Friday, August 18, 2017

Are new gTLDs profitable?

A Registry to operate its own Registrar (or a Registrar to operate its own Registry) is a good solution to lower down the price to maintain a domain name and the reason for this is simple: tech costs are split and most of the money stays in...
Who's who
It is even better when the Registry owns its own Backend Registry and its Registrar.

In simple words: a Registry makes more money when the money paid to mandatory service providers are the same people.

The example that I like to give here is based on Afilias: a Backend Registry provider, also applicant (Registry) for five of the six existing colors. Afilias is not a Registrar.

What when registration volumes drop?
Since 2016, Jovenet Consulting tracked weekly, then monthly, domain name registration volumes from various groups and industries and this post will focus on new gTLDs that have the name of a color.

There are six of them and one is a Trademark so we won't pay much attention to it since it does not sell domain names to end users:
  1. .RED (€11/year)
  2. .BLUE (€11/year)
  3. .PINK (€11/year)
  4. .BLACK (€31/year)
  5. .GREEN (€54/year)
  6. .ORANGE (a dotBrand new gTLD = no price)
(there's .GOLD too but does it count as a color?)

I went to retail registrar Uniregistry and extracted prices that you can see above. The first three are acceptable prices but I find .BLACK and .GREEN quite expensive and since Uniregistry is a cheap Registrar, you can easily expect that these domain names will probably cost much more at other service providers.

When looking at the new gTLD report entitled "New gTLDs related to COLORS", you will note that almost ALL registration volumes continue to drop starting January 2017 and if you look at May 2017, something strange even happens.

So: profitable?
Does it mean that such extensions are not profitable? I don't think so.

I heard a story which said that "red" was a special color in some countries in Asia and this was the reason why ".red" domain names were so successful...until May 2017 apparently. I won't count .GREEN here because this TLD was acquired lately by Afilias and you will note that registration figures are quite different from the first four TLDs.

The .RED new gTLD is now below the 50,000 registrations so it does not pay ICANN the $0.25 fee per domain anymore. Even if the curve is dramatically going down, it still has 48,000 domains with a probable majority being paid by Registrants. Since Afilias is Registry and Backend Registry for its TLDs, it pays the minimum to maintain its own domain names: below $5 per year? Less than $1 maybe?

Let's imagine that these 48,000 domains are paid by Registrars at the price of less than $10. It still means quite a lot of money for the Registry in the end. A lot less for .PINK and .BLACK.

What about "strategy"?
In 2016, and during a period of 7 months, the .RED Registry had between 308,000 and 318,000 domains on the market. I have no idea how nor why these numbers were so high but I believe that the only question to have today is: "was it worth it?"

If it takes so much domains to end up with so few: it is still 48,000 domain names on the market. Let's assume that these domains are paid, and hopefully renewed, I consider that such strategy is a good one because all Registries want to have 48,000 domains names renewed on the market. Should Afilias have adopted the same strategy for it other "colored TLDs"? The question remains.

Monday, August 7, 2017

How to choose the right "new" domain?

One could think that this post is going to be about why it is better to choose a new domain name instead of a ".com". Actually it is not because we like ".com" domain names at Jovenet Consulting: they are very useful to be used as redirections.

This article is about the factors that one should consider when selecting the right domain name for a new business (because you often need a new domain name for a new business). Of course, thinking about buying a new domain or a ".com" matters; but there are other factors to consider...
Years ago things were different
Years ago, one extension launched, not hundreds at the same time so choosing was easier and made a new extension very attractive (I remember trying hard to register ".asia" an ".eu" domain names). There are now so many domain name extensions that one does not necessary have the time to search for all of them and would be tempted to think: "hey...why bother searching when everybody knows what a ".com" is". This is a problem for new gTLDs: still, people don't necessary know that they exist...but for those who do, there a certain factors to consider prior to buying.

Which other factors to consider?
I sometimes help trademarks to look for the right domain names and also buy some for myself from time to time so there are things that I do prior to registering a new domain name

Singular VS Plural
I am always very careful with singular and plural versions of the same domain name extension: I would not buy one and not the other or just would not use one of these unless it is absolutely necessary. I believe that a good example can be the ".photo" and ".photos" new gTLDs: I would buy the two of them...but not only.

I created a list of these new gTLDs which exist in two versions: Singular and Plural. If I a pay a lot of attention to check that list prior to suggesting a client to buy a domain name, I am also very cautious with similarity. When considering to buy a domain name related to photography, one should know that the ".photography" new gTLD also exists. With new gTLDs, similar domain name extensions can cause to choose the wrong domain name very easily.

Similarity
Similar domain name extensions are to me the worst trap that one can fall into. Some domain names can be very similar due to the extension ("first level domain" for the geeks). For example, if a domain name ending in ".new" will probably not have the same content as the same domain name in ".news" (ie: www.whatever.new and www.whatever.news), confusion could be total for two similar websites: one ending in ".photo" and the other ending in ".photography", same for ".build, ".builders" and ".construction" or ".taxi" and ".cab".

I often update my list of similar new gTLDs because it is to me the number one tool to use to avoid choosing the wrong domain name extension when searching for a name.

There is another factor to consider in similarity: if it is rather unlikely that the plural version of an extension will exist, it is more likely that...the .BRAND extension of a generic TLD will exist. I mean that a Trademark might have applied for a new domain name extension that a third party will not be able to register: it is the case for .AUDI and .AUDIO domain names. The .AUDI new gTLD is a Trademark and available for registration to the AUDI Trademark...only. Another example: ".CITI" and ".CITY"

".com"
The ".com" domain name is also to consider when looking for a domain name because the risk remains high to start a communication when a third party already uses the same ".com" domain. When not available, I'd just suggest to consider changing name and not waste time trying to negotiate with an existing owner who wants to sell a ".com" at a high price. New gTLDs offer more precision today and I consider that ".com" can start to be used as redirections. When creating the name of a project, a trademark or a company, the domain name should be part of that search and not come second.

Actually, confusion now also exists with ".com": did you know that there is a .CAM and a .BOM new gTLD?

Register your Trademark using an agent.