DailyBeast Says .XXX Has Made “Hundreds Of Millions Of Dollars” But The Math Just Doesn’t Work

The DailyBeast.com just published a story entitled: “How .XXX, Porn’s Domain Name, Made Hundreds of Millions”

“”CM has sold just short of 230,000 “.xxx” URLs, according to official data from ICANN. That’s five times more than the company expected when it first filed with ICANN. Indeed, in his original business plan, Lawley’s best case scenario was reaching 250,000 names after five years. The company has amassed more than 70 worldwide resellers, middlemen like GoDaddy, who have pumped up sales volume.

At minimum, each of those 230,000 “.xxx” domains bring in $62 a year at the wholesale rate—about 10 times the average fee for a “.com.” But ICM also sells “premium” names for huge pricetags. Gay.xxx? Sold for half a million dollars. Fetish.xxx and Shemales.xxx went for $300,000 and $200,000 apiece. The lion’s share of the rest go for above $50,000. The company has sold more than 200 premium names so far, and just listed another 1,000. If you’re interested, you can be the proud owner of www.girls.xxx for $222,000.

For Lawley, the speculation will pay off. Do the math, and the company is on track to pull in almost $200 million this year.””

What the story doesn’t say is that of the $62, $10 goes to IFFOR the non-profit foundation and $2 goes to ICANN.

So the number ICM the registry of .XXX gets is $50 and even if 230,000 domains were straight registrations that would only come to a little over $10 million, I’m not sure how the author got the number up to “over $200 million for this year” alone.

However the latest ICANN report for June filed by ICM only shows less than 140,000 registrations (pdf) which at $50 per is only over $7 million a year.

Where’s the difference you ask.

Well there are those 80k+ defensive domain registrations which were sold as 10 year blocks, the operative word there are “10 year” , as the name indicates ICM collected a one time payment for 10 years of non-use for each of those domains.

Even at $250 per block that amounts to $20 Million.

ICM says they have sold over $5 Million in premium domain names, so my total is, at most $35 million for the year, well less than the $200 million cited by the article.

Moreover consider that for the 80,000+ blocks ICM sold they won’t get another dime for 9 more years.

You can read the entire article here and do you own math.

 

 

 

Comments

  1. says

    there are today 119,659 domains in .xxx and the daily regustrations are between negative and 20 registrations. 35.000 Domains point to a NS different from ICM´s Nameserver, so at least these 35.000 can be considered registrations by individuals and not part of “the Block”. I leave it to others to do the math.

  2. says

    I know a few folks who work in the adult industry and they
    very rarely see a .xxx name advertised anywhere. To be
    frank, I think the only real reason you’d ever want a .xxx
    TLD anyway is in a ‘hackish’ way, i.e. because your website
    premise/identity is not adequately described in the domain
    itself.

    Sooo, .xxx names are a kind of ‘hacked’ name then… But if
    these .xxx identities are making little-to-no impression on the
    adult market, in terms of consumer appeal, (and from what
    I can see they aren’t) then can we anticipate a similar kind
    of impact for the new upcoming gTLDs?… (or are the
    characteristics of the adult market wholly distinct from
    every other market).

  3. says

    @ri.sk The .xxx might be a good indicator for some of the new gTLDs. The existing adult sites tend to use .COM and .ccTLD domains. The .xxx TLD is very much a niche TLD. Most new gTLDs will have minimal impact at country levels (as opposed to the global level). This is the reality that new gTLDs have to deal with. Some new gTLDs (perhaps the city ngTLDs) may do well but most will struggle. When faced with confusion, endusers may well retreat to what they know and what they know are .COM and .ccTLD domains.

  4. says

    Yes, John, I agree with that generally.

    I do think that two word gTLD names, e.g. boston.clubs, boston.lawyer,
    etc, will effect the .com aftermarket but that it won’t unduly effect ultra
    prime single word .com’s in the resale market.

    What concerns me most about the gTLD’s is that I have heard some gTLD
    “consultants” say that they will promote gTLD as the secure choice and
    infer that ‘.com’ is somehow insecure.

    We’ve already seen Nominet, as the naming authority in the UK, try to
    play that game with .co.uk/.uk recently, through their ‘consultation’,
    and one presumes that they were allowed, or even mandated, by the UK
    govt. to go ahead with this…

    If a similar thing should happen with Verisign, where, e.g. they may agree
    not to keep ‘.com’ updated with the latest security measures so that the
    gTLDs can flourish and become the new ‘leader’, then it’s a different kind
    of security-related control.

    I hope such a thing never happens, and that my country (UK) is the only
    one that wants to test/implement this latest form of control, via domain
    names.

  5. says

    There is a lot of spoofing going on, ri.sk,
    Some gTLD “consultants” have a very narrow view of what makes a successful TLD. The reality is that most of the web is brochureware and goes largely unchanged for months. (As part of the work on HosterStats, I run monthly web usage surveys classifying web usage of hundreds of thousands (and sometimes millions) of websites.) Many small businesses treat their websites like a fire and forget solution that they never have to update. And of course it is not uncommon to see out of date Joomla/Wordpress installations and plug-ins being used to compromise sites. Security isn’t really a function of the TLD – it is more influenced by choice of software.

    Having dealt with a managed TLD (.IE) for over fifteen years, what Nominet seems to want to do appears a retrograde step. It is hard to implement such a thing when people have become used to the freedom of .CO.UK. While some businesses may opt for the .UK, it really is not a mass-market product. This is why I think that Domainindex’s “warning” is massively misunderstands the .UK situation. The policy with .IE has been relaxed over the last eight years and the ccTLD is starting to grow. However very few registrants would want to return to the highly restrictive situation that nearly killed the ccTLD. I think that Nominet really does want to deter any domaining in this proposed .UK TLD but it may not be going about things the right way. The more effective solution would be to deal with the security of .uk ccTLD as a whole but that would involve monitoring approximately 10.3 million domains and a lower number of websites. I think that .XXX registry has a monitoring/rating system run by Metacert but in terms of active websites, it is far less of a problem to deal with than .uk ccTLD.

  6. sak says

    Michael,

    Even your math is incomplete. Not only does ICM have to pay IFFOR $10 per domain and ICANN $2 per domain, but in order to get this TLD, they promissed to protect all sites/users from viruses and malware. Consequently they are contractually required to provide scanning of every .xxx site–they therefore signed an 8.5 million dollar per year contract with McAfee. That is an obligation which they are contractually required to carry. So, that takes your $7 million down to NEGATIVE $1.5 million.

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