Over at the Future of Real Estate Marketing blog, Joel Burslem celebrates Halstead’s incorporation of New York magazine’s neighborhood profiles on their website. But then he goes on to make what I think is an outrageous claim:
It also signals to me that more brokers are waking to the reality that they themselves are media publishers and therefore need to start acting like them. Inking content deals for their sites is part of that, but so is exploring trends like syndication and distribution for their own content (i.e. listings).
Say what now?
I don’t know Joel, but I’m sure he’s a brilliant guy. And like many brilliant guys, he appears to have forgotten some simple truths.
The business model matters.
What I mean, quite simply, is that how a company actually makes money means something. Calling real estate brokers a “media publisher” doesn’t make them one anymore than calling a pile of poop “caviar” does.
The media business is pretty straightforward in how it makes money. It either (a) sells the content via subscriptions or some other pay-by-consumer model, or (b)
cons convinces some company to pay to advertise to the consumers of content. As long as money coming in is greater than the money spent on creating and distributing the content, you’re in the media business, baby! Trulia and Zillow are in the media business (until they’re not, of course, but we’re assured, assured, that will never happen by Trulians and Zillowites).
In stark contrast, the real estate brokerage business makes money upon the closing of a transaction in which a piece of real property goes through a change in legal status. Typically, that’s a transfer of title. But it could also be the execution of a lease, creating a leasehold estate. The brokerage makes money by commissions tied to the final sale/lease price. What the heck does that have to do with the media business?
The content is given away for absolutely nothing, because that ‘content’ is nothing more than advertising, promotion, and marketing for the underlying asset. This is tantamount to claiming that J. Crew is actually a media company because it puts out a catalog.
If real estate companies were to actually act like media companies, they would be inking deals wherein publishers would pay them for their content (aka, listings), or they would get some other company to pay them money to put advertising on their content (aka, listings).
Alas and alack, the legal status of listings is very much up in the air, I’m afraid. After all, who owns the listing? Is it the agent? The seller? The MLS? The brokerage company? The mega national franchise networks such as Century 21?
If the national Century 21 organization (a division of Realogy) inked a deal with Google to send it listings for $1/listing, would the lawyers for the various MLS’es and agents and brokers break the sound barrier in getting to the courthouse to file a suit? Or just fall short of Mach 1?
Look, I dig what Halstead has done from a technical standpoint. As a web guy, I like the user interface, the clean but functional design, and the map integration. But let’s not get carried away here.
From a strategic standpoint, what Halstead has done is properly described as “brand suicide”. Halstead has essentially told every single visitor to the Halstead website, “Our agents know jackshit about the neighborhoods in which they are supposedly experts.” If you want to know where to move to in New York City, don’t ask the boys and girls at Halstead — no, go read New York magazine. That, my friends, is brand suicide.
If real estate is local, then presumably the value of real estate agents is local knowledge. Farm that out to some publication, and you’ve essentially made your real estate agent a glorified paperwork clerk. But, oh yeah, pay me 6% please! That makes for a very compelling value proposition.
Why are we celebrating this again?
What Halstead should have done instead is to make sure that every single agent on its roster is in fact a local neighborhood expert. If you sell million dollar condos in SoHo, sister, you’d better know where to go for the best sushi dinner, which dry cleaner will wreck my $4,500 Brioni suit and which one won’t, and where I can take my dogs for grooming. You’d best know which elementary school my kids will be attending if I buy this condo vs. that condo. Then, Halstead should have done everything in its power to brand those agents as local experts, and kicked New York magazine to the curb.
But I guess it’s easier to take the lazy way out and ink a deal with New York. That way, you could be described as a “media publisher” too, while you flush your brand down the toilet.