If you’re the type to read this, you undoubtedly know that Zillow is acquiring ShowingTime and that folks have strong feelings about it. There are accusations of paranoia, opinions on who to blame, depictions of the acquisition as a fight, and, unsurprisingly, Zillow and ShowingTime reassurances. As usual, Brian Boero had some insightful thoughts.
I have some thoughts, as well, particularly about the implications for MLSs.
First, some disclaimers: I approach all of this from the perspective that multiple listing services (MLSs) serve a critical pro-competitive and marketplace-liquidity-enhancing role. My thoughts are evolving, and they’re changing each day.
My take won’t be as entertaining as others. Of course, all of this could vary from MLS to MLS, and each MLS must make its own business decisions. (Also, this is not legal advice — consult your attorney.)
Here are a few reasons this acquisition could be concerning from an MLS standpoint:
This situation is different
There seems to be a tone that this transaction was reasonably foreseeable and not much different than Zillow buying dotloop, Retsly or Bridge. I don’t know if that’s accurate. The change that makes this different is that Zillow is an MLS participant. This is generally uncharted territory for MLSs.
Relationships are blurred
As Inman’s Jim Dalrymple wrote last week, “Over time, [ShowingTime] has struck up partnerships with MLSs and integrated with their platforms. Today, ShowingTime boasts relationships with more than 370 MLSs (more than half) and claims to provide technology for more than 950,000 industry professionals.”
The questions and strategic concerns of an MLS doing business with one of its participants are valid. And it’s not just that the MLS is doing business with one of its customers; it’s that the vendor-customer (or subsidiary, parent, or affiliate of the customer) is now providing core services to its competitors, the other MLS customers.
This circular transaction that might create conflicts of interest raises strategic questions about whether the MLS should enter into agreements with participants to provide core MLS tools to other participants.
Access to data is limited
This acquisition also raises questions about participants having equal access to data derived from the MLS ecosystem. If all participants and subscribers had access to the granular and user-generated (UGC) data within ShowingTime, this conversation might be different. But that’s not the case.
I’m not referring to the reports ShowingTime generates. Those are clearly for MLS subscribers. I’m questioning whether UGC, the metadata, and the ability to parse and manipulate the same should be available to other participants. This also raises questions about who owns the foregoing data sets, how they may be used, etc.
Strategic evaluation needs to happen
All that said, this is not a time to be reactionary; it’s a time for evaluating the transaction in light of MLSs’ current strategic aims and how it could impact the MLSs’ longer-term strategic goals.
MLS leaders need to think about the above and, more broadly, about how MLSs foster competition through their piece of the systems and networks that serve homesellers and buyers.
Tactical considerations will need to be made
It probably does not serve the MLSs’ interests or some of its customers’ operations any good to cancel agreements viscerally. It is, however, important to know what the MLS’s agreement says about term and termination, permitted uses of various types of data, and where those agreements might be realigned to fit the MLSs’ strategic goals better.
With each change and challenge comes opportunity. In the short term, it’s a time where ShowingTime can hear MLSs’ concerns and re-earn MLS business. ShowingTime could choose to update agreements and provide the flexibility that MLSs will seek to ensure a competitive landscape.
In the longer term, perhaps this will spark a conversation about MLSs opening up and sharing new types of data sets that have previously been internal to MLS software vendors. Perhaps some MLS software vendors will also notice that opportunity.
Mitchell A. Skinner is an attorney and managing member at Larson Skinner based in Minneapolis, Minnesota.
