[CPWG] ICANN Org Commissioned Economic Studies related to the gTLD marketplace (2008-2017)

[John McCormac]

On 29/05/2023 14:50, Chantelle Doerksen via CPWG wrote:
> Dear all,
> 
> Attached is a list of previous economic studies commissioned by ICANN 
> org that might be of interest to the CPWG.
> 
> A related 2015 study authored by the UCSD Dept of Computer Science that 
> might also be of interest:/From .academy to .zone: An Analysis of the 
> New TLD Land Rush 
> <https://conferences2.sigcomm.org/imc/2015/papers/p381.pdf>./

Thanks for those reports, Chantelle,
It saves a lot of searching and they are interesting reading.

The last paper, the USCD one, is a very good attempt at understanding 
web usage.

The MEAC and LAC papers provide fascinating overviews of the DNS markets 
in those regions as they were then but the web usage sections of both 
are best ignored as they are inaccurate.

It has been suggested by Christopher Wilkinson, Michael Palage and a few 
others in the Zoom meetings that ICANN should have its own economics 
department. This is a very good idea because the market moves too 
quickly for non-specialist economists to track or understand within the 
short period of generating a report.

What bothers me about ICANN's periodic studies is that the domain name 
market evolves and these studies are just snapshots of the market at a 
particular time. The 2023 market, for example is very different to the 
2016 or 2017 markets. At the moment, it is coming out of the Covid 
Bubble and the .COM, and many other TLDs have been losing 2021 and 2022 
registrations.

The 2012 new gTLD round was partially a response to Domain Tasting (it 
created a shortage of deleteing "good" domain names) of 2005 to 2009 
which created an artificial demand for domain names. Despite all those 
claims about the new gTLDs having 15 million or so registrations in the 
first year, it didn't happen because ICANN wasn't looking when the 
market changed.

When ICANN introduced the transaction fee, it changed the business model 
of tasting from being one with no real costs to one with a cost. Google 
also stopped monetising domain names in the 5 day Add Grace Period. A 
number of the registrars heavily involved in Domain Tasting were also 
sued by victims. When large-scale Domain Tasting was ended, some of the 
demand for the new gTLDs disappeared with it.

Any economist trying to understand the last ten years of what happened 
in the new gTLDs is likely to be astonished. At the moment, there are 
gTLDs that almost completely disappear and reappear within little over a 
year. Over 80% of domain names some gTLD zones from this month last year 
are not in the current zones. This is the infamous Bulk Registrations 
problem playing out but it also is due to discounting and gTLD markets 
splitting in two (an older, mainly brand protection and developed 
websites, market and new market of often discounted registrations which 
may be deleted rather than developed).

The African DNS study (2016) is interesting but its method of measuring 
web usage is not reliable. The one thing that seems apparent from is 
that the African DNS market has almost leapfrogged the traditional 
Desktop -> Laptop -> Mobile evolution and gone more to the Laptop -> 
Mobile kind of market due to the infrastructure situation. That's going 
to be a major issue for any new gTLDs in the next round that are 
targeting the markets in Africa (it is not a single large market as it 
has many country level markets) and even markets elsewhere.  It will be 
interesting to see how the African DNS market has changed since 2016.

Regards...jmcc
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