gTLD registrations have peaked. With a rocky road ahead, how long until the crash?

[pfj]

Worrying stats from nTLDstats.com - for the last two weeks, new gTLD registrations have been almost static, and are actually starting to decline. Where previously we saw 10k, 15k, 20k new registrations per day, for a sustained period now registrations have ground to a halt. In the two weeks to date we should have expected to see an increase of almost 350,000 domains, but in fact we've seen a LOSS of 7,644.

This is something that I've expected to see happen for months as the inflated figures of various registries begin to adjust - i.e. the low/no-cost "puff" registrations are dropped. .XYZ tried to combat this earlier in the year with their huge promotional event, but you can only do a bargain basement sale once or twice before people lose confidence.

I see this as a sign that the market has reached saturation. Registries have failed to communicate the real benefits of new TLDs while businesses and individuals are failing to adopt them. The number of active sites using new gTLDs seems to be tiny compared to the number of domains registered. This causes a huge problem for investors as the whole gTLD sector risks becoming contaminated.

Christa Taylor/dotTBA's analysis of the first six months of new gTLD performance on Circle ID brought to light some stark realities: a huge number of registries are operating at a loss, and if registrations continue to fall away, the writing is on the wall for many of these registries. I'm confident that we will see a number of registries cease operations in the next 6 to 12 months.

Total number of gTLD registrations:

July 12th: 22,951,202
July 24th: 22,943,558
Increase/decrease = -7,644 (0.03% decrease)

Even with only a 1.5% increase over the period (which is less than similar periods) we should have seen around 345,000 domains being added, bringing the total to around 23,295,470 so this is a startling difference.

Comparing similar periods from previous months:

June 12th: 22,071,306
June 24th: 22,531,238
Increase/decrease = +459,932 (2.28% increase)

May 12th: 17,513,791
May 24th: 18,016,647
Increase/decrease = +502,856 (2.87% increase)

April 12th: 16,726,767
April 24th: 17,030,054
Increase/decrease: +303,287 (1.81% increase)

Compare Christmas/New Year 2015/2016 (which might be expected to be a quiet period)

December 22nd: 10,987,060
January 3rd: 11,241,742
Increase/decrease = +254,682 (2.31% increase)

Same period last year:

July 12th 2015: 6,570,729
July 24th 2015: 6,676,608
Increase/decrease: +105,879 (1.61% increase)

 

[Jurgen Wolf]

No secrets here... I just avoid .xyz - my stats is without it.

 

[wwwweb]

For example, why would you own greenenergy.com if you could own green.energy. The "com" isn't needed anymore.

You can't own green.energy it is reserved, and if it wasn't it would have a $x,xxx annual renewal.

This is why GTLDs will continue to hinder, so many different companies, so much fine print, there is no real marketplace in the end user space past brand protection for such decencies.

In .com it is all one renewal, and the marketplace sets the premium, not a random registry which all operate with their own terms, and conditions.

 

[wwwweb]

The registrations dropped because it's harder and harder to find good domain names.

The bad ones will be ditched as the domainers become more experienced.

Less suply means an increase in price.

This is exactly what happened with .com

It's actually really easy to find great domain names in the gtld space.

You just need to pay 3-4 figures in annual renewals.

 

[dordomai]

It's actually really easy to find great domain names in the gtld space.

You just need to pay 3-4 figures in annual renewals.

This reminds me of something. It's really easy to sell nGTLDs for $xxxx:

Just buy a premium nGTLD for $xx,xxxx from the registry.

 

[TopShelf Domains]

It is possible people are trimming their portfolios. I really don't think people are dropping their best names.

 

[wwwweb]

It is possible people are trimming their portfolios. I really don't