How Valuable Is MLS Content?

Jan 27, 2010  |  Michael Wurzer

The value of MLS content is one of the big questions facing MLSs today.  The Realtors Property Resource (RPR) from NAR is seeking to license content from MLSs in exchange for software (the RPR web site) and access to public records data.  Is that a good deal for MLSs?  The answer depends on how much the MLS content is worth.

Similarly, CALREDD (an offering from the California Association of REALTORS) offers Associations MLS software in exchange for ownership of the listing data.  Yes, that’s right, joining CALREDD means the local Association no longer owns the MLS compilation.  The CALREDD offer is particularly interesting because it conflicts dramatically with the typical MLS vendor/Association relationship.  Typically, contracts for MLS software are crystal clear that ownership of the MLS data (compilation) remains with the Association or MLS.  In CALREDD’s case, the MLS software vendor (CALREDD) also is an MLS and, as such, claims ownership of the data.

The importance of this change in ownership depends on the value of the data.  If the data is valuable, then the true cost to the local Association of the software provided by CALREDD is far greater than the fees CALREDD charges for the software they provide.  The NAR’s RPR business model — premised on selling analytics from MLS content — suggests that there is indeed some value in the data.  Importantly, early word on the license agreement with RPR is that the license is non-exclusive to RPR.  In other words, the MLS or local Association also can license it to others who may find value in it.   In stark contrast, striking up a deal with CALREDD means that whatever value is in the MLS content is now owned by CALREDD — in exchange for MLS software.

What do you think?  If you were an MLS or local Association considering using CALREDD as a vendor, would you add to the price tag anything for the value of the MLS content you’re surrendering to CALREDD?  How valuable is the MLS compilation?

Update: Brian Larson reviews the terms on which NAR’s RPR proposes to license MLS content.  Maybe MLS content isn’t worth very much after all?

9 Responses to “How Valuable Is MLS Content?”

  1. Insider says:

    I think we’re confusing definitions.

    I define an MLS Software Vendor as a company that creates and owns the MLS software, the computers it runs on and the data center that houses the computer. It then sells or licenses its software to an MLS.

    An MLS is an entity that directly provides MLS services to the end user real estate practitioner, and as such provides the business rules and enforcement, establishes the offer of compensation, and an overall governance structure.

    Based upon those definitions, how is it that calREDD is an MLS Software vendor as your are suggesting? I thought that they contracted for the MLS software from another vendor, who owns the software, computers and data center that the system runs on.

    calREDD is an MLS service provider just like any of the 800+ across the country, but with a mission to become a state-wide MLS and shut down all the other MLSs in the California. And like most MLSs, copyrights and claims ownership of the compilation.

    I would say, however, that these MLS and their members that are deciding to disband and have their members join calREDD should not GIVE AWAY their valuable listing data, but should seek some significant return of that value. Same goes for providing listing data to RPR!

  2. Interesting questions Mike. I can’t wait to hear from people on this one.

  3. Danny Loftin says:

    Mike…It seems to me that perhaps the SOLD data would be most valuable thing to consider, but control should never leave the possession of the MLS. It is bad enough that some of the MLS’s are not owned by the boards. If we had all smart people running all of the boards, I would worry a lot less (as a Broker) about the compiled data. Also from the broker standpoint, I hate the fact that I must take what is MINE, enter it into a system where it becomes subject to costing me monthly fees, fines, and usually a costly yearly membership in an Association that doesn’t do squat for me, just to watch as the infighting rages as to how and who can make the most money off of our data. Hold on to your socks for the time to come when the Brokers rise up and decide to keep what is theirs. The time may be even closer than you think. Could be that someone who looks an awful lot like me has been working on just such a broker scenario for quite some time…. You just never know, do you?….

  4. mwurzer says:

    Insider, you make some good points about the traditional definitions, and CALREDD’s General Counsel, June Barlow, would agree with you when she says, “think of calREDD™ as a vendor with standard rules and access statewide similar to other models that have elements of this same structure.”

    However you define the entities, CALREDD is, in fact, selling/licensing/vending MLS software and my point is that the terms of that transaction between CALREDD and the local Association are significantly different than traditional MLS software licenses that do not require transfer of ownership of the MLS data. Perhaps the best definition is that CALREDD is an MLS software middleman, which also requires that the local Association turn over ownership of the MLS data as part of the transaction.

  5. mwurzer says:

    Danny, I look forward to seeing or hearing about your new endeavors.

  6. Danny Loftin says:

    Agreed about CalRedd…In fact, the thing that makes me the most angry when veiwing the entire Nationwide MLS mess is the fact that so many of the MLS’s have become just that, a middleman. Their purpose is to remove our (the Brokers) money a little at a time. Don’t get me wrong, I know the amount is pretty much insignificant when looked at on a single user basis,(for any Agent actually doing something), but when viewed on a National basis, it is a travesty. The amount of money we spend collectively should afford us an MLS system with ALL the bells and whistles, at a fraction of what we now pay collectively. I think it will happen eventually. (If I had my way, it would happen tomorrow !) Nevertheless, as long as we continue to feed the mouths of MLS Execs, this is how it works. Big question is how to make it change in a way that Brokers can get behind it with the assurance it will actually happen. I am afraid that if we continue down the path we are on, the ultimate end game will be to have what is OUR data owned by some bureaucratic entity that will continue to stifle technological advances that benefit US, and continue to cost us far more than it should. (Us being the agents and Brokers) Its simple really, we just want the best system to exchange our listings, for the least amount of money. (Free would be nice) It would almost seem to me that the value of the Nationwide compiled MLS data, if available from a single source only, may very well be worth enough to pay for just such a system. What do you think?… Wow, that data ownership thing is quite the conundrum, HUH??

  7. mwurzer says:

    Danny, I think what you’re describing is what NAR’s RPR is aiming to accomplish. In contrast, I believe brokers should insist upon and work toward data standards that would foster provide brokers more choice in software instead of less.

  8. Danny Loftin says:

    Yes…And that scares the crap out of me. That kind of power or control over our data may mean that we may never again be able the wrestle it away. Question is, is that a good thing or a bad thing for the Agents and Brokers. There is no question as to what it would mean to you and your kind. (Vendors) Personally, I will not be led silently to the slaughter. Unfortunately, all of our focus data shows that most Brokers don’t care a lot about the compiled data due to ignorance or complacency. They just go with what they know. Ignorance is bliss. But when they are informed that they are paying the MLS sometimes as a straight middleman, that wakes them up to what might be a better way. I think I have that better way. If it works out, it would still be good news for vendors, as they would still play the lead role. We need to talk…

  9. Just a small thought, perhaps we could have five logos at the top of the screen in the space between the flexmls logo and our user name that we could ‘sell’ to sponsors such as banks, title companies, surveyors or others that are trying to get in front our members. The revenue from selling this ‘logo’ space could subsidize, or depending on what our association would charge for these ‘ads’, would fully recover our flexmls subscription fees. Each of the logos would, of course, including a link to the respective website of the advertiser. Any thoughts?