Donuts model - A sucker born every day(?)... If I were a share holder...

Yong1 · May 22, 2017

My partner was trying to broker some premium new gTLD names and shared the following points with them. Here is more or less what he had to say and the answer he got from Donuts...

1. As you know its hard enough to make high end sales, and more so for non .com's.
2. The feedback I've been getting back time after time is that the renewal kills it for the potential client.
.A one time expense is just different compared to an ongoing expense.

3.Once a company manages to get a budget for a one time purchase and after convincing them of the branding aspect of the domain, they get stuck with the renewals and the deals just dont happen.
I get answers like : "So yes its an interesting idea for a brand name.. We are willing to try it and even pay for it.. But you are getting to greedy.. We cant justify this.. we are wiling to spend a one time but not for renewals at such a price... Com renewals are much cheaper. Who will guarantee they wont up the prices later again?"

I try hard not to mention the Uniregistry fiasco and the fact that those high existing renewal prices can actually change over time either way, with minimal supervision or cap contrary to .com and .net.

4. The potnetial buyers dont understand the different models or difference between Registry and Registrar and they put us all in the same group too

5. I do also believe that high end sales will give the new gTLD extensions more validity and visibility.. and will also help drive the aftermarket too and will give credibility for your extensions long term..

My question is whether you have any plans to reduce renewal rates of premium new gTLD domains? I had seen that some registries have decided to take a model of one time high registration price and later on normal renewal rates. They applied it retro too. Some dont, and it just makes it a very hard sell.

The answer my partner got was that they dont plan on changing their model.
Donuts has modeled the pricing with extensive research into maintaining a consistent revenue model, rather than higher up front and lower renewals.

So they seem to be running for short term and not long term.

They also basically dont want any trading to happen with their top names.

They wait for buyers of those names to drop them and then sell them at a high price again to another sucker. Just like .xxx does...

If I were a shareholder... i would be worried.

They are basically looking to find new suckers each time..Let them buy, renew at high levels and if not then possibly make sure to reserve them once they drop them and sell them to another sucker...

biggie · May 22, 2017

so, were these names really premium or just premium priced?

imo...

Yong1 · May 22, 2017

They were premium names with renewal rates of $600+

The aftermarket is dead for new gTLD's. Having them keep high renewals compared to .coms is just killing it. They are really only looking short term.

Do not buy Donut domains... not such a bad pun(?) after all...

Kostas · May 22, 2017

Yong1 said:
So they seem to be running for short term and not long term.

That line contradicts the one above, when they charge higher renewals instead of a bigger upfront price (say 10 or 15 years the renewal) it's obvious that they are looking at this long term.

Although, regular renewals is a must in order to grow. Having the ability to erase the premium renewal(maybe by paying some years of premium registration) would be something much needed and it would actually increase their registration numbers. But we are not in a position to judge if this would benefit them long term, they have the data so they are the ones that know what's best for their business.

And the truth is that Donuts is BY FAR the most fair registry when it comes to the value you get when you register a premium domain vs what other registries have to offer for the same price. A lot more opportunities in Donuts owned extensions for domainers than in any other registry.

Yong1 · May 22, 2017

Kostas said:
That line contradicts the one above, when they charge higher renewals instead of a bigger upfront price (say 10 or 15 years the renewal) it's obvious that they are looking at this long term.]

Actually they charged very high registration prices and high renewal rates... Like $7000 for registration of name( i think it was during their landrush stage) and continued with high renewals like $600+

Recons.Com · May 22, 2017

That should be easy to remember:

Do not buy Donut!

Kostas · May 22, 2017

@Yong1
They do this only in EAP (early access program) and it only applies to seven days before GA (general availability). When a tld launches it is needed to have something like this in place. Donuts has released plenty of great domains with $xx renewals. You must charge something upfront in such cases. If a name has a $600+ renewal and it's not an absolute killer chances are it will be available in GA.

Kate · May 22, 2017

Yong1 said:
If I were a shareholder... i would be worried.

But maybe being a shareholder is actually the best way to cash in on new extensions...

Internet.Domains · May 22, 2017

Donuts is about the only company that could single-handedly change the trajectory of the New G's, and they don't want to change their model?

Jurgen Wolf · May 22, 2017

Top or not top name, regular fee or premium - result will be the same: ZERO (no sales)... in ~99% of cases.
If we are talking about serious sales, no less than $1K.

Jurgen Wolf · May 22, 2017

p.s. In ~2020 we will see another portion of unnecessary TLDs for dreaming domainers and for poor endusers...

wot · May 23, 2017

And ngtld continue their descent to the bottom of the ocean to lay alongside the chained up lawyers.

Silentptnr · May 23, 2017

I can tell you as a business owner that if I had $1 for every "idea" I get, I wouldn't need to have a business any more.

For the most part, I don't buy super premium ngTLD domains. The numbers just don't work for me. I never thought the pricing model they employ would equal more sales, more visibility, etc.

I will say however, I don't know how they run their business or what they have planned for the future. I hope they have the staying power to be around for years to come.

Just sounds like they don't want domain investors or wholesalers buying up all their domains at lower prices/renewals. They rather hold out for great prices. I know domainers that are that way too.

dordomai · May 23, 2017

donuts are more stable, trustworthy and cheaper than many others. probably one of the better registries from an investment perspective. that does not change the fact that they are acting as domainers themselves. they make the rules and you can compete against them only if they let you.

ask yourself why would they?

biggie · May 23, 2017

"donuts are domainers".... and anybody who buys from their "premium lists", pays end-user prices.

they and others, paid for the rights to "create .inventory" and resell it.

to buy or not to buy, remains your prerogative.

imo....

urlurl · May 23, 2017

The whole point for the new extensions where to give an alternative option to end users (directly) - the model is built to keep middle men/resellers out so i don't know why domainers complaining - its not to benefit you... easy thing to do, is to just stay clear.

and it makes 100% sense for the registeres to keep the prices high for low volume extensions and lower prices to higher volume extension - its all a numbers game

this is for the registries to make money, its a business - simple as that

Yong1 · May 23, 2017

They aint going to make money long term that way...
Rightside got it right and changed their pricing model.

Businesses wont buy those names for such high renewals, and so eventually they will need to sell them for much lower once their shareholders get fed up.
They are hurting themselves...

urlurl · May 23, 2017

if they charge $600 a year per name renewal and they only have 10,000 - that's $6,000,000 per year revenue

or they could have renewals for $6/y and they would have to get 1,000,000 users to make the same amount

since there are only so many end users with a multitude of alternatives - my money would be on the first option rather than the second.

Chris Hydrick · May 23, 2017

urlurl said:
if they charge $600 a year per name renewal and they only have 10,000 - that's $6,000,000 per year revenue

or they could have renewals for $6/y and they would have to get 1,000,000 users to make the same amount

Nice way of putting it.

The issue I see with this model is TLD exposure. ie If they had 1,000,000 users, there is inherent value for TLD awareness. How many domainers can name new TLDs with only 10k regs vs TLDs with 1MIL+ regs? I know it differs by what's developed on these new TLDs and what companies spend the money promoting their new developed TLD, but the principle is still the same.

Since companies are already taking a leap of faith operating with a new TLD and paying out of pocket to market / provide TLD awareness, why the need to charge so much? Maybe, like you were saying, there are only X amount of buyers and the registry needs to make Y to cover operating expenses / profit.

Donuts model - A sucker born every day(?)... If I were a share holder...

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