We know that .com/.net registrations as of the last report sits at 116 million registrations is growing at the rate 8 million new registrations a year.
We also know including the 116 million .com/.net registrations, there are 225 million domains name registered as of March 31, 2012 with 10% or some 20 million new registrations coming since 4th quarter of 2,010.
So basically your looking at growth in the total domain name space of 17 million or so for the last year including all ccTLD’s and half of those are going to .com/.net.
This begs the question of where are all the registrations for the new gTLD’s going to come from?
Lets assume registration rates stay where they are with 17 Million new registrations a year.
If even 1/4 of all these new registrations lets just call it 5 million a year go to the new gTLD’s, with 1,000 non brand applications, that only leaves 5,000 domain names on average for each new gTLD registry.
If each new gTLD registry charges on average $20 a domain, that’s only $100K gross before all of the costs, including back end costs the $25K minimum to ICANN and of course marketing costs, plus the cost of acquiring the string.
There will be some registries which will much higher registrations which will mean other registries may only get registrations in the 4 digits.
With prices for some generic TLD’s expected to reach into the seven and eight figures its going to take a lot of registrations to make that money up.
So it seems the only way that a substantial number of these new gTLD’s registries will have a chance to recoup their investment and make their strings into profitable businesses is to hope that the overall registration rates increase substantially from say 18 million a year to 30 million or more and/or that their share of new domain registrations come at the expense of existing domain registrations of incumbent strings substantially more than 25%.
New gTLD applicants will look at the numbers of registered domain names, 225 million and point out there are 6 billion people on earth and conclude its only logically that in the years to come there will be hundreds of millions of new domain registrations increasing the total registrations to close to 1 billion meaning there will be plenty of business for everyone.
One can also assume that businesses and people might buy multiple domains, call them defensive or protective or just smart business, which will increase the overall totals without increasing the number of users.
For example I would buy thedomains.blog when available, how could I afford not to?
Anyway you look at it the total number of registered domain names and the percentage of growth will have to increase substantially from current numbers for a substantial number of new gTLD operators to make their money back and a profit.
New gTLD’s investments must be viewed as a long term investment
If the total new registrations continue at the same pace of 17 million a year and remains the same over the next ten year period, there would be 170 million new domain registrations and a large registry with 50 or more strings could get what would then be a market share of 7% of all new registrations.
Its only over the long term that investment in new gTLD’s starts making sense.