new gtlds The Potential For Big Jumps in New Extension Prices

Thanks for your contribution @Kate. I agree, partly, with what you say. I totally agree that statistical arguments should rule domain decisions. It is really all about several numbers: cost (acquisition+holding), probability of sale in any one year, and the net selling price. As I have posted multiple times here and in my blog, the evidence suggests that the probability of a sale in any one year is lower in ngTLDs compared to at least com and a few others (at least currently). Certainly the probability of most .rocks domains selling is very low.

The part I disagree with you on, and hope you will let me try to convince you, is the part where you write this: "I know that if I buy a .rocks domain, the likelihood of a sale is nil, regardless of past reported sales." The whole point of my post was to try to move us away from generalizing on one parameter (TLD). Lets say that I had the name music(.)rocks or geology(.Irocks or even space(.)rocks or curling(.)rocks. Do you really say all of those combinations have nil chance of sale?

Let's look at just one, music(.)rocks. It is in my mind clearly way better than the three combinations that sold so far in .rocks. But has music sold in other new extensions? Yes, a number actually.
music(.)agency sold for $6500 (admittedly a very nice combination!)
music(.)land not as good in my mind, but it sold for $6500 as well
music(.)team sold for $2500 (I see it as not as good as rocks or agency)
music(.)audio admittedly a superb combo, sold this year for $15,000 in January
music(.)top is not really that great a combo in my mind, but it sold for $12,861 a few years ago
music(.)dance also makes sense and sold for $435 a number of years ago (a bargain I would say)

I just don't think you can say in any extension, even if it had 0 sales so far, that the likelihood of a sale is nil (I checked and the dictionary does give zero and nonexistent for the meanings of nil). In fact, I would argue there is a reasonable chance that some great combinations, even in rocks or party, have non-zero probability of sale for a reasonable amount (say high $$$ to mid $$$$).

Anyway, my attempt to convince you is over. Thanks for reading, and thanks for your clear writing, even when I don't totally agree with the point you are making!

Just to throw out another example or two.

The extension .bio does not in general get a lot of attention or registrations even. Yes on NameBio over the past three years there have been 45 sales of it, but until earlier this year the highest of those 45 was only $7000 and that was for a single letter i! Then along came the sale of my(.)bio on Sedo for $61,002. It is a great combination - that is what is important, the combination. The sales history of the extension are not the primary thing, it is the sales history (if any) of word combinations of similar commercial value.

Or .tax. I did not even know there was a .tax TLD a year ago I think. It had 4 or 5 sales over a few years. Simple(.)tax is a nice combo and it went for $7500. My(.)tax this year sold on Sedo for $22,500.

Or for that matter Mr(.)glass that sold a couple of days ago for $3000. It was not the highest sale ever, but there were just 3 prior sales in glass. But it is great on several grounds - ideal combo, quite a few potential users some of them highly motivated as a number of different firms use the term.

The ventures extension had a handful of sales under $1000, then the $42,000 blockchain(.)ventures this year.

Or .loan had 0 sales until the great combo auto(.)loan sold for $45,000 on Undeveloped.

I just reread all of your posts and I realize that there was one point you mentioned that I should clarify, @JB Lions I did not mean by dozens of cases that there were dozens of high value sales in any one extension that quickly followed the first big sale, as you interpreted it (and I now see that it could be interpreted that way). What I meant is that in dozens of different extensions there is after not a single high value sale, then suddenly one comes along. I guess I have in the posts here given 11 specific TLD examples (loan, loans, club, online, ventures, tax, bio, glass, rentals, rocks, games) although there are many others (although not as dramatic as these). I do agree that perhaps Jump is not the right word. I agree that we don't yet know whether it will change the landscape and lead to other high value sales or not. I am not so much concerned whether we call it a change, jump, outlier, etc. as that we recognize that it is possible and that a lack of sales does not with certainty preclude high value future sales and that we need to analyze based on multiple parameters.

