Pivot? Or Reveal? Upstream Decides to Go Downstream

A few of you have already asked for my opinions on The Pivot, as it is now being called. At the NAR Midyear meetings that took place last week, Upstream’s CEO Alex Lange told the attendees at CMLS Brings It to the Table event that going forward, Upstream will take a data feed from the MLS instead of requiring that participating brokers enter listings into Upstream, which will then provide a feed to the MLS.

Greg Robertson, with whom I record the Industry Relations podcast, half-joked in response that maybe Upstream should change its name to Downstream or Midstream.

Inman News has coverage on the issue here, and also additional insight in this article where it reports that NAR has approved an additional $9 million in funding for its subsidiary RPR to continue pursuing Project Upstream.

Based on what I’ve heard, conversations I’ve had, and the public reporting by Inman, I can’t help but feel that this isn’t a pivot, but a reveal. It looks now that the entire Upstream project has always been about syndication, an issue that I had sincerely hoped had died an unnatural death years ago.

That makes me incredibly depressed about the state of the industry. I understand it, but seriously, we have got to move on. Not only has that horse left the barn, but the barn itself has burned down and the whole farm paved over and made into a strip mall with a Palais Royal as its anchor tenant.

The Pivot, or The Reveal

What exactly is The Pivot? Inman News published the rare… report? op/ed? opinionated reporting? from Brad Inman himself on this with the headline, “Real estate industry’s Upstream project pivots, shifts strategy:”

The original Upstream plan was to insert itself before the multiple listing service (MLS). But this tack has proven more difficult than envisioned.

After getting a cool response from many MLS organizations, the big broker group shifted its strategy and now brokers will enter their listings into their MLSs instead of Upstream first. And a dashboard will be built to manage distribution of listings if and when brokers choose to push their listings to Upstream from the MLS, according to sources at the lunch.

To be clear, my understanding is that Upstream isn’t abandoning listing entry. After all, they’re calling it a “two-way sync” between the MLS and Upstream. But the reality is that the broker would continue to enter listings into the MLS, and then direct the MLS to send his listings to Upstream. Since the broker has absolute control over his own listings, the MLS will comply and the listing data will make it into Upstream.

After that, Upstream will handle distribution of data, a.k.a., syndication.

Lest you think this is me just being overly paranoid or whatever, allow me to quote someone in a position of authority, Alex Lange, CEO of Upstream:

In a presentation to state association executives Friday, Upstream CEO Alex Lange said some MLSs were resistant to Upstream’s original configuration.

“People are afraid of change. There was also potentially economics changing hands,” he said, referring to MLSs that take in revenue from listing syndication feeds to third parties.

“When we put syndication back in the brokers’ hands that sort of dishevels the whole thing.”

“The distribution features were really what [brokers] want,” he added.

Upstream “will spend next two to three months doing the extra work of handling these feeds” and going across the country getting MLSs onboard, Lange said. [Emphasis mine]

Now, details are still unclear on just how this is going to happen. So let’s spend a few minutes exploring those questions now that Upstream has gone downstream of the MLS.

The Known Unknowns

There are some big and small questions going forward.

  • The reference database: I still don’t know how this works. If the MLS remains the entry point, and it remains the database… does Upstream still need a database? If so, the accuracy of that data will have to be checked against the MLS, right? Otherwise, we still have the reference database problem.
  • Distribution: I imagine there will be some sort of an Upstream API for developers and publishers, but… does that mean the MLS can no longer do syndication for the listings sent to Upstream? I have to assume so. Will that requires a policy change? What happens to existing MLS agreements in that scenario?
  • Licensing: Presumably, Upstream will have to execute some sort of a data license in order to receive the data from the MLS. What sorts of usage will Upstream want, and what will they get? Or is that obviated if the broker directs the MLS to send his own listings? If the latter, I can see a lot of companies from Zillow to Placester to Boomtown getting extremely happy….
  • Data Package: From my understanding of things, most syndication feeds are limited. Syndication feeds are not the entire MLS database entry, but a selected set of fields. Will Upstream seek and get special dispensation? If so, on what basis?
  • Sold and Off-Market Data: Closely related question is whether the data sent to Upstream include historical Sold data and off-market (pending, withdrawn, etc.) information as well. If the answer is Yes, then I have to ask, on what justification? A broker might control the listing but I’m not sure how that extends into the past when some other broker sold that listing to some other buyer. If a justification is found, does that justification then extend across the board?
  • The Extras: The current plan is that the MLS sends the listing data to Upstream, and then the participating broker can go enhance that listing inside Upstream — adding high-res photos, mo betta copy, and so on. Since the phrase is “two-way sync” does that then get sent back to the MLS?
  • Termination: If an MLS decides to enable Upstream, and then changes its mind five years later, what happens to the data sent to Upstream?

