What Is the Best Business Model for Selling a Matterport Service?

February 15th, 2017

James in Georgia says:

I am getting pressure from a few of my real estate clients to invest in Matterport. As you all know the camera is very expensive and there is also a monthly hosting fee, adjusted based on the number of projects that are hosted. I am also talking to some of my new home builder clients to see if this is something that would interest them as well. The investment would only make sense if I have enough clients using this service on a monthly basis in order to 1- pay for the investment, and 2- cover the monthly hosting fee.

With this as the background, I am looking for information from others with experience on how they charge for the use of this technology. I was thinking of a starting price of about $225, and going up based on the size of the house or number of rooms. In addition, I am considering ways to cover the hosting fees. For realtors I’ve considered a rate that would be based on the number of homes concurrently being hosted or possibly a subscription. I also considered including the first month of hosting with the initial photography, and then charging a monthly fee as long as the home is actively listed and hosted. It could be something like $10/month/per house; $15/month for 2 houses, $20/month for 3 houses, $30/month for four or more houses. If I have enough clients on-line, this may be a solution that works.

For builders, I was considering something similar, but since they have models that they may want to host on a longer term basis, a subscription or flat monthly fee may be more suitable.

I am very curious to find out what other Matterport users are doing, and if they have been successful with it. I don’t want my best clients going to another photographer because they offer Matterport and I don’t.

I think you are wise to be doing the arithmetic up front and designing a business model that ensures Matterport works as an investment. I think many others don’t do that. You have to be sure that more than just a couple of customers are going to want it.

What advice do current Matterport users have for James?

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14 Responses to “What Is the Best Business Model for Selling a Matterport Service?”

  • I got my Matterport in Nov. 2015 once one of my top clients agreed to be on-board. Here’s a link to my pricing which has worked out well for me in my area (Southwest VA).
    http://www.seanshannonphotography.com/pricing/

    I debated about charging monthly hosting fees as well but when I approached my clients they were not keen on the idea at all. So I just made sure to charge enough in my pricing and consider the per Space charge and hosting fees a part of doing business. It’s much simpler this way and my clients don’t feel like I’m nickel and diming them. I started out with the Basic plan but just recently upgraded to professional since I’m doing enough per month to justify the increased fee to get the savings on additional free monthly spaces.

    I highly recommend offering a combo deal for photos + Matterport which is my most popular item. I also offer floor plans as an add-on to Matterport for $100.

  • I agree with Sean. Charging hosting fees for Matterport tours sounds like an accounting nightmare. It should be priced in to the service. I also agree that combo deals for Matterport + Photos make it much more attractive to the client. We also charge based upon the square footage of the home.

    I think offering Matterport makes most sense in areas with a lot of high-tech home buyers or where there are buyers from (or with family) overseas. We do between 4-6 tours a week and most of that business comes from agents who are trying to impress their techie clients with a cutting-edge technology. Very few of our clients order tours with the sense that the tour is actually going to help sell the home. Thus, if you market the Matterport service as a listing tool to give brokers a competitive advantage against their competition, I think it can be effective.

    If beautiful photos aren’t enough to get prospective home-buyers through the door then there’s no way a 3D tour is going to.

  • I have been offering Matterport for over a year, but been reluctant to invest the money on tech that is still emerging. So I decided to sub-contract. I think it was the right decision as I have little interest in the field. Last year, the gross revenue from that was just $3,000, which is only about 50% of the cost of Matterport , so it confirmed that would not have been the right decision to shell out $5k+ without proven track record. For me, the demand would have to at least triple to consider doing it in-house.

  • Our company is in the virtual tour business and we also sell Matterport as an upgrade in markets where our photographers have the cameras. It’s very popular in a few markets and not so in most others.

    As mentioned above, charging agents for hosting is not going to go over very well so it should be included in your prices… Now charging for a renewal say after 1 year to keep their tour alive might be a better way to go about it. Most companies offering it are charging a base fee for up to xxxx square feet and a fee for xxxx square foot increments above the base… So as an example, $299 for the first 2000 square feet and $75 for each additional 1000 square feet.

    Having said all this, I don’t believe you should be thinking as Matteport as displacing your current photography services since agents still need high quality stills for their listings, so think of it as an upgrade. You can take Snap Shots out of the Matterport scans but they are lower resolution images and if your are using any sort of HDR processing, the Matterport snaps shots can’t compare…

    Lastly, in this instantaneous society of ours, I don’t think an agent would use just Matterport to market their homes. People want to screens homes quickly by viewing the stills and then if interested they will take the time to view the Matterport tour.

  • No one wants to have to keep track of how many months a listing is active. No one wants to have to pay a few dollars every month. Don’t charge to host the listings. Build it into the prices. Charge once, get paid once. Make life simple for everyone.