While separate from the main point of the thread, I did want to respond to this:

bmugford said:

I would say Sleeping.com sold for far higher than I would have expected, however there are many .COM sales for mid $XXX,XXX. So seeing a single word .COM sell for mid $XXX,XXX is not that far outside the norm IMO.

Brad

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At least in NameBio there are 230 .com sales at $500,000 or more (I took this as your mid $XXX,XXX meaning) out of 474,754 .com sales in total, or in other words 1 sale out of every 2064 are at this level. I would consider these outside the norm, but I don't wish to argue about the terminology. I know not all sales are in NameBio, possibly skewing the data.

If we look at ngTLD there are only 5073 sales in NameBio, of which 2 are at >=$500,000 (admittedly just barely at that!). In other words 1 for every 2563 sales, although number statistics with values like 2 are essentially meaningless.

Anyway, I found this interesting and thought I would share it. I don't think there is much of a lesson for domain investors in it except maybe to realize how rare those big sales we envy after are, and how impressive it is when an individual like Kate Buckley has several in one year.

Lotteries are better regulated. This has advantages on both sides, knowledge of future costs and wins are less likely to be clustered, but that isn't a business a business requires something that is repeatable.
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MetBob said:

I know I write at too much length! Sorry (comes from wanting to justify and give assumptions)

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Don't worry about it man. I personally like it as usually your posts are well balanced and a treat to read. Definitely beats the 'millenial' oneliners that get thrown around a lot

MetBob said:

The part I disagree with you on, and hope you will let me try to convince you, is the part where you write this: "I know that if I buy a .rocks domain, the likelihood of a sale is nil, regardless of past reported sales." The whole point of my post was to try to move us away from generalizing on one parameter (TLD). Lets say that I had the name music(.)rocks or geology(.Irocks or even space(.)rocks or curling(.)rocks. Do you really say all of those combinations have nil chance of sale?

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The chances are remote, in addition to statistical probabilities I forgot to mention that I also look at the risk/reward ratio. I can make low $,$$$ sales in .com with no problem, so I don't see the point of taking a bigger risk in nTLDs that are much less in demand, if low $,$$$ is going to be the realistic/maximum target price.

MetBob said:

Let's look at just one, music(.)rocks. It is in my mind clearly way better than the three combinations that sold so far in .rocks. But has music sold in other new extensions? Yes, a number actually
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Two things to consider here:

• premium keywords are often reserved by the registries, or carry a hefty registration and/or renewal fee, so to make a $5K sale you might have to spend $3K (as an example), thus taking a disproportionate risk
  
• domainers always focus on the reported sales, but they ignore the many more domains that have not sold - and most likely never will. In other words: there are hundreds of extensions. Even if a specific keyword has sold in a dozen TLDs, the odds are still stacked against you. At the same time, some extensions obviously fit the keyword better than others.

The problem is that some registries are competing against domainers and that there is no level playing field. The terms for us speculators are not favorable.

MetBob said:

Anyway, my attempt to convince you is over. Thanks for reading, and thanks for your clear writing, even when I don't totally agree with the point you are making!

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Thanks for being persistent though

Kate said:

I can make low $,$$$ sales in .com with no problem

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Thanks for response @Kate . I agree that the wisdom of holding a great name combination depends on how much it cost you and how much it costs you to renew, plus probability of sale and price. @lolwarrior does a great job incorporating these factors in his ngTLD appraisal thread.

Just to make sure your comment does not create unrealistic expectations among new domain investors, important to realize that while there were 69,344 com sales in last 12 months, only 11,394 of them were above $1k. If we estimate that of the approximately 130 million .com registered about 20 million are actively for sale, then this suggests that there will be 1 chance in 1760 of a com listed for sale will sell on a NameBio reporting venue for more than $1k in any one calendar year.

Now admittedly many sales are under privacy or on venues that do not report to NameBio. Even if we assume NameBio only represents 20% of sales, the number would still be something like 1 chance in 350 of any particular com selling for more than $1k in any one year. Of course the similar numbers are even more depressing for ngTLDs. It is important that none of us contribute to unrealistic expectations on how easy it is to be profitable in domain investing, no matter the extension or niche you choose.

