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  • Mal McCallion

Rightmove on a roll

Regular viewers will remember that, back in P/AIR 017, I was particularly exercised by Rightmove’s openly-expressed plan to empty agents’ wallets further – to the tune of £2k per branch per month – by 2028.


Last week, RM CEO Johan Svanstrom continued to deliver on this threat, increasing agent fees +9% to £1,431 – then dumping 78% of this additional cash directly into shareholder pockets. In total, of the (record!) £258,000,000 profit that Johan’s gang ‘earned’ in 2023, £201,700,000 was “returned to shareholders through share buybacks and dividends during 2023” [Rightmove Full Year Report, 2023].


None of it was invested in anything that’s going to improve the industry – or help his customers.


The margin remains at 71p profit for every £ generated.


Occasionally – OK, three times in the twenty-four years I’ve been in the industry – I’ll come across someone that makes an argument for the ‘value’ that Rightmove brings. “Back in the 90’s,” they aver, “agents used to pay £2,000 per month to the papers – and Rightmove delivers much more than they ever did!”


But that’s not the way that societal advancement works. If you’re part of a new wave of tech that slashes the price of a good or service, then this is supposed to free the customer to spend this extra on other things that also enhance their businesses. This is, for example, what AI is already delivering.


For Rightmove, however, they’re not investing, or saving customers money – they’re only interested in grinding out evermore ARPA (Average Revenue Per Advertiser) from their entrapped victims then showering investors with it all. If their profit margin is 71%, that assumes 29% is all it takes to actually run the business. So, to get to breakeven, they’d only be charging £415 per branch per month


£415. Instead of £1,431.


On any metric this is a brutal enterprise. It increases its prices by an average of 14% a year, regardless of inflation*. It does this not because it has things to spend the money on – no, it actually just throws the spare at its shareholders because it has no clue/interest in developing anything at all. In fact – excluding dividends, here, as these are generally a return on risk – since it started its share buyback campaign in 2008, Rightmove has sent over £1.3 BILLION out of the industry, just by buying its own shares.


£1.3Bn of agent-generated cash – about £150k per agency – just vapourised in 15 years. Not used for anything constructive. Gone.


Rightmove increases its ARPA because it believes it can – not because it has any need to, or because it has any interest in deploying it anywhere useful in the industry.


And that spells trouble for every single business that is also orbiting around the property market, agencies and suppliers. Rightmove’s insatiable thirst for agents’ cash – again, because it believes it can, not because it needs to – has sucked the life out of many, many other enterprises that could survive to build things that +do+ improve the lot of homemovers, agents and other suppliers. (And possibly compete with Rightmove too).


One number that might indicate a slight chink in the Rightmove Kevlar is -1% - the percent of agent branches that it has lost in the last year. Perhaps these have gone out of business – crushed by the perceived need to stay advertising with this insatiable monster.


Or perhaps there’s a change happening – because you could do a lot more, as a 1-branch agency, with the equivalent of £17k per year.


So here’s the thing – there has to be a limit to how high Rightmove charges can go before it starts killing its golden geese. Is it going to be in 2028, when charges breach £2k per branch per month? 2030, when they go past £2,500? This year, when they go past £1,500?


When’s your limit? Because every single year you’re going to be tested. Is now the time to start seriously thinking about what a post-Rightmove world really looks like? The more you work on the strategy – what to say to your team, clients, partners when the time comes – the easier the thought experiment becomes.


No business that doesn’t deliver customer value survives in the end. Those local newspapers and magazines that used to be able to charge £2k per month in 1998 – and seemed utterly immovable – are now dead or dying.


Make no mistake – Johan Svanstrom is coming for more of your profit. A lot more. If the only thing that he can think to do with it is to buyback his own shares – so that it disappears, unused by you or even him – does he deserve it?



* Rightmove Financial Reports, 2008-2023

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