    A popular model seems to be to charge per square foot. The bigger the home, the more scans you’ll have to do and the more time it will take. 10 to 12 cents per square foot seems to be a competitive range. Perhaps having a minimum charge is a good idea, that way you’ll be covered for your drive time and setup time.

  • About 6 months ago, Redfin started TV ads showing how they use Matterport on each listing. After that, I got a few calls from my current clients asking about walkthrough video offerings. I took a look at purchasing the equipment and also spoke to local Matterport providers willing to be sub-contractors. As @Pierre mentioned about, it appears sub-contracting made the most sense to me. So, I aligned myself with a local MP vendor and am all set to do it. But, after the Redfin ads slowed down, I haven’t had a request for it. So, I have not been involved with any.

    I know my story is not directly related to your question about pricing but I thought it might be useful.

    Best of luck with any decision you make!

  • Purchased the camera about 9 months ago and since then I have seen prices for this service plummet. Started around $250-$300 in my market. Now it’s all over the place for $150 and it’s easy to understand why. You can hire someone with no experience and have them up and running in a day (this is what I did). No artistic, creative eye is necessary. A high volume provider can get the cost down to about $75 per shoot (with hosting). The popularity of this product is exploding! Matterport is selling a lot of cameras and the Real Estate big dogs (Zillow, Realtor.com, Homes.com, Big box brokers) are all investing in supporting the technology. My prediction is that this service will become relatively standard and the cost will be cut to the bone.

    I would only invest if you had the ability to be very competitive in your market and do serious volume. Or if you’re a control freak like me and just have to do it yourself 🙂

  • I think your pricing is fair, but I wouldn’t charge the hosting fees. It’s not only an accounting nightmare, it’s complicates the pricing structure for your clients. Keep it simple and roll the hosting fees into your price. So $10/month per home… add $120 to your base price to cover your fees for a year. Explain to your clients that you will only host it for a year. If they want to re-up… then charge for another year or six months… whatever.

    My two cents on Matterport:

    I had a few clients inquire about Matterport so I did some research for them. In order to break even in a 12 month period I’d have to shoot at least one tour a month for around $400 per tour. So I ran that past my entire client base (about 90 agents) through a Survey Monkey survey. Many thought it was a cool technology, most would not use it and the ones who “might” use it, would only use it on the rare exceptional home. All respondents thought $400 was way to high. They felt that $150 was a fair number for this service. This would put me at about 30-35 homes in the first year just to break even. Then you have to consider the longevity of the hardware and software… how long will this unit be current? how long will they support it? Matterport is a start-up business… are they solvent and how long will they be viable? All of the end product is auto-generated and stored on their servers… the user has no backup and no way to do any editing to the tour. You can’t correct color or exposure or remove that “thing” that the client doesn’t want anyone to see.

    I think its a great new technology… but there is too much uncertainty to warrant a $5000 investment… especially when the return on investment is uncertain. I could do lots of marketing and set up a second shooter for less.

  • James,

    You can charge more for Matterport if you can show agents how you can help them sell more and bigger listings more often. In nearly all markets, Matterport Pros offer 3D Tours based on SQ FT. Many do this by tiers such as up to 2,000 SQ FT.

    To succeed, Pros need to bundle visual storytelling services. For example, when you create a Matterport Spaces 3D Tour, 3rd party solution providers create 2D floor plans, videos and single property websites that can be bundled with pro shot still images and video (and drone) for a visual storytelling solution.

    There are about 20 3D/VR/360º camera platforms/solutions in the residential real estate space – five that matter. Matterport, with $61 million in funding, is the 800 pound gorilla in the space. As a Pro photographer, you would likely enjoy/have more success with a DSLR based 3D solution. Here is a free 38-page Guide to Comparing 3D-VR Platforms for Scanning-Shooting Homes:
    http://bit.ly/WGANGUIDE

    While the Matterport Camera lists for $4,500 – and as of February 2017 – can be bought with a coupon at 20 percent off, the real cost of the investment is about $8,000 to $10,000, depending on wether you already have an iPad Air 2, special head, etc.

    The good news is that this expense keeps out the competition. The bad news is that this price is steep for many of us. I bought a Matterport Camera and related gear in July 2014 because I wanted to be among the fist Pros to offer this solution. At that time, we were the first and only Pro that only offered Matterport in Atlanta (and all of Georgia).

    Earlier this year, Matterport announced that it has sold 5,000 Cameras. For a company that has received $61 million in funding, that number felt low – about three times as low as I would have expected. The good news is that this means that there is still an opportunity to be among the first. That said, competition can be good. We now get calls from agents that are competing with Agents that bought a Matterport Camera and seek a Pro to offer this service (because they don’t want to become an expert).

