[CPWG] Reminder: ACTION/CPWG by Today 23:59 UTC: Comment on Metrics

Sun Sep 27 01:50:15 UTC 2020

Very thoughtful and informative.

So why are we doing another round of New gTLDs?

On Sat, Sep 26, 2020 at 5:23 AM John McCormac <jmcc at hosterstats.com> wrote:

> On 26/09/2020 08:26, Olivier MJ Crépin-Leblond wrote:
>
> >
>
> >
>
> > On 25/09/2020 18:40, John McCormac wrote:
>
> >> A whole industry has developed around reselling previously deleted
>
> >> domain names and many of these drop caught domain names have sold for
>
> >> high prices. A domain name that might cost about $10 to register could
>
> >> resell for $10,000 or more.
>
> >
>
> > Not a great thing for an end user registrant to beef-up prices like
>
> > this. Some would say that this whole "industry" has a taste of "ticket
>
> > tout/scalper". But I guess that's what happens in an unregulated market
>
> > where the scarcity of names made it a seller's market. But now with the
>
> > new gTLDs and the vast variety of choice in other TLDs, are we likely to
>
> > see an end to this phenomenon?
>
>
>
> It is basic supply and demand, Olivier,
>
> The valuable domain names are valuable because they are in well
>
> developed and used TLDs. Their value is very much a function of the
>
> overall development and recognition of the TLD. When the momentum
>
> shifted to ccTLDs, these ccTLDs also became more valuable because people
>
> used them and developed websites on them at a greater rate than before.
>
> In some respects, real estate/property rather than ticket touting is a
>
> better comparison. The price of property in a large city is going to be
>
> higher than the price of property in relatively undeveloped and
>
> unpopulated areas.
>
>
>
> The new gTLDs have a problem with development and with registration
>
> volume. But a problem of a kind of regulatory capture damaged some of
>
> them. In allowing the registries to own registrars, the natural
>
> development of some of the new gTLDs was disrupted. Some of the
>
> registries held back large amounts of what were considered "premium"
>
> domain names. These were typically generic single keyword domain names
>
> and short domain names. It killed the landrush boost (the flurry of new
>
> registrations that occur over the first six months when a new TLD goes
>
> into general availability). That's when people will register domain
>
> names in a new TLD in the hope of either striking it rich or getting a
>
> "good" domain name on which they can build a business.
>
>
>
> The domainers almost completely ignored these new gTLDs as a result and
>
> very few people developed websites on them. In some respects, the
>
> registries were acting like domainers in a mature TLD rather than
>
> registries. Many of these reserved premium domain names were either
>
> deleted or released in a drip-feed manner. With some of these new gTLDs
>
> struggling to get a few thousand (or even hundred) new registrations a
>
> month, the opportunity to grow the TLD was gone.
>
>
>
> Covid has altered the dynamics of the secondary market and the primary
>
> markets for most mainstream TLDs (.COM and the ccTLDs). There was a
>
> boost in some of the ccTLDs earlier this year as people who had lost
>
> their jobs decided to try building online businesses. That was mainly in
>
> the ccTLDs. The Eurid, the.EU ccTLD registry, made a rather poor
>
> decision to discount registrations in Portugal and that massively
>
> inflated the number of Portugese .EU domain names. Most of those will
>
> probaby be deleted next year. Eurid has also been heavily discounting
>
> registrations in an attempt to stave off a natural decline that is
>
> affecting all non-core TLDs. Covid in most countries with strong ccTLDs
>
> is increasing focus on the .ccTLD/.COM axis and registrations on the
>
> other TLDs in those markets has slowed. There was a similar spike on
>
> .COM earlier this year.
>
>
>
> A rule of thumb for the health of a TLD would be to watch the number of
>
> domain names on sale and the number of domain name sales. This is a far
>
> better indicator than the awareness opinion polls used by CCT.
>
>
>
> The .COM sale prices are linked to the US market. That's one where the
>
> local ccTLD has been unable to compete with .COM and .COM has become the
>
> de-facto US ccTLD.
>
>
>
> The new gTLDs have been in decline for the last few months and there is
>
> a massive drop of a few million heavily discounted registrations that
>
> will occur over the next six months.
>
>
>
> The .UK ccTLD has seen a block of deletions of the .uk domain names that
>
> had been "reserved" by large registrars for their clients. The .uk
>
> second level registrations did not really take off and was a management
>
> reaction to the launch of the new gTLDs. Some of the high value
>
> keyword/short .uk domain names are being drop caught and reregistered.
>
>
>
> The ccTLDs with strong local markets and development are likely to see
>
> the secondary market value increase. The .COM might remain relatively
>
> stable as long as the US market does not adopt the .US ccTLD in large
>
> nubmers. (That is something that could occur over a ten year timeframe
>
> as Godaddy is now the .US registry and it has significant market power.)
>
>
>
> Many of the non-portfolio operator new gTLD registries are going to find
>
> the next year or so quite difficult. The portfolio operators may benefit
>
> from having their risk spread over a number of new gTLDs in different
>
> markets. The wildcard is the .WEB gTLD. If it ever manages to launch, it
>
> will take a lot of the optional registration money away from the new
>
> gTLDs and some of the legacy gTLDs.
>
>
>
> The Covid effect on domain name markets, if it continues, is likely to
>
> accelerate the shift to ccTLDs. (More business being local and selling
>
> locally.) That means that some ccTLD domain names will increase in
>
> value. However, ccTLD resale dynamics are quite different to that of
>
> .COM because people identify with their local ccTLD in that it is
>
> "their" TLD. The right of the dot becomes invisible because people
>
> assume that a new website or domain name is in the local ccTLD.
>
>
>
> Based on the statistics, the new gTLDs are not competing with the
>
> .ccTLD/.COM axis in most markets and unless a lot of development and
>
> usage occurs, they are unlikely to compete in terms of secondary market
>
> prices and sales.
>
>
>
> I included a chapter in the Domnomics book on the "all of the good
>
> domain names are taken" fallacy (Chapter 9) along with estimated
>
> regregistration percentages for .COM/NET/ORG over 2004 to 2019. The
>
> scarcity argument only really applies to a very small set of domain
>
> domain names in any TLD. When some of these domain names are sold for
>
> large prices, they make headlines and convince people that there is a
>
> problem with domain names being held back from ordinary registrants. The
>
> vast majority of domain names are registered and will delete without
>
> ever being reregistered.
>
>
>
> Regards...jmcc
>
> --
>
> **********************************************************
>
> John McCormac  *  e-mail: jmcc at hosterstats.com
>
> MC2            *  web: http://www.hosterstats.com/
>
> 22 Viewmount   *  Domain Registrations Statistics
>
> Waterford      *  Domnomics - the business of domain names
>
> Ireland        *  https://amzn.to/2OPtEIO
>
> IE             *  Skype: hosterstats.com
>
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-- 
***********************************
Greg Shatan
President, ISOC-NY
“The Internet is for Everyone”
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