As New gTLD Registrations Hit 2 Million Domains, Here Is Our Take On The New G’s

We have been talking about the new gTLD program for well over 6 years and over the weekend we noted that the number of new gTLD registrations passed the 2 Million mark.

So we thought this would be a good time to give some thoughts about where the program is at and where it is going.

Since we have been writing about the new G’s we have pretty much said the same thing, we don’t know how they will do or what  effect they will have on the .com aftermarket.

After the launch of 194 new gTLD’s into general availability and 2 million registrations, we still feel the same way. While there is certainly some good data available from which we can draw some conclusions, for the most part the jury is still out.

In my opinion the jury is going to remain out until the third quarter of 2015, at that point we will have the first renewal period for those new G’s released in the first and second quarters of 2014. Considering the amount of  domain names that carry premium renewal fees, I will be very interested to see how high the renewal rates are.

I have also said its going to take 5 years at a minimum for heavy user adoption and an active aftermarket.

If you are going to be registering new G’s for the purpose of resale, unless you are happy making a very small profit on a domain registration, by in large you are going to have to be prepared to hold the domain for at least 5 years.

My thoughts on that have not changed.

As we sit today the new G’s have been dominated by Donuts who have launched 119 of the 194 new gTLD’s in general availability. Their “partner” in some strings Rightside have launched 14 and Uniregistry have launched 9 new gTLD extensions.

So out of the 194 new gTLD’s that are in general availability, three registries have launched 142 of them.

There has not been a non-IDN launch of a new gTLD by the three largest other applicants for new gTLD’s, Minds + Machines, Google and Amazon.

So as we sit today there are still plenty of arguments for both the proponents and opponents of the new G’s.

We have known for a while that the trademark holders are not playing in the new G’s.

We can see outside of the registrar channel that very few registries are spending money visibly marketing.  .Club, Uniregistry and Radix are the rare exceptions.

I still haven’t seen a television commercial or any other advertising in any major media outlet for the the new G’s. So far nothing from registries or registrars, other than 1and1.com’s campaign last year before the new G’s even launched.

Arguments for proponents of the New G’s:

1) The big Geo’s are yet to come, .London, .NYC should add significant numbers of registrations and publicity for the new G’s.

To date only one big Brand applicant (Axa) has “launched” its new gTLD and none have begun advertising campaigns around a new gTLD domain whether they own the extension or not.

2) The “better” new gTLD extensions haven’t launched.

Almost all launched new G’s to date were single applications placed only by one company. In the case of the few extensions that were settled by private auctions and are now launched, .club and .photography are ranked 3 and 6 respectively, in terms of domain name registrations.

The new gTLD’s with the most applications not only haven’t launched, but they haven’t even been settled, these include .web, .music, .books, and .app to name just a few.

Neither Google or Amazon which applied for 101 and 74 new gTLD respectively have launched an extension (Google launched an IDN)

Although the number of reported new gTLD aftermarket sales have been very small, Godaddy/Afternic is in their quiet period for Godaddy’s IPO and they haven’t released sales figures of any domain sales in over 2 months.

3) According to a study by Sedo, which we chat more about below, only 40% of people are even aware of the new G’s and over time that number will grow substantially, as other registries launch and maybe will spend some marketing dollars.

Once again the new gTLD’s launched so far have been dominated by Donuts and Rightside. These registries have a premium registration and renewal model, we don’t know what a lot of the other registries have in store, nor do we know the pricing if they do go the way of the premium domain route.

4) There are Millions of domain names that are not available for registration due to ‘Collision”.  ICANN prepared a  collision list for each extension which they are not allowed to sell or allow to be registered.

Most of the collision lists runs into the four figures of domain names, but some lists are into the five and even six figures of domain names.

Therefore  the  number of domains  are artificially low due to the collision domains being unavailable to be registered.  Once those domains become available to be registered, the overall registrations numbers will shoot up.