    Anyway, back to pricing. I do like your monthly recurring revenue model – we do this with hotels, commercial leasing and event spaces for example – but it does not work with residential listings. We use two essential; tools to make collecting monthly recurring revenue super-easy: Stripe and MoonClerk.

    It’s worth noting that Larry’s Photography for Real Estate blog has been written about Matterport for years. In the early years, it was about “it will never take off” to today, “clients want me to buy a Matterport camera” and offer this service.

    In your case, you have clients that are asking you for Matterport. If you don’t jump in with both feet, they will find another Pro that will. And, that Pro will get your still photo business from them too. Sometimes you just have to close your eyes, take a deep breath and jump into the deep end.

    Please do let us know what you decide to do.

    Best,

    Dan

  • As Dan noted, there is a significant investment beyond the initial cost and the ability to recoupe that has been one of the two issues holding me back. The other is the evolution of cheaper technology making that investment worthless. When people have enquired about Matterport, I have quoted prices similar to what Shawn noted, which is fair, but the interest suddenly stops. That has kept me from investing in Matterport as I do not see the quantity of interest for the return.

    One Realtor, after a discussion on Matterport and hearing the price, then asked me about the Ricoh Theta available at Best Buy for $289 and also gave me a link to look at. Noted that a broker at another firm was using it creatively with FSBO’s making a video tour of the home and hosting it – inactivating after 2 weeks. If they wanted it to continue, needed to list with him. Of course it was unique, not offered by others and people liked it. Here is the link she provided.
    http://1340stellardrive.thebestlisting.com/ As I researched it with both that link and others, The output is not something that I would want to professionally put my name after…but for the Realtor as a spur of the moment DIY, it falls into the “good enough” category, and without the critical photographic insight of the general public, reaches into the acceptable range. (Likewise, I still can’t believe the demo on the Matterport site shows the shadow on the wall of the big box camera on tripod). Ricoh’s Theta360 site has hosting available as well as instructions on how the avoid their hosting and upload directly to YouTube.

    Bottom line… More and more cameras are coming available in the $300-$500 range that do similar and improve with each generation. So just why would I want to spend thousands on Matterport to have it as a expensive doorstop in a couple of years?

  • Hi James
    You ask some great questions. We have done some research, at Matterport, re what people are charging, which we can share with you and we can also put you in touch with some successful service providers, if you are interested, to hear how they go about pricing. Please get in touch with KHanson@matterport.com and she can help you with both of these.

    Also, please keep in mind that some people who are responding, like Dan, for instance, are monetarily incentivized by other camera providers (ie, he gets a cut from them, but we didn’t choose to “buy in” when he offered) and for this reason, you will often find him posting negative things about Matterport and pushing other offerings. Likewise, of course, I work at Matterport so that is how I get paid ;). It it would be helpful to get some impartial/unbiased input, feel free to read what the market is saying about Matterport: https://www.facebook.com/pg/Matterport/reviews/

    Thank you for your interest in Matterport and let us know if we can help.

    Linda (Marketing, Matterport)

  • My most frequent client went to KW Family Reunion and knew they were on sale, so I was under pressure to get one. I did. He already told me that he told another high-volume agent from his office (who I know well, but uses another still photographer) that I was getting one, and that this agent didn’t want to buy one himself, but was interested in it. I will probably be getting business from him. My client has 6-7 luxury listings at the moment and wants them all shot with the Matterport as soon as I get it up and running. The other agent also has some luxury listings.

    As of now I’ll be the only one in my city with the thing as far as I can tell. I’m going to start marketing it fairly heavily, but of course I’ll still be relying on my bread-and-butter still photos for the bulk of my income, because I have few illusions that the Matterport will be bringing me more than 10% of my business, if that.

  • Linda K Itskovitz, let’s go ahead and mention that Dan is also one of Matterport”s biggest cheerleaders and the forum he built has helped build your business that you sell for. If it were not for his forum (we get around) I would never have found your company the same as hundreds of other providers. Is it a standard business practice of Matterport to undercut one of their providers? Seems so as you also market to agents after their contact information comes in on a matterport scan…. Cheers and good luck.

  • I believe Linda’s attack on Dan is fairly unfounded. If anyone looks at his forum, you will see that he is a champion of the system, however, he like many other long-term Matterport providers, feel betrayed by Matterport’s actions.

    I purchased a Matterport system late last summer and financed it through a local bank with a 2-year note. The payments are reasonable, and I do make money off of the system (above the subscription, loan payment, and tour charges.) I bought this as an add-on to my standard photographic services because I have quite a few clients who were asking about it. If you already have a good client base, this can be a great add-on. But really evaluate your market and be sure you’re not in one that is over saturated.

    The biggest issue (in my opinion) is the amount of time using the system takes. While I can be in and out of a 2,500 sqft house taking standard photos in 45 minutes or less, a Matterport scan takes around 45 minutes for every 1000 sqft.

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