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Real Estate News and Advice |
December 3, 2008 |
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 MLS And Broker Consultants Recommend Data Licensing
by Blanche Evans
As MLSs mull over the loss of non-dues revenues for listing data from portals such as Realtor.com and MSN House and Home Channel, and cope with pressure by third-parties to release their data, two consulting companies are coming up with new ways and means to license the data. Brian Larson, an industry consultant is now working as the Real Estate Business Information Group's (REBIG,) MLS relationship manager. REBIG, a group of about four MLSs, has formed a data licensing cooperative and has signed nine other MLSs to licensing agreements. Gregg Larson is a principal in Clareity Consulting, a consulting firm to MLSs, has just released its "MLS Data Licensing: The Business Opportunity and Data Security Issues White Paper." His company will consult with MLSs on how to go about licensing, which puts his company in a competition of sorts with REBIG. Although, both men hail from Minnesota and have the last name of Larson, there is no familial relationship, but both Larsons are pushing the idea of data licensing to MLSs, but in slightly different ways. Brian Larson wants MLSs to join the REBIG network, and to let "product producers" receive the licensed data for limited packaging to appropriate customers. Gregg Larson (Clareity) wants to consult with MLSs about appropriate licensing procedures and protections, as well as helping them find potential customers, which takes the licensing of the data a step further. Both men insist that licensing MLS data will be for limited uses, such as service retention products. "Let's say you are an ISP in Dallas, and you want to know which of your current customers are selling homes," explains Brian, "you might buy a mailing list of current customer who are selling their homes, to match them to your mailing list for ISPs. If they are moving, they are going to hook up a new ISP, and someone else might be moving to their house, so for an ISP it is valuable kind of list." A similar list could be sold to banks or any service provider who would like to know if their customer base is changing. "They only get a match list - not the MLS data," he says. "The only people who have access to data are REBIG product producers - there is no consumer tie-in, no IDX. It is strictly business to business, and no direct mail except where a relationship exists. The businesses who license data from REBIG are producing products for other businesses; it is those other businesses who will have some kind of direct consumer contact." How it works with REBIG is that the data is licensed to a "product producer," who then packages limited segments of the data for customers as varied as ISPs, banks, attorneys, transaction managers, mortgage lenders, title companies, automated valuation models (AVMs,) broker and agent productivity solution providers, Website providers, Supra information products, parallel MLS systems, real estate research firms, appraisers, asset managers, credit bureaus, insurance companies, automobile dealers, and national listing aggregators. Who are the product producers? They would most likely be national information companies such as Realtor.com, or those which offer AVMs such as First American, Freddie Mac, FNIS, Stewart Title Landata, Basis 100 (Solimar), eAppraiselT, Fiserv, First Lenders Data, Integrated Loan Services and LandSafe, Axicom, InfoUSA, Transunion, and Equifax, to name a few. Editor's note: None of these companies except First American has gone public as a customer of REBIG's data licensing, The other potential customers were listed by the author according to potential customers mentioned in Gregg Larson's white paper. "You have to imagine that between the MLS and any product exposed to consumers," cautions Brian, "there is REBIG, the product producer, and the business that is consuming the product producer's product. Because those product lines are so varied, it doesn't make sense for REBIG to be the product producer, but to only manage that first series of steps to get the data to the product producers." According to Gregg Larson's white paper, licensing MLS data is a business with "great, untapped potential." Suggested Information product packages could include:
There are scores of issues that have to be tackled before an MLS undertakes a licensing venture, among them the costs and methods of protecting the data from watermarking to policing product producers to revenue-sharing with brokers, and working with REBIG. Gregg suggests asking questions regarding a potential data licensing partner such as is the company financially stable? do they offer enough protections for the data? will they provide access to national licensors the MLS would be unlikely to sell itself? Areas of concern include consumer privacy issues and broker opt-outs which could limit the completeness and therefore the marketability of the data. Clareity spokespersons wish to clarify: The concept of segmenting the data and only providing what is needed by a licensee was a key point in the white paper and is not a point of distinction between our recommendations and REBIG's approach. One of the goals of the white paper was to promote the concept that MLSs should have both a national strategy, cooperating with a partner like REBIG, and a local/regional strategy. Published: May 13, 2003 Use of this article without permission is a violation of federal copyright laws. 
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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment.