5) Two charter domain registrations in new gTLD are not yet allowed.  Although many registries have applied to ICANN to allow the registration of two character domains, as we sit today no one can register a domain name containing two characters (two letters, two numbers or a combination of a letter and a number, which has taken thousands of domain names off the market for new gTLD’s

For the opponents of the new G’s, there are plenty of arguments for them as well:

1) Out of the 2 million new gTLD domain registrations, 500K or more of the registrations have been given away for free.

Registries have registered over 100,000 of their own domain names and reserved them for future sale or development, so the “real” number of paid new gTLD’s is probably under 1.4 Million.

.TK which has been offering free domain registrations for several years is now the second most registered TLD in the world, only .Com has more registrations. I have never seen a .TK domain name sell on the aftermarket, nor have I seen any big marketing campaigns around a .TK.  We wrote a cover piece on the .TK registry back in March 2012 when they “only had” 8 million domain registration. according to the latest Verisign report .TK now has around 25 million domains at the end of the 1st quarter of 2014.

Giving away free domains is not a problem. There are plenty of takers.

2) Other than luxury.estate and few .club domain names, there have been no notable sales of new gTLD domain names and the number of reported aftermarket sales has been very small in relationship to registrations.

3)  2 Million new gTLD registrations is still less than the number of .Biz domain name registrations (2.6M), less than half the number of .info (5.6 M) registrations and just slightly higher than the number of .US registrations (1.8M), none of which have had much of an aftermarket over the years. Personally after holding internet.biz since the day the extension launched, I sold the domain for $20K this year.

The number of new gTLD registrations is also 1/10th of the aforementioned .TK ccTLD.

4) While many point to the brands as the game changer for new gTLD’s, the fact that only one of the .Brands (Axa) that applied for their own new gTLD have  launched. So while the supporters of the new G’s are looking for .Brands to lead the way, those .Brand applicants don’t seem to be in any rush to launch or use their new gTLD’s.

Bottom line there are no major advertising campaigns that are currently running in mainstream media, using a new gTLD.

5) Premium pricing and renewals are pretty aggressive and in many cases have priced domainers out of the market.

It is pretty tough as the  early investors in .TV found out to pay $1,000 a year renewal fee and sell a domain name for significant dollars that carries such a fee. Many domain names carry registration and renewal fees in the four figures and as we wrote about today, now well into the five figures.

6) The Sedo International new gTLD Awareness Report for 2014 did not contain a lot of great news for new gTLD’s:

“”Among marketers in the U.S. 75 percent said that new gTLDs would make the Internet more confusing”

“This is a much higher number than a year ago, when only 62 percent of U.S. marketers said new gTLDs would make the Internet more confusing.”

“The underlying theme throughout all the results is that awareness and acceptance of new gTLDs is still the biggest hurdle for them to ultimately be successful”

Today, the europeandomaincentre.com published views by others in the industry including Frank Schilling and Rick Schwartz. I was asked to participate but declined as I have my own vehicle to share my thoughts and I’m sure you have heard enough from me. You should check out that post to see what others think about the 2 million mark.

Comments

  1. Joseph Peterson says

    Without an active aftermarket early on, domainers will become (and already are becoming) fatigued with nTLD purchases. Less chance of a sale and higher carrying costs? It doesn’t take a genius to see the drawbacks.

    Domainers, who tend to be interested (more often than not) in getting rich quick, aren’t patient enough or well funded enough to follow Michael Berkens’s example of waiting 5 years. They simply won’t do it.

    So, yes, a lot remains to be seen as sites come online here and there, city GEOs become more prominent, brand-owned extensions start popping up, large new registries start throwing their weight around, and additional nTLDs are launched.

    But domainers — who may have contributed the bulk of registrations so far — will be less and less likely to register domains in the nTLDs as time goes on. Unless they see sales, they’ll stop paying. And if domainers stop paying, registries will be forced to fight each other like hungry dogs for that tiny scrap of annual online startup projects that is willing to pay extra for something unfamiliar.

    I don’t think the future is bleak. But it’s not all sunshine.

    Partly cloudy.

  2. says

    I give Berkens kudos for the post. It’s a balanced presentation, especially considering the author’s nexus to the proponents.

