Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.

Avenue4 LLCRead Message Promoted Post

Home / News I have a News Tip

Big Price Increases Needed to Keep New gTLDs Alive, Says Uniregistry CEO

"Uniregistry is to massively increase the price of some of its under-performing new gTLDs in an effort to keep them afloat." Kevin Murphy reporting in Domain Incite: "Sixteen TLDs from the company’s portfolio of 27 will see price increases of up to 3,000% starting September 8, CEO Frank Schilling confirmed to DI today. 'We need more revenue from these strings, especially the low volume ones, without question, [Schilling] said. ... demand among worldwide consumers has been slower than expected."

Related topics: New TLDs
SHARE THIS POST

If you are pressed for time ...

... this is for you. More and more professionals are choosing to publish critical posts on CircleID from all corners of the Internet industry. If you find it hard to keep up daily, consider subscribing to our weekly digest. We will provide you a convenient summary report once a week sent directly to your inbox. It's a quick and easy read.

I make a point of reading CircleID. There is no getting around the utility of knowing what thoughtful people are thinking and saying about our industry.

Vinton Cerf, Co-designer of the TCP/IP Protocols & the Architecture of the Internet

Share your comments

Not great Daniel Aleksandersen  –  Mar 08, 2017 11:17 AM PST

I really hope this won’t be a trend for gTLDs. This highlights how big the risk is when you build your business on an unproven gTLD. I just moved my own website to a .blog domain. Hopefully, for me, Automattic will keep the prices of .blog reasonable.

Not All New gltd's Are The Same Max Menius  –  Mar 08, 2017 4:04 PM PST

It is very important to maintain perspective on this news. While it is a very poor business practice to subject registrants to unexpected fee hikes, the tld's affected are under-performing ones and have a relatively small user base.

Many of the new tld's are self-sustaining, profitable, and growing. There are unjustified critics of the new tld program who are rooting for its demise because they have a vested financial interest in legacy tld's like .com. Many of these people have large, costly portfolios of .com's that will never sell. Consequently, they are out today like chicken little proclaiming the sky is falling. It's not.

Uniregistry's renewal increase on a small group of unpopular tld's is not indicative of the future of all tld's. Some web addresses simply have better viability.

.COOP has less than 8000 registrations at Charles Christopher  –  Mar 09, 2017 9:54 AM PST

.COOP has less than 8000 registrations at ~$120 for one year and $85 for 10 years. I don't recall ever having heard news about them struggling or needing large price increases to survive. From what I have seen there are many such TLDs including ccTLDs.

I also fail to see how raising the price will suddenly make a TLD "successful". It does make sense that there is a desire to shift income onto a TLDs most desirable strings and see what the market will bare. I would be interested in a definition of "low volume TLD", what is the threshold? Such a number would provide better comparison to the .COOP example. I suppose if a gTLD has perhaps only a dozen registrations it would appear it might be a pseudo bTLD (brand) and thus being "leased" as such. Perhaps a new "class" of TLDs is being teased out by this first round of nTLDs.

I make those points because I see .COM prices increasing, and I am concerned over the reasons Verisign will use to justify the increases ....

Short-sighted move Doug Mehus  –  Mar 14, 2017 11:25 AM PST

I had to both chuckle and frown at the "headline" of this article in my weekly CircleID e-mail newsletter as this move is both incredibly short-sighted and backward looking.

This will actually have the opposite intended effect by forcing people into less expensive, over-populated gTLD strings and just "giving up" on having a more desirable domain name.

A better strategy would be to see consolidation through mergers and acquisitions within the registry operator space so build greater scale and overall cost of service per gTLD. Donuts has the right model but poor implementation - their cost per domain name is too high and they have, arguably, the most under-penetrated of new gTLD strings. Using their "lean" business model, if they were to dramatically lower their pricing across the board, they would likely see a significant uptick in registrations and the higher penetration strings would effectively subsidize the lower penetration ones until, over time, they inevitable pick up.

Another strategy, which could also be used in concert with M&A;in the space, would be to the outsourcing of the back-end registry administration and technical operation with a few "lean" players (i.e., Afilias, VeriSign and NeuStar, among others). Alternatively, if they have too much of a "monopoly" in these third-party administration services, ICANN could look to regulate the price they can charge for back-end registry administration services, adjusted biennially with the global Consumer Price Index as determined by OECD or IMF and allow for significant public comment, surveys and outreach in any request for a price increase.

I realize that's a bit counter to the "free market" but, I'd argue, the domain name space is anything BUT a "free and open market."

