Erosion risks

• Alternative data sources and automated extraction reduce data collection advantage
• Product innovation by well-funded competitors
• Real estate downturn reduces customer willingness to pay

Leading indicators

• Net new bookings trend (subscription)
• Renewal rate / churn
• Average revenue per subscriber

Counterarguments

• Some inputs are public or obtainable from third parties (public records, MLS/feeds)
• Large customers can multi-home across multiple data providers

Erosion risks

• Brokers shift listing/transaction submissions to competing platforms
• Data quality issues reduce willingness to contribute
• Contract or policy changes limit ability to ingest third-party feeds

Leading indicators

• Change in listing volume and update frequency
• Customer-reported data quality metrics / support tickets
• Traffic and engagement of marketplace surfaces that feed data back

Counterarguments

• Multi-homing behavior means contributions can flow to multiple platforms
• If traffic is search-driven, algorithm changes can reduce inbound contributions

Erosion risks

• Regulatory/antitrust constraints on contracting and platform access
• Lower-cost or freemium competitors win on price
• Customers shift workflows to open-data or internal tooling

Leading indicators

• Renewal rate (contracts >=12 months)
• Seat expansion / contraction at major brokerage clients
• Price increases vs churn response

Counterarguments

• If contracts are non-exclusive, customers can add competing tools without switching
• Large brokerages can build internal data layers on top of multiple feeds

Erosion risks

• Brand damage from data errors or litigation
• Competitors win mindshare with newer UX/workflows
• Platform disintermediation by brokers/MLS ecosystems

Leading indicators

• Unaided brand awareness in core professional segments
• Share of voice / web traffic for CoStar-branded products
• Competitive win/loss in sales cycles

Counterarguments

• Residential incumbents (and some CRE entrants) may have stronger consumer-facing brands
• Perception can shift if lead quality declines or pricing rises too fast

Erosion risks

• Underlying facts may not be copyrightable (only selection/arrangement)
• Litigation cost and adverse rulings
• Competitors source similar photos/data from other channels

Leading indicators

• IP litigation outcomes and settlements
• Incidence of unauthorized copying detected by anti-piracy tooling
• Changes in copyright / database protection laws

Counterarguments

• Legal protection may not extend to raw factual data
• Aggressive enforcement can trigger antitrust or reputational backlash

Erosion risks

• Competition from ERP/finance suites and best-of-breed lease accounting vendors
• Standardization reduces differentiation
• Customer consolidation reduces seat count

Leading indicators

• Renewal rate and churn for lease management products
• Net new bookings / ARR growth
• Average contract value trend

Counterarguments

• Multiple credible software vendors exist; switching can occur at renewal
• Integrations and APIs can reduce data migration friction over time

Erosion risks

• Search algorithm changes reduce traffic (SEO/SEM dependency)
• Multi-homing by property managers across multiple listing portals
• Competitive bidding and higher CAC in rentals advertising

Leading indicators

• Average monthly unique visitors (Apartments.com Network)
• Number of advertising communities
• Renewal rate and churn in multifamily subscriptions

Counterarguments

• Property managers can buy leads from multiple portals, limiting exclusivity
• Traffic advantages can be rented via paid search by well-funded competitors

Erosion risks

• Lead quality deteriorates vs competitors
• Brand dilution from aggressive ad load or low-quality listings

Leading indicators

• Brand awareness survey results
• NPS / customer satisfaction vs competitors
• Share of leads delivered to advertisers

Counterarguments

• If ROI falls, advertisers will shift spend regardless of brand
• Zillow/Realtor.com can bundle rentals with for-sale traffic to advertisers

Erosion risks

• Specialist vendors win screening/payments via integrations
• Operators prefer all-in-one property management software suites

Leading indicators

• Adoption rate of applications/payments features
• Take rate / payment processing volume
• Attach rate of workflow tools to ad packages

Counterarguments

• If the tools are available via third-party integrations, bundling advantage shrinks

Erosion risks

• Competitors (e.g., CRE listing startups) gain supply via aggressive pricing or broker tools
• SEO/SEM changes reduce marketplace traffic
• Commercial transaction downturn reduces advertiser budgets

Leading indicators

• Average monthly unique visitors (LoopNet Network)
• Number of paid listings and ARPA per listing
• Renewal rate and churn for advertiser subscriptions

Counterarguments

• Advertisers can multi-home listings across competing platforms
• Brokers can drive traffic directly via social/media and owned channels

Erosion risks

• If data licensing becomes easier/cheaper, enrichment advantage narrows
• Content rights disputes limit reuse of photos/marketing assets

Leading indicators

• User engagement metrics (time on site, lead submissions)
• Search ranking / organic traffic share for key CRE terms
• Cost to acquire/supplement listing content

Counterarguments

• Competitors can source similar content via brokers/owners or public data and still compete on UX

Erosion risks

• Incumbent portals (Zillow, Realtor.com) maintain consumer default behavior
• High marketing spend required to sustain traffic growth
• MLS / data access rule changes affect listing completeness

Leading indicators

• Average monthly unique visitors to Homes.com Network
• Net new bookings and churn for Homes.com memberships
• Marketing spend efficiency (CAC payback)

Counterarguments

• Network effects can be winner-take-most; being #2 may still be structurally disadvantaged
• Traffic numbers can be inflated by cross-network definitions and visitor overlap

Erosion risks

• Transaction volume declines in downturns (auctions, land, business-for-sale)
• Category-specific competitors can outspend on SEO/SEM
• Supply fragmentation: sellers list across many sites

Leading indicators

• Auction property volume and take rate (Ten-X)
• Organic traffic share for key category keywords
• Paid listing volume across Land.com and BizBuySell

Counterarguments

• Sellers can list on multiple sites with low incremental cost
• Marketplaces can be disintermediated by social media or broker networks

Erosion risks

• Non-exclusive data licenses allow rivals to use similar inputs
• Rising content acquisition costs (photos/video/3D tours)

Leading indicators

• Content production cost per listing (photos/video/3D tours)
• Cross-sell/cross-traffic rates between marketplaces

Counterarguments

• Shared inputs can be copied if the same third-party data is available to peers