For too long our industry has treated listing data as a free resource to be consumed without regard for the work behind it.
Listing data is not free. It’s the product of investing time in research, branding, marketing, technology, and the daily effort of thousands of agents and brokers who compete to win every one of their listings.
Yet the licensing frameworks governing that data haven’t evolved in the past 25 years. Internet Data Exchange (IDX) policy was built to allow brokers to display each other's listings on their websites. Syndication license agreements, starting with Realtor.com in 1995, were built to chase national listing exposure using the latest technology, the Internet. Our industry never went back to ask a fundamental question: what is the data worth?
Today, we’re asking that question. And we have an answer.
The Old Model Didn’t Consider Value
The problem with the old model is that it treated all use cases equally while the value of listing data varies widely based on the use. A national public portal generates more revenue than a public search on a local broker’s website. A referral business model pays the same for data as a back-office or productivity application. That’s not equity. In fact, it subsidized the most powerful data consumers by providing an extraordinary deal, while the brokers who produce the listing data have seen very little of the return.
Value That Follows Use
Realtracs recently launched a new use-case based license agreement that directly ties the cost of listing data to the value it creates for the data consumer. A national public portal derives greater value from listing content than a local broker website. A referral business built on listing data is a completely different use case than a back-office tool. And the licenses should reflect that.
Value following use is not a radical idea. This is how other content economies work: streaming rights, publishing licenses, music royalties. It's time to apply the same logic to listing data.
The New, Value Based Model
Our new data licensing model is designed to compensate the listing broker for their work product and listing assets. For the first time, brokerages have a direct financial stake in how their listings are used and how much value those listings generate downstream.
With this change in the incentive structure, brokerages are motivated to activate their full listing inventory. This means more and better data, which ultimately benefits sellers and potential buyers. This model also provides a favorable runway for new technology vendors to create new solutions. As their platforms grow, so does the value of the listing data powering them and the return on brokerage’s work product.
Playing Fair
This new model is built to be equitable and efficient. It creates a favorable runway for new technology entrants. Early-stage companies pay less, and their costs scale with their success. More established platforms that built their businesses on underpriced listing data will pay more. That’s not a penalty. That’s a correction.
We’ve already delivered the new license agreement to the most significant listing data content consumers.
Brokers built this data economy. We’re excited for the economy to start working for them.