Those are details we’ll learn as we go forward, I suppose.

The Sadeness

Having said all that, I can’t help but be filled with sadness.

Not because of The Pivot — after all, I have maintained from the very start that the concept of Upstream is a wonderful one, provided that the MLS remain the reference database. Here’s a video recording of my positions on Upstream from the 2016 Zillow MLS Summit:

Single point of entry, data management tools, and control over listings by the brokers — all of these are wonderful goals. It now appears that Upstream has abandoned all of those, to try to control syndication of listings. As Alex said, that’s what the brokers really want.

Leave to the side the issue of why brokers still really want that, after all this time of living with a post-syndication, Internet-modified world of real estate. (I’ll address that in future posts.) But if distribution features were what brokers really wanted… why didn’t they just go buy Listhub?

After all, Upstream post-Pivot isn’t much more than Listhub 2.0: take data from the MLS, provide a dashboard, and then syndicate listings.

Listhub can’t possibly be all that valuable to News Corp, the new owner of Move, especially since the largest network of real estate sites refuse to take a feed from Listhub.

Instead of partnering with NAR, which brought a ton of political baggage to the whole discussion and freaked out the MLS community, why didn’t the brokers approach Move and offer a plata o plomo deal: sell us Listhub, or none of us are going to use Listhub for anything.

For that matter, I have heard that Move bid on the Upstream project, given that they had built Find and owned Listhub. Why didn’t the brokerages just go with them if syndication control was what they were really after?

Project Upstream was the biggest thing to happen to real estate since… well… since the start of IDX and the appearance of Zillow. The vision of a single point of entry, harmonized data management, and control over listing data — that was exciting and worth debating. Good people can disagree on the specific how to do such a thing, but the end goal was inspiring.

But if all of that was just to stuff the syndication genie back in the bottle… what the hell have we all been wasting all this time, energy and money on?

The industry has bigger things to think about, bigger problems to tackle, bigger issues on the horizon. The Number One threat in the DANGER Report was massive incompetence among the agent ranks, and we have done precisely zip to address that. We have companies like Opendoor and Reali on the rise. AI is coming sooner or later. The political situation is as awful as it has ever been.

And the main thing we have been focusing on for the past couple of years turns out to be Listhub 2.0?

Pardon me while I go commune with my mentor Dr. Jameson. This is almost too much to take.


PS: The Counter

I just saw this now on Facebook so figured it was an important clarification:

If TRA says the scope hasn’t shrunk, well… then maybe the scope hasn’t shrunk and the ultimate goal to be the reference database upstream of the MLS remains.

If that is true, and the MLS “cartel” (Dale Stinton’s words, not mine) thinks that Upstream aims to usurp the MLS’s place in the infrastructure of the industry… why would any of them cooperate with the MLS entry temporary phase of the ultimate dream of domination?

Shouldn’t they just wait to see how the ultimate end-goal product/system/platform looks like before deciding to participate or not? For that matter, the self-preservation instinct of the various MLSs might suggest that maybe, just maybe, they ought not to help prop up Upstream through its temporary MLS entry phase so that it can grow up to be the national MLS.

This is me doing a big shrug. Guess time will tell.

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Rob Hahn

Managing Partner of 7DS Associates, and the grand poobah of this here blog. Once called "a revolutionary in a really nice suit", people often wonder what I do for a living because I have the temerity to not talk about my clients and my work for clients. Suffice to say that I do strategy work for some of the largest organizations and companies in real estate, as well as some of the smallest startups and agent teams, but usually only on projects that interest me with big implications for reforming this wonderful, crazy, lovable yet frustrating real estate industry of ours.