The problem we have is these registry operators are backed by private equity firms and venture capitalists in many cases, who seek a "quick" ROI. In the case of Uniregistry, where I'm a happy customer of their Uniregistrar domain registrar business, I'm wondering if Schilling has seen a decrease in the value of his owned & third-party domain resales business as a result of the new gTLDs, which he was, perhaps, counting on to partially subsidize his Uniregistry business initially until it built scale? :(

Another problem we have:  large, low-cost registry operators/registrars have been demonstrably slow at rolling out their delegated new gTLDs, such as Amazon and Google, despite their assurances to ICANN to the contrary. ICANN needs to "grow a pair," if you will, and demand they roll out the public launches of their other promised and delegated gTLDs within the next 12 months or they should threaten to pull their registry agreement and transfer it to another operator who will. Similarly, Google continuously refuses to roll out the global launch of its Google Domains registrar business. :(

Cheers,
Doug

>forcing people into less expensiveOnly until there Charles Christopher  –  Mar 14, 2017 1:05 PM PST

>forcing people into less expensive

Only until there are no such options.

Once nTLD prices reach some point it will be the "fiduciary responsibility" of Verisign and others to RAISE prices. Then that "option" disappears .....

True, though I'd argue it isn't in Doug Mehus  –  Mar 14, 2017 2:01 PM PST

True, though I'd argue it isn't in their "fiduciary responsibility" to raise prices.

Moreover, I don't think we'll ever truly exhaust .com domain names given the redemptions that occur.

Perhaps we need to look at curtailing domain name "backordering" and/or stop publicizing the date on which an expired name is released from "pendingdelete" status to stop domain squatting "bots" from re-registering them?

Also, in terms of that becoming a problem on price increases, we can fix that. We can go back to allowing ICANN to approve ALL price increases EACH time the RO requests one, not writing into the RO agreements what percentage they can increase prices each time. We should also write in a clause into the RO agreements that allows either party to terminate the RO agreement without penalty with 12 months notice in case the RO doesn't like ICANN's decision and ICANN doesn't like their proposed price increase/pattern of behaviour.

Regulation works fairly well in the electricity market and so, too, it should apply to the domain registration space. :)

Cheers,
Doug

>Regulation works fairly wellThe news I am Charles Christopher  –  Mar 14, 2017 2:29 PM PST

>Regulation works fairly well

The news I am reading and the stories I am reading is ICANN does want it wants. And after being in this industry for 17 years I see ICANN giving Verisign what Verisign wants.

Just review ICANN meetings and note the typically only "sponsor" of the events.

>I'd argue it isn't in their "fiduciary responsibility" to raise prices.

When "everyone else" is charging $50 and Verisign is "only charging $10" would you be willing to go before shareholders and convince them why that is the way it should be? Prices will be going up ... Verisign might first figure out how to tier pricing for keyword value and then raise across the board, but they are going up.

People that are growing up today don't have the ".com" and ".net" bias that "today's domain experts have". They will go for keywords in other TLDs, pay more, and Verisign will recognize the point where dramatic prices increase will have no effect of their drop rate.

I respectfully disagree that prices need to Doug Mehus  –  Mar 14, 2017 3:01 PM PST

I respectfully disagree that prices need to go up to that degree. Maybe the new registry operators shouldn't have tried to launch so many undesirable (and long!) gTLDs like ".accountant", ".chiropractor" or obscure ones like ".casa" (instead of ".home") as, while each gTLD can share a common platform and scale nicely, each requires separate marketing budgets. Afilias has a better strategy, in my opinion, they started with just a few that shared a common "theme" (i.e., colours) or Asian family names (i.e., ".kim") and then "tucked in" a few more gTLDs that they bought out so that way they didn't have to spend money marketing too many new gTLDs all at once and could also limit their spending based on those "common themes."

Network Solutions used to charge an outrageous $75 per year for ".com" and ".net" domain names, when they held exclusivity both on registrations and on the registry, and both government and ICANN wanted to bring prices down.

The registry operators need to find a way to innovate so as to control price increases. I disagree that the competition will simply follow in lock step as that would prompt all kinds of anti-trust complaints, from the U.S., Canada and the like.

And, I'm not convinced the U.S. has even "permanently and forever" ceded control over the domain name space to ICANN. That may be true, but, ultimately, if they decided to "take back" their authority, they could, perhaps through expropriation or eminent domain (pardon the pun, not intended) laws enshrined in US common law, in legislation and in the US Constitution. Moreover, if they decide to pursue anti-trust complaints against ICANN or individual registry operators, and are successful, they would then gain control.

Cheers,
Doug

Please note, I question the increase as Charles Christopher  –  Mar 14, 2017 3:53 PM PST

Please note, I question the increase as well but for different reasons. However once done, I am predicting an effect on "the cheap crowded TLDs".

>Network Solutions used to charge an outrageous $75 per year for ".com" and ".net" domain names

So let me try this from a different angle. Have you ever looked at the COM/NET zone files to see the domains that are actually registered? I have, a few times, by eyeball. Yes it might sound silly to do, but it means I know what the list is we are talking about. And others like me have also done this.