    Some oversights here and there, including the impending, and looming new gTLD renewal massacre. [I recommend that posts here be edited for spelling and grammatical errors, regardless of what the comment policy is. This is a great article, and could be quoted widely].

  3. Kassey says

    “not one of the .Brands that applied for their own new gTLD’s have launched” Actually .axa has launched. AnnualReport.axa is a live site and Domains.axa now takes registration from AXA affiliates.

  4. says

    Great post Michael I enjoyed it very much.
    I think for domain investors it’s a better chance to win in Vegas then in the new G’s aftermarket.
    That is why i play small.Buy at reg.fee and renew at $17.
    Without a doubt the registries are making the money.
    Us?…maybe in 10 years

  5. says

    The big brand new gTLDs are not the saviours of the small new gTLDs. Most people ignore the extension. When they use Twitter’s URL shortener, they don’t recognise the .CO extension and probably will never see another .CO website. Searching in Google means that the searcher is typically directed to the .COM or local .ccTLD site. They just remember the brand (Google) and not the extension. The new gTLDs don’t have that kind of traffic boost since, apart from the regional new gTLDs, they are not local.

    Registry landgrabs have killed the aftermarket for new gTLDs. They have also gone some way towards dampening development trends. Some of these grabbed domains would have been developed into websites (although they might just have easily been parked on PPC by domainers waiting for a better market). The knock-on effect is that these landgrabs have also killed a lot of early market speculation and some of this speculation would have driven interest and development in the new gTLDs.

    One major problem for the new gTLDs is that the main gTLD market is changing rapidly. The growth figures for .COM in 2014 are lower than those for 2013 ( http://www.hosterstats.com/com-growth.php ) and the other legacy TLDs are not doing too well either. It looks like there are general consolidation trends at work as registrants focus on their main brands. The .COM TLD has the growth momentum and it gets more new registrations each month than the entire number of new gTLDs registered to date.

    The lack of marketing is a big killer for new gTLDs. The registries seem to be engaging in that old internet fallacy of “if you launch it, they will register”. Well the TLDs have been launched but people don’t know that they have been launched and they don’t know where to register. That Sedo awareness study should have been a wakeup call to the registries. Sedo generally pumps whatever TLD it is trying to sell smothering it in a thick goo of positivity and sales stats. The new gTLDs are going to take a few years to develop and there may be a few firesales before then.

  6. says

    terrific summary, truly, great job. very broad and thoughtful. the only thing ill add is from a technical point of view, its still in beta. many registrars are showing different prices or ask you to do quite a lot of research to understand when and how to register a name, and you need to get it in your cart to see the real price, lots of names show available but arent, and its unclear at what price you are paying, might pay or could pay….in many cases to the registrars benefit. I think the rush to get registries out has put an enormous backload of to-do’s on the registrars and its unclear and inconsistent where and how to see just what exactly is going on with landrush periods, premium names etc… and im full time looking for this info.

    Page Howe

  7. says

    Here’s one thing that I can personally share from my own research and experience. Many consumers are not going to understand how to properly use these urls for a long time. I mean years. Not one or two, but try five or more.

    Anyone who is over 40 years old, and or is not an “advanced” internet user, a high percentage of consumers are going to type some version of the new GTLd site they’re supposed to go to, and they’ll add a .Com or a .Org to the end of it.

    How do I know this? Because within another company that I founded, we have processed more than 150,000 call records within the last 12 months. All of these calls are recorded for regulatory purposes, and without giving away too much information, when we receive these call records, we see everything. Keywords that drove the call, the site and or the ad that the consumer clicked on. Terabytes of data.

    One of the things that we saw over and over again, was that when there is some unknown and or uncommon GTLd string that consumers don’t commonly see, a very high percentage of them end up searching for the URL and then append a .com or a .org to it. (.com by like a 20 to 1 ratio). Sometimes people would append .net, but not often.

    Lower information consumers are typically going to make these mistakes more often, but what many companies are going to find, is that if you build entirely around a new GTLD string, and my guess is that the longer strings will see this far more often, there’s a very good chance that you’re going to be driving a lot of consumers to a search result page instead of your domain. This of course will be where your competition is waiting with PPC Ads to steal the consumer away.

