There has been a great deal of talk and writing lately about MLS/broker listing syndication. This isn't surprising considering one of the leading synidcation providers, Threewide, was recently acquired by Move, Inc., operator of Realtor.com. At the same time, initiatives like those led by industry veterans Bud Fogel and Mike Meyers and by LPS's Ira Luntz (himself a veteran of syndication), suggest that a new model could be in the offiing. Among commentators who have taken up the issue are MRIS Chief Marketing Officer John Heithaus, in an often-discussed post; Victor Lund of the WAVGroup(you need to be in Inman subscriber to read that one); and Rob Hahn.

Elizabeth and I wrote a longish whitepaper on syndication back in 2008, which is still available on our firm web site. That paper, written just before Elizabeth and I formed our firm together, focused on the role of MLS and how MLSs should approach operational and legal issues; it assumed that MLSs would want to do syndication because at least some brokers wanted syndication. Most of the concerns we expressed then remained unaddressed in the industry. The current debate, it seems to me, is about whether brokers and MLSs should be doing syndication at all. It takes up the key assumption in our 2008 whitepaper.

I'd like to expend some effort and thought on this topic in the next few posts. This first one will define what I mean by "listing syndication," in order to distinguish it from other forms of listing data distribution and licensing; and it will discuss some reasons MLSs get involved in syndication. In the next post, we'll consider ways that MLSs get involved in syndication and some problems and issues. Then we'll take a look at the key underlying question: should brokers be sending listings to all these places in the first place, and what role should MLSs play in that decision?

“Syndication” defined

There is no official definition of “listing syndication.” There is no Platonic universal or form corresponding to listing syndication. So, we just need a practical definition that provides some scope to what we are talking about. For this summary, I will use the following definition: “listing syndication is the distribution in bulk of active real estate listings (listings currently available for sale), by or on behalf of the listing agent or listing broker, to sites that will advertise them on the web to consumers.”

We include each of the following things in this definition:

• Distribution of listings by MLS through a listing syndicator, such as ThreeWide (ListHub) or Point2, to advertising sites.
• Direct distribution of listings by MLS to advertising sites (including local newspaper web sites and national sites).
• Distribution by a listing broker via a data feed (whether broker-internal or created by MLS on the broker’s behalf) to advertising sites.
• Use by a broker or agent of a service that offers to take a bulk data feed and then distribute the listings to advertising sites.

I usually call web sites that advertise real estate listings “aggregators” (we used "commercial distributors" in the 2008 report). I usually refer to the recipients of data through syndication as “syndication channels.” As a result, a site like Zillow.com is both an aggregator and a syndication channel. I do not consider the following syndication (at least for purposes of this discussion), though they share some characteristics with it:

• Services where agents manually load their own listings in, like vFlyer and Postlets. These sites generally do not take bulk data feeds.
• Data licensing to RPR or CoreLogic under their current proposals. They are using off-market listings, in addition to active ones, and the applications they use them for are not advertising. Sending data to Move, Inc. for its Find application is not syndication because it includes off-markets; but see the discussion relating to that below.
• A “back-office data feed” from MLS to the listing brokerage. A back-office feed often includes all the MLS listing data (from all brokers) and comes with a license for the brokerage to use the data internally for the core purposes of MLS and the freedom to use its own listings any way it pleases. Many MLSs provide such feeds to their participants to facilitate brokerage business activities. Thus, though MLS’s action here is not syndication, the brokerage might turn around and engage in syndication itself.

Why only active listings? We do not include off-market listings (listing records relating to properties not currently for sale) in our definition of syndication for two reasons:

1. MLSs perceive the off-market listings as something different. Most MLSs recognize that very recent off-market activity in the MLS provides a very valuable resource, one not available elsewhere. Thus very few MLSs distribute off-market listings through typical syndication channels.
2. Brokers perceive the off-market listings as something different. Brokers want their active listings advertised (and their sellers want it, too). But brokers rarely perceive value in having their off-market listings distributed. We are not acquainted with any brokerage firm that distributes its off-market listing data.

The value MLSs bring to syndication

Almost from the beginning of “listings on the Internet,” people have asked what role the MLS should play in getting listings out there. The short answer is efficiency:

1. MLS already has all the listing content in one database. Every listing broker has already paid for that database to be created and maintained; and every such database has the capability to export listing data. In theory, at least, it should always be cheaper for MLS to ship brokers’ listings to a channel, because it requires fewer steps. In the alternative, MLS would supply each broker a data feed of its own listings, then each broker would have to set up a feed to each channel (or at least set up a feed to a syndicator who could reach the channels). That’s a lot more data feeds, IT staff hours, etc.
2. Many MLSs and traditional syndicators permit broker ease-of-use. Syndicators like Point 2 offer brokers a dashboard where they can click on the channels they want to receive their listings and click off the ones they don’t want to receive them. In theory, this does not require the broker to perform research and due diligence on each channel; the syndicator or MLS has theoretically done that before presenting the option on the dashboard. (In practice, this may not be happening.)
3. Syndication through MLS or a syndicator may give listing brokers more leverage. If a channel is getting the listings from many brokers in MLS through a data feed from MLS, the MLS may have leverage with the channel to get it to behave properly. If the MLS cuts off the data feed, the channel loses listings from all the brokers. Similarly, if a syndicator cuts off a feed to a channel, the channel loses the feed for all the MLSs working with the syndicator. A single broker, by comparison, usually does not have the volume of listings to exert leverage on the channels. Note that some channels (like Google, before it decided to stop accepting listings), did not necessarily react to that leverage anyway. Note also that just because MLSs and syndicators have this leverage, that does not mean they have actually used it (I'll discuss this in another post).