Try doing so yourself then ask yourself this question:

If .COM went from $10 to $80 and the reg rate dropped by 7/8'ths (to keep the numbers simple), would the world even notice?

I am certain it would not as 90% of the .COM domain registrations are literally computer barf. Look at the .COM zone file yourself and see what you think. In the many years that I have made that statement, nobody I know that HAS seen the .COM zone file has disagreed. In fact some have said I am being generous as to the amount of garbage registrations. 

Could most other TLDs with stand such a change? Maybe not. But .COM can. So if others can raise their prices ..... The disparity between you and I is easily resolved. When the notice of increase is put out, the smart folks will renew for 10 years. At that point their will be no lawsuit, there will be folks saying "Why did you not renew at the lower $10 rate for 10 years? Why did you foolishly wait until the price increased?"

>I am being generous Sorry, intended to Charles Christopher  –  Mar 14, 2017 4:06 PM PST

>I am being generous

Sorry, intended to say CONSERVATIVE.

# 10 Reply (max. reply level reached)  |  Link  |  Report Problems
While I haven't looked at the COM/NET Doug Mehus  –  Mar 18, 2017 12:15 PM PST

While I haven't looked at the COM/NET zone files recently, I do look at the COM/NET Registry Operator Reports VeriSign puts out (which, sadly, are delayed by 3 months for reason(s) under which I'm unclear).

I do agree with you that MANY domain names, especially .COM names and also .NET names, are, as you put it, "computer barf," but don't you think if the prices went up from $10 to $80-90 (or whatever it is), that would increase the cost for large domain name portfolio owners that would make really "low value" names significantly unprofitable that they might re-position the names they buy through their computer algorithms? We're already seeing falling revenues for "parked domain pages," in general, are we not?

Cheers,
Doug

# 11 Reply (max. reply level reached)  |  Link  |  Report Problems
>don't you think if the prices went Charles Christopher  –  Mar 18, 2017 6:39 PM PST

>don't you think if the prices went up from $10 to $80-90 (or whatever it is),
>that would increase the cost for large domain name portfolio owners that
>would make really "low value" names significantly unprofitable

First, I am a domainer. So I have to be honest with myself and what the internet is actually about.

You are correct, prices increases would injure domineers like myself.

But the fact is, the internet and domain names were not created for domaineers, nor for domaineers to profit. This is a reality most domainers are not willing to admit, even to themselves. And on a price increase I will do my best to renew out my best domains for the full 10 years.

To date domainers have been the unpaid sales force of registries, this is a fact registries refuse to admit publicly, but their actions make clear they know this has been the case.

The gap/arbitrage that domainers have been working in is closing. This is why Frank moved one dot to the right. This is why registries are using variable pricing versus fixed, and why I argue everybody better pucker up because Verisign will be doing this to ...

So the right question is, what happens to those domains when domainers are not willing to hold them? Probably many will go to small business and hobbyists. And thus why is that use ignored? In fact isn't that precisely the justification of the nTLDs to begin with? Get "decent" domains to more "End Users"?

That all said, there will always be domainers, someone who recognizes value where most others do not. But those are not the people that bring real value to the internet ... Which is also why most domineers I know also are involved in one way or another with trying to develop some of their domains.

>I do agree with you that MANY domain names, especially .COM names
>and also .NET names, are, as you put it, "computer barf,"

MOST :) And I admit, I never believed this until I sat down and went through the list. It makes no sense at all, and when you actually look at the zone file it still makes no sense.

But once you eye ball the zone file you have to stop deceiving yourself, most are garbage.

I will add that I have been watching zone files since 2001 and I do have many reasons to believe registries PAD their zone files ... That is another story, but if we see prices go up and regs count seem to stay higher than expected, remember what I just said ...

Good points - and I agree with Doug Mehus  –  Mar 20, 2017 9:45 AM PST

Good points - and I agree with you prices will inevitably go up but I still don't necessarily agree that VeriSign will raise wholesale COM/NET prices, in percentage terms, as the newer gTLD registry operators. They may be a "puppet" for ICANN or, more darkly, ICANN may be a "puppet" for VeriSign but if ICANN started seeing 100, 50 or even 20 percent annual or biennial price increases, I think that'd make them take a "second look" at at least the possibility of a transition away from VeriSign and the logistics required. :)

You did "bait" me with one intriguing end point...What do you mean by "PAD" their zone files? They add names that are actually still "available/unregistered" or the registries "purchase" names for themselves?

To post comments, please login or create an account.

Related

Topics

Cybersecurity

Sponsored byVerisign

IP Addressing

Sponsored byAvenue4 LLC

DNS Security

Sponsored byAfilias

Mobile Internet

Sponsored byAfilias

Promoted Post

Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.