[gnso-rpm-wg] 99%+ reduction in sunrise utilization rate per TLD supports EFF call for elimination of sunrise

[George Kirikos]

Hi Volker,

On Mon, Aug 14, 2017 at 8:49 AM, Volker Greimann
<vgreimann at key-systems.net> wrote:
> this is a difficult question to answer, especially for registrars operating
> a reseller channel as their users are usually not the registrants. For us,
> revenue is based on purchase price, maintenance cost and implementation
> costs. So I would assume the revenue to be higher for sunrise registration
> simply based on the fact that most registries have higher sunrise
> registration fees than standartd registration fees.
>
> But this will vary from registrar to registrar. Some registrars charge
> nothing over the purchase prices and make their money with add-on services.
> It really depends on the business case.

Agreed, so the data that would need to be collected should come from
the retail consumer-facing registrars (the GoDaddy, Endurance types).
e.g. for Tucows, it wouldn't come from just the info from the
Tucows<-->reseller market, but instead from their reseller channel
(which has all the various hosting providers, SSL, SEO, webdesign, and
so on). I hope ICANN staff (or those on the relevant subteam) are
taking notes, or I can mention this on a future call.

> I do agree that domains that are registered but not used are detrimental to
> the registry if there is someone who wanted to buy and use it but could not.
> But this is based mainly on my experience that the best advertizement for a
> new TLD is publicv use cases. The more a TLD is seen in the wild and used by
> its registrants, the faster it will usually grow, at least in my personal
> observation (for which I have no studies to back that up).

Mine too. [John McCormac of HosterStats.com might have some data, as
he's done much research into usage across TLDs; he's not in this PDP
at present, but should be a familiar name to those following the
comments in various domain industry blogs, etc.]

The case of the .io ccTLD is probably one of the best examples of
this, where it kind of went viral due to the public use cases,
especially for tech companies.

A TLD dominated by defensive registrations is unlikely to ever go
viral like that, to the long-term detriment of that registry. I think
those defensive-registration dominated registries are kind of like the
"cigar-butt" investing approach that famed investor Warren Buffett
started off doing:

https://www.forbes.com/sites/investor/2016/01/19/how-buffett-and-greenblatt-both-moved-on-from-cigar-butt-investing/

where it's a pure value play (i.e. sharp financial calculations as to
how long those defensive TM registrations can be 'milked' over time,
combined with trying to get away with raising prices over time),
rather than the "growth" plays that he moved on to over time. For the
"cigar butt" investors in new gTLD registries, their models and target
markets (i.e. brand owners who don't want to register, but feel
compelled to pay for those unwanted names) are going to be quite
different than the ones trying to grow into household names to compete
with dot-com/net/org and the larger ccTLDs.

My best guess is that the value play (cigar butts) model won't last
(already demonstrably down the 99% as per the title of this thread of
emails), because it'll get even worse if a future round of new TLDs
expands the total TLDs that need defensive coverage. The natural trend
will continue, namely towards shifting budgets to curative rights
protections by brandholders, and making even deeper cuts to the
defensive registration spending. So, if we think of the "mix", the
fraction of spending on sunrises will drop. Also, that overall
spending would be spread across more TLDs, hurting each TLD in the
process, both existing and future, if they relied upon that 'cigar
butt' model. Some spreadsheets of registries or applicants will need
to be revised, again and again (just as ICANN's models have been
redone)! :-)

Thanks Volker.

Sincerely,

George Kirikos
416-588-0269
http://www.leap.com/