If one in 350 is indeed the probability, it suggests you need to average sales prices of about $3500 per sale to break even (the sales below $1k help, so this analysis is over-simplified). I totally accept that some experienced, logical, disciplined, intuitive, educated and hard working domain investors are beating the odds and making money (and congrats if you are one of them!), but we must not give the impression invest in .com and you will do fine (I know you didn't say that, just urging people to not read that meaning into your words). Domain success is not easy.

I am not an artist. Is it possible for me to sell a painting of mine on a nice canvas for hundreds or thousands of dollars? Sure. I could put it on ebay, etsy perhaps and other marketplaces.

Is it worthwhile I do so? Not really, much like domaining, a lot of time would be spent and the chances of a sale are low.

This is the ngtld dillema.

OK I will bite to reply, even though to some degree the discussion has gone from the OP (oh wait, that was me ) idea which was simply saying just because there are no big sales history does not mean that the next sale must be a very low value one, so lets set valuations looking at many different factors.

MarketingStrategies.com said:

This is the ngtld dillema.

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I actually would agree if you took out the ng and just said TLD. The statistics suggest that the majority are not currently successful in making money at domain investing (see a few posts above). Some are. But overall, no, it seems, most are not.

MarketingStrategies.com said:

I am not an artist. Is it possible for me to sell a painting of mine on a nice canvas for hundreds or thousands of dollars? Sure. I could put it on ebay, etsy perhaps and other marketplaces.

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i like your analogy with art actually quite a bit. Why I like ngTLDs (even though statistically the odds favour com and to some degree org/net/co/io and a few other TLDs) is that ngTLD are like my canvas. Through a creative and powerful combination of a term with a good match extension, you can produce something that is aesthetically pleasing and original. It can exactly say something with nothing unrelated to the function tacked on. I find that names like auto.loans, home.loans and vacation.rentals are brilliant because they represent good design and a new way to do something.

Do most works of art sell? No. Will the majority of ngTLDs sell. Definitely no. Does this stop people from painting? No.

A zillion domainers are each day searching for values in drops/expired/auction com and trying another go at selling the domain for profit. I am totally happy that so many people are keeping that market going. On NPs I congratulate them on successful sales, and I am genuinely happy for them. They fill a clear business demand. They help companies build strong brands. A few make good money. Many have incredible technical and negotiation skills, and the confidence that I do not have. I don't argue with them that they should do something new. I respect their choice. But that is not what I want to do.

Will I ever sell a home.loans? No. But from gritty.win to cozy.science, from tweets.today to blockchained.trade, from voila.fun to prospecting.space, I take pleasure in domain phrases that I created. Will they sell? A few yes, majority, not. I plan to keep painting, amateur that I am.

I suspect we will never agree, but thank you for your contribution to the discussion, and have a nice day. Thanks for helping me see that I am Bob the artist as well as Bob the analyst!

Bob
aka ngTLD artist

MetBob said:

... a great match is worth, at least retail, something in the $$$$ range.

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I agree $xxxx is fair market retail value for the subject name. At the same time, if I see it dumped no reserve on NP or ebay aka wholesale, a $x sale won’t surprise me, nor will it tempt me but that’s a different story. The wide blurry bid-ask spread of domains rubs some the wrong way especially when talking about the low end but the opportunity to exploit it is the reason most of us are here.

I noticed that the top sale in today's NameBio report is another case of a com with a high value sale without a history of any sales at all in the term. The name fasting in com sold for $50,000 at Sedo. If you search the NameBio database there are zero private sales for any name including 'fasting' - i.e. not only no exact word sales, no words at all like FastingDiet or anything (also none in GV comparators). Just shows that predicting domain prices must depend on more than NameBio history of sales - e.g. fasting does produce 38 million Google results and a huge number of books and articles on the topic. Perhaps I should have made the title something more general, since as others have pointed out these also happen in country code.