The resourceful broker problem

One important fact about syndication is what we call the “resourceful broker problem.” It’s not really a problem at all; it’s just competition. If an MLS does not syndicate listings on behalf of its brokers, some of the brokers will assume the costs and work associated with syndicating their own listings. This will give those brokers a competitive advantage in the market. Note that we don’t call this the “large broker problem.” Though the large brokers in markets are also often resourceful brokers, in many cases, smaller brokers also find the means to be resourceful. The MLS is confronted with its age-old problem, almost its nemesis: Choose between (a) delivering services at the lowest common denominator, drawing complaints from some brokers that MLS should be doing more to deliver efficiencies to all brokers; and (b) delivering efficient services to all brokers, drawing complaints from resourceful brokers that MLS is “leveling the playing field.”

Neither of these arguments is wholly right or wrong. But they appear in some form whenever MLSs consider offering services like syndication. The intensity of feeling about which path the MLS should take varies a great deal from MLS to MLS and often within the board room of a single MLS.

So, we've stipulated a definition for "syndication"; should we be including other things, or perhaps excluding something I've included here? And we've discussed why MLSs often believe they should be involved. I'm curious what your thoughts are about my efficiency arguments there. Next time, we'll consider some ways that MLSs do, and don't, syndicate. Following that, I'd like to spend a little time considering where brokers should be sending their listings and whether the MLS should be deciding for them.

"2010 was a year of tremendous activity at Move, as we took significant steps toward realigning our business to continue and grow our long standing market leadership," said

Steve Berkowitz

, chief executive officer at Move, Inc. "Move's mission is to connect real estate professionals and consumers to facilitate more real estate transactions.  The increased use of the internet and mobile devices in the real estate industry has changed the ways consumers and real estate professionals interact.  Move is committed to delivering products and services that meet the market's needs.  As we head into 2011, we are focused on serving the complete home-buying cycle with an expanding list of distribution partners and real estate solutions."

4th Quarter 2010 Highlights:

• Market leadership: Move maintained its leading market position, leading the industry in unique users and total engagement.  In 2010, on a monthly basis, the Move Network attracted an average of 11 million unique users(1) who spent on average more than 224 million minutes monthly on our network(1).  Visitors to the Move Network viewed nearly 4.4 billion total pages in 2010, more than the next six competitors combined.  
• MortgageMatch.com:  Launched in December, MortgageMatch.com was developed to give first time buyers or refinancing owners the tools they need to find and prequalify for the right loan in as little as 10 minutes. In its first month in operation, MortgageMatch.com's state-of-the-art decision engine helped more than 30,000 prospective homebuyers know in just a few minutes how much they can afford to borrow and what their monthly payments would be based on real rates and loan choices for which they qualify.
• AOL: Move announced an agreement whereby Move will power the AOL Real Estate search experience.  The agreement delivers a powerful ad network for agents and advertisers to expand their reach and visibility to AOL.com's millions of monthly visitors. The AOL Real Estate experience powered by Move will deliver a user experience customized for AOL with instant access to accurate property listings, neighborhood and school content, and connections to real estate experts. Leveraging Move's ListHub network, Move will syndicate millions of listings to AOL Real Estate and power the home buyer's search experience.
• Mobile Highlights: Move launched the Realtor.com Real Estate Search Android and Windows Phone 7 application in November, building on the success of Move's Realtor.com iPhone app launched in January.  In 2010, the Realtor.com mobile apps have been downloaded over 3 million times with hundreds of thousands of consumers connecting directly with real estate professionals.

Citysearch wants to help shift Groupon deals from the inbox to the smartphone.

The IAC company has signed on Groupon, The DealMap and several other local deal aggregators to populate its new mobile app, Deals by Citysearch. The thinking behind the Deals app is that consumers will be more inclined to pounce on local deals when they are out and about looking for things to do than when they are checking their e-mail—which is how most sign up for Groupon deals.

Thus, users who download Deals by Citysearch---which is available on iPhone and Android—can see a list of available deals from Groupon and other partners based on where they are at a given moment. They can also view potential deals plotted on a virtual map.

Other features allow users to share deals with friends, save them for later or print coupons wirelessly.

“Consumers are tired of having their inbox flooded with daily deals,” said Citysearch senior director JP Bedoya. “We have curated the best local deals and allow users to search based on their individual needs when they are on the go.”

 

 

 

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