lot, lot more.
But in the end, who lost? Everyone that operates in the same sphere as Rightmove, that's who.
RM are relentless – and they’re coming for so much more of your profit. This OpenRent spat showcases the modus operandi of the biggest, greediest business in the UK residential property market. Aggressive, brutish and ready to publicly shame anyone that dares to transgress.
What to do about it? Three things:
1. Stop talking about Rightmove to your clients. If they ask, sure, confirm whether you’re on there – but do NOT position it as a benefit. Talk about everything else that you do – but slowly start to educate customers that RM is not the be-all-and-end-all; in fact, it’s a little bit dated. This will give you some space – and also you’ll find that other things that you do resonate just as well, if not more so, because they’re different.
2. Get behind another portal. CoStar/OnTheMarket is the obvious, as they’re open about wanting to break Rightmove too. Jitty is another – slowly opening-up across the UK, it is committed to never charging agents for listing and uses AI and some other cool features to build a decent audience. I have no affiliation with them, for the record, I just think they’re trying to do the right thing. Lovely people too.
3. Use new tech. Yes, here at ModelProp we do this but that’s the point – we’re deliberately creating other ways to promote property using cutting-edge AI, because we want you to have tools that aren’t constrained by Rightmove’s negligent approach to innovation. They’ve deliberately stifled others’ ability to create compelling ways to market property because they want you to pay more for the same with them. AI can break this – and it’s also really cost-effective (ie. cheap), which they also hate.
Take your pick of these three but do SOMETHING. Otherwise it’s not going to be OpenRent staring at an existential decision soon, to choose to stay on Rightmove or cut something meaningful elsewhere – it’s going to be you.
Comentarios