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10 thoughts on “Pivot? Or Reveal? Upstream Decides to Go Downstream”

  1. I love reading TRA Facebook posts. It’s like if the Wizard of Oz quit his job to be a social media intern at a real estate organization. Ominous and brooding…but maybe super goofy and friendly behind that keyboard.

  2. I just don’t see the need to project doom and gloom on the entire industry based on Upstream’s failu– I mean, “pivot” alone. With “companies like Opendoor and Reali on the rise”, “AI coming sooner or later”, and a ton of money being invested into real estate technology right now, the current state of the industry seems anything but depressing to me.

    I can’t help but think that you’re looking for innovation in the wrong place by pinning your hopes on Upstream. Asking pre-existing industry incumbents and institutional players to reinvent their own industry seems too much to ask when all they’ve done is try to fight against the inevitable change that will render them obsolete. Why would it not be a good thing for the industry to be taken over by companies like Opendoor and DotLoop and Reali and Zillow? Why would it not be a good thing for these companies to completely change the way the game is played and the way real estate is bought or sold? In the grand scheme of things, would it truly be better for the industry if market-makers like Opendoor and Zillow died out, and “we” instead continued to build on the decades-old institution of brokerages and their agents? In fact, who’s “we”?

    I’m genuinely asking.

    • Good question actually.

      If I thought of real estate as just a business, in which assets are bought and sold, then I’d agree with you 100% — bring on the innovation and lower transaction costs. Hell, bring me AI systems that auto-match my home to the perfect seller, while matching me to my perfect home, and cut out all middlemen.

      Maybe I’m stuck in old book thinking, but I still think a home is not a house, and the role of a Realtor (at least, if not the licensed real estate agent) isn’t just to trade in assets. There is something deeper, more fundamental to buying or selling your HOME that gets lost.

      It’s sort of how I look at companies like Legalzoom; fine for routine tasks, but if you’re on trial for your life, you find the best attorney you can. Entering into a lifelong debt commitment strikes me as being on trial for your life.

      I have zero issues with any of the innovators you mention, zero. I DO have issues with how the industry is responding to them. Looks like Upstream now falls into that category….

  3. In addition to the Known Unknowns, we have the Unknown Unknowns including a revenue model.

    The sub-headline from the Inman article is: “Data management company expected to repay funds upon hitting profitability” which leads me to think that they have shared some kind of revenue plan with their benefactors.

    Are they just planning to charge Zillow, et al for the feeds? If so, won’t the MLS want a cut of that?

    If there is an additional “Upstream Tax” for essentially the same data, will Zillow, Placester and Boomtown still be happy?

  4. Interesting you bring up ListHub – and a comment!!!
    I’ve been having trouble getting my company data to Realogy. Seems LW system keeps breaking down, and mucking things up. Informed by BHGRE that Listhub has a new product called Connector – to take data from MLS and go straight to DASH (formerly Crest Edge). Not a simple click on the Dashboard, but ‘Mo Money, and some other nice features – for BETTER and FASTER updates with accuracy. ListHub may be evolving. Then my Franchise syndicates to the Big Players for me.

    COMMENT: Perhaps NAR should look to bring value to the table outside of Fremiums and Technology????

  5. What a total waste of time the RE establishment is over, all these lofty conversations cannot put it back together,an alternative would be to find free market solutions, they will evolve soon, in my opinion,.

  6. A recent article suggested that Zillow’s next step is to become a giant brokerage,to “uberize” the Re Biz,their existence is threatened by their success they have to continue raising the fees from Agents,to satisfy their investors ,in a shrinking residential market,this concept does not compute.

  7. Rob – Did Rupert Murdock buy Realtor.com for $950,000,000?
    Why has the RE media not reported on this? Who got the $950,000,000? How much did NAR get? Damned if our industry is as corrupt as the mainstream media, most huge corps, CEOs, and our federal government.
    Oh well, most agents will not care since 81% are either incompetent or dishonest. Read the D.A.N.G.E.R REPORT. It’s on the web. It will open your eyes.
    What we need is a new uncorrupted national board and a stand-alone MLS system.

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