    I’m trying to figure out if there’s a way for me to publish something that won’t require ten hours of time and still be a substantial case study, and or if it is even worth doing so. Seems like so few people actually care about factual data driven information these days.

    • says

      @Sean Sullivan

      Thank you for sharing the insight and factual data. I very much appreciate posts like yours that have basis in substantive data. Too many people float unfounded opinions – I place more stock in inferences driven by data. …and you just backed yours with a wealth of data. Thanks.

      And please alert me if you do publish a more elaborate write-up. My G+ profile is linked to my posts.

  8. says

    Well after 6 months the new tlds are surely not a runaway success, most predicted that IF they do well it will take 5 to 20 years. I am interested to see how they grow (or not), and how often I’ll come across them in advertising and media – so far if you weren’t into domains you wouldn’t really know there are all these new extensions. If they fail, what will be the signs that tell you they fail? It all still has to play out. The aftermarket is still active for .com and other legacy extensions, with buyers still paying huge premiums for good .com’s. The blackout on Afternic/Godaddy aftermarket sales is too bad because we miss seeing all that data, and I wonder how aftermarket sales will do after the summer slow period. I think the new tld market will get more interesting when .web, .music, .books, .app and extensions of that calibre are released, that is when I will very likely buy my first new extension.

    • says

      Six months is traditionally just the end of the Land rush period in large TLDs. This is when the normal daily registration patterns emerge. Unfortunately for the new gTLDs, that Landrush period was compressed into days and weeks. Some new gTLDs are having difficulty in getting 100 new registrations a day and that’s a typical registration volume for a small ccTLD.

      Signs that a TLD is failing that can be seen in web usage analysis surveys. One of the metrics used is the “rate of abandonment”. This is where development ceases on a website and often, in the first year, it is a WordPress or Joomla site with just one post. These are long term issues and can take a while to appear. They occurred early in the .CO ccTLD’s launch and many of the abandoned sites were dropped when it came time to renew.

  9. jo says

    Hi. I am working on 2 plans for .services and .property websites which will both require a substantial cash investment on my part. After reading these comments, now I am unsure whether to push forward or not.

    Mark Daniel Adamczyk, you commented that we won’t be able to index these new .gtld domains for SEO purposes.. Please could you explain further?

    Both sites will be targeted to a local market of which I already have many contacts of which I have gained from social media sites.

    I am slightly confused now. please advise.

    Thank you in advance

    • Joseph Peterson says

      @jo,

      There shouldn’t be any issue with these TLDs not being indexed in search results by Google. For one thing, as Michael Berkens pointed out above, Google itself has applied to run lots of nTLDs. So naturally Google will see to it that they’re indexed.

      But you can see them indexed already:

      https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=site%3A.guru

      That’s a search for “site:.guru”.

      Do you see the websites listed? So do I.

      There might be various arguments against this or that new TLD. And those arguments are arguably more or less valid or more or less important / unimportant. But I don’t think lack of search engine indexing is considered to be an issue.

    • accent says

      Agree, SEO will come along. I think Browsers are something of an issue, but that is temporary.

      On other issues you will hear strong opinions on either side depending largely on the writer’s own investments. If you can also get the matching .Com, such as YourNameServices.com then you can have the best of both worlds.

    • accent says

      I was not referring to the writer of the article. The line about comments reflecting the writer’s investments came as I was biting my tongue really hard to keep from posting a biased comment.

  10. says

    There is only one thing that will kill this market and that is the over priced “premium” names. I wouldn’t pay thousands or even hundreds of dollars for such names in a market so controversial. I’m waiting for donuts to get all their names out the way and see what the other guys come to the table with. I think the market will turn well then and donuts will be pushed out the way with better priced models and better extensions.

    When the renwals come, there goes half the registrations already, and with a collapse like that the industry will be bust for the registry at least.

  11. says

    Donuts is not the only one doing variable pricing (VP), which by the way is what verisign at one time wanted to do with .com domains (you can thank the ICA in large part that your not subject to that for you .com’s right now)

    Rightside, Radix, Minds + Machines are also doing VP so far.

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