Why Are MLS’s Monopolies?
So here I am cruising the Interwebs, checking out various posts from around the RE.net, and I run across this jewel of a post from Marc Davison and Brian Boero, then gents behind 1000watt. The post itself is interesting reading, and I’m not sure if I agree 100% or not, but there’s much food for thought there.
Don’t mistake my candor for pure bittnerness- this is about transparency and telling it like it is- from the perspective of someone who pays over $12,000/year to my local MLS (as an agent) to use the data for my website. Think about that- I pay $300/year in dues to the MLS, give them my listing data and then have to pay $12,000/year just to display the MLS data on my website. And I have to jump through all of their stupid restrictions and rules. I can’t show agent remarks on my website even though agents can show them to their own clients. I cannot show sold data, even though agents can show this to clients in a CMA. These are restrictions that the MLS doesn’t have to impose on itself, and does not impose on their “partner” Realtor.com. But there is nothing that I, or anyone can do about it because they are a monopoly. (Emphasis mine)
And I got to wondering… why the heck is this MLS a monopoly? I mean, as Greg himself points out earlier in his comment, MLS’s are for-profit ventures seeking to make money from membership dues and whatever ancillary revenue streams. They aren’t governmental entities. They are not granted — as far as I know — charters by any level of government to operate a monopoly.
The technology involved in a MLS these days is trivial. A reasonably competent database programmer could probably set it up over a weekend.
Why aren’t we seeing tons of MLS’s popping up all over the place to compete for Greg’s (and other disgruntled current consumers’) business?
Is it a network effect issue, where once all the realtors in a given area are on a particular MLS, the game is over? (Like eBay?) Is it a finance issue, where the profits from operating a MLS are so low that entrepreneurs aren’t tempted to offer a better service experience at lower cost?
Greg is a pretty serious tech guy if he created Blueroof.com — why isn’t he just creating a competing, for-profit, MLS premised upon “Better service, at lower price” and stealing the crap-MLS’s lunch? No politics — Greg owns the damn thing; he’s responsible, and he’ll reap the profits when they come.
This is a serious question. I just can’t understand why these MLS’s, who are apparently so poor at serving their customers (brokers and agents) and are charging far too much to provide crappy service, aren’t going bankrupt due to nimbler, more customer-friendly competitors.
Anyone know? What am I missing?