MetBob said:

I noticed that the top sale in today's NameBio report is another case of a com with a high value sale without a history of any sales at all in the term. The name fasting in com sold for $50,000 at Sedo. If you search the NameBio database there are zero private sales for any name including 'fasting' - i.e. not only no exact word sales, no words at all like FastingDiet or anything (also none in GV comparators). Just shows that predicting domain prices must depend on more than NameBio history of sales - e.g. fasting does produce 38 million Google results and a huge number of books and articles on the topic. Perhaps I should have made the title something more general, since as others have pointed out these also happen in country code.

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Comparing single word .COM to sales in new extensions is apples to oranges. Single word .COM have a long track record of putting up consistent 5,6,7 figures sales.

Brad

It is really very simple most businesses need to be in .com / ccTLD because almost all their competitors are there and most of their potential customers expect them to be there too. We may personally see value elsewhere but the market will remain thinly traded until that perception changes, all ICANN's new gTLD program has done is reinforce that perception in the market.

ICANN employed a professor from the Chicago School to produce a report which was fundamentally flawed because it said entry would create competition, but when it was pointed out to them that domains aren't substitutable, ICANN ignored it. ICANN got to take 100s of $millions out the system so maybe they didn't need to care about building a better system, but the design of the current new gTLD system is so seriously flawed that it is very unlikely, unless perhaps there is a disruptive event, that there will ever be much end user value.

Don't get me wrong they're great for art projects and collectors but for the majority they hold little benefit and that means a thinly traded market. Most people looking to invest in domains would think fasting.com was worth owning. the only other exact match name of interest for my company other than fasting.com would be fasting.info but only a few others here think the same way. Which is great if you want to buy a .info but not so great if you want to sell one

bmugford said:

Comparing single word .COM to sales in new extensions is apples to oranges. Single word .COM have a long track record of putting up consistent 5,6,7 figures sales.

Brad

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Hi Brad,

Sorry to be unclear. I was not meaning to compare a com to a ngTLD. What I was comparing was a subject without a sales history (fasting) to an extension without a sales history. They are clearly not the same thing, but both suggest you have to dig deeper to appraise (I would argue). And in both cases while lack of past major sales may suggest future ones are unlikely, they do not make that assumption a certainty.

I do realize and agree the track record of high sales is much larger in com than anything else. e.g.

2018 YTD NameBio
92 sales of com >= $50k (the size of the sale being discussed)
11 sales of ngTLDs >= $50k

Bob

Thanks @gpmgroup for the interesting history re ICANN and the research report. I must look into that and read it.

gpmgroup said:

Most people looking to invest in domains would think fasting.com was worth owning. the only other exact match name of interest for my company other than fasting.com would be fasting.info but only a few others here think the same way.

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So far I agree that most domain owners and brokers think exactly as you describe. Whether that will change for end users, is I think, at least a crack open. Re fasting in specific, I would think that the diet extension would have possible interest to some in the space. I guess we will see as I notice it is up for sale currently on Sedo.

Thanks again for the historical background. Chicago has a great behavioural economics group so the report will be interesting reading.

Fasting.diet doesn’t really work for a number of reasons but primarily because it’s too cluttered for most purposes, with perhaps the exception of a very small niche exact match and then the dot is in the wrong place as it interrupts the expression and makes it more akin to a domain hack which rarely become mainstream.

gpmgroup said:

?.. and then the dot is in the wrong place as it interrupts the expression and makes it more akin to a domain hack which rarely become mainstream.

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Admit you are not alone in thinking that way but it seems to me that replacing spaces between words with dots is both aesthetically pleasing and natural. Works particularly well in Twitter where that is all you need to do to make it an active web link. I'm not nearly as much a fan of hacks as splitting words seems less pleasing to me.

With Apple starting this week their marketing of the new iPhone models with the domain phrase Experience.Apple it will at least get a marketing test.

https://domaininvesting.com/apple-marketing-new-iphones-on-a-apple-domain-name/

I think you're right it will be interesting to see what happens with experience.apple fasting.diet is sooo niche I don't see much value. In a more general way Sony tried make.believe back in 2009 before new gTLDs.