Wednesday, November 8, 2017

Publication: a new gTLD for $10,000 ?

A french major Registrar returned from the latest ICANN meeting, also called #ICANN60, and published that the asked price to submit a new gTLD application to the ICANN "could" change to $10,000 or below. There is no indication as if this concerns dotBRAND new gTLDs, community, geographic or other generic new gTLD applications.

My source just made the correction to $100,000. Apparently a "0" was missing.

I fell from my chair and I wondered: would this happen, what consequences could it have?

Reminder
It cost a lot to submit a new gTLD application in the first round of the ICANN new gTLD program: $185,000.00 was the fee. This was just the entry ticket. Other costs applied: writing the application, escrow service provider, backend registry, intellectual property, etc and etc.

In more simple words, it means that the awfully expensive entry ticket could be divided by almost 20.

The ICANN controls if the market of new gTLDs can expand or not and we still don't know when this can happen. Also, it is important to remind that the business of registries offers a fantastic advantage: it is some sort of monopoly since a registry is the sole legal entity to receive authority from the ICANN to operate the domain name extension it applied for. New questions arise then, if it cost $185,000 to acquire a monopolistic financial position: what if that cost was suddenly lowered to $10,000 ?

Possible Changes
Below are the possible changes such a drop of price could cause and I will be adding more content in the future:

Companies
  • Only 489 Trademarks operate their .BRAND new gTLD worldwide but more would be interested and the possible number one reason would be to secure their assets. I already read the number of 50.000 more in the LinkedIn group dedicated to new gTLDs (2,600 subscribers).
  • An interesting reason why a company could want "to apply" is to increase the level of trust for its customers: this is my number one reason and when some single short domain names can cost far more than $10,000 a piece, acquiring an entire domain name extension can seriously make sense in terms of branding.
  • Groups could use their Trademarks and sub-company names as second level domains;
  • The LAGUIOLE case figure is one that most Trademarks fear to face: with a lack of Trademark protection 20 years ago, the famous knives had no authority to operate under the name of the city where they are created until very recently! Who will be first to apply for the ".laguiole" new gTLD and how? As a city name or as a Trademark? With a lowered price for new gTLD applications, this would become a serious option to protect the Trademark for the next 100 years.
Cities
40 cities created their domain name extension worldwide, some even created two extensions for one city but isn't this number nothing compared to the thousands of cities which could then have access to their personal online territory? There could even be a ".bordeaux"!

Registrars
  • They probably would consider building their own infrastructure (a backend registry solution) to host new gTLDs for their clients: some tools exist already and the myth of registering a dotBrand new gTLD the way a domain name is registered might even become a possibility in a close future.
  • They would have to organize and industrialize the process to treat requests. Processing applications required lots of professional knowledge to participate in the first round and if lessons were learnt to prepare what's coming, treating and following dozens of applications will require organization and resources.
  • CSC will still have a problem with the ".csc" new gTLD.
  • Background noise - AND THERE IS A LOT IN FRANCE - tells me that there will be more, much more, dotBrand applications and I am confident that the ICANN registration process will be simplified. What if Registrars receive...hundreds of these application?
  • New offers: a registrar is necessary to operate a .BRAND new gTLD. Doesn't it make sense to operate an existing domain name portfolio at the same service provider for new .BRAND registries?
Backend Registries
A backend registry is the mandatory technical platform to operate a registry and be aware that this is a tough job: don't think that you can do that in your garage...for Top-Level Domains dedicated to selling domain names at least.
  • It is quite possible that backend registries would transform their offers and lower their price, for .BRAND applications at least.
  • Backend registries that I met in the first round did not all offer a complete solution to apply but a technical solution only: I expect this would change...to keep a client and avoid signing too many contracts with too many providers.
  • Backend registries would probably have to compete with registrars and their new small solutions "key in hand" dedicated to .BRANDS (including escrow management, reporting, etc...)
  • Get rid of exit fees and awfully expensive contract renewals. I read contracts that some applicants signed and I wondered: HOW CAN SOMEONE HAVE SIGNED THIS? Some registries' project(s) are already dead just because of this...and there are today far more interesting offers on the market.
.COM domain names
  • The historical domain name extension would still be used of course but new .BRAND applicants would probably start to redirect ".com" to their .BRAND to work more on their new branding and the new options made available to strengthen their Trademark, instead of ".com". 
  • Domain name investors (domainers) would be more pissed : many "hate" new gTLDs since they've flooded the market.
Search engines
  • They would become the best promotion tool for new gTLDs that has ever existed: more ".tlds" and ".brands" indexed means more visibility, strengthening the culture of new domain names for future generations.
  • Google might start to better consider ".rugby" domain names as content related to rugby (this is an example): as of today, new domains are indexed the same way ".com" are.
Validation delays
In the first round of the ICANN new gTLD program, submitting a new gTLD application required to enter a validation process which took long (several months, up to years). If actual ICANN reviews will probably allow to shorten procedures in the next round (ie: some backend registries have already demonstrated that they are "able" technically), the number of applications received could cause a delay problem. 1930 applications were received in the first round: how would 50,000 and more applications be processed by validation agents and how long would it take for an applicant to be granted the use of his extension? This is a real question if cost is lowered.

New gTLD speculation
There is background noise that some applicants would apply to speculate on new gTLDs since applications in competition can go to private auction and it can become far more profitable to lose one rather than launch a new gTLD. If you invest $200,000 ($185,000+) in an application to recover $500,000 to much - much - more in a lost auction, what would that give if the investment price was lowered to $10,000 instead of $185,000? This is an issue to me for generic TLDs but also...for Trademarks.

Could the web support it?
When new gTLD launched, many wrote that the Internet infrastructure could not handle so many more domain name extensions: I am surprised to see that nobody talks about this anymore. I expect to learn more about this when the ICANN technical review is terminated...if it ever mentions this.

Objections
There are procedures to object against an application: when a community is not representative enough, when there could be a trademark infringement, etc... If the fee to object was very high in the first round of the program and the ICANN procedure a complete nightmare, what would this be if - suddenly - hundreds/thousands of Trademarks learnt that someone else applied for their sign as a domain name extension? Again, this is a real issue that the ICANN has to face: as a small company using a Trademark, I just could not face the cost of such a procedure...and protect myself from bad behaviors.

I will be adding content to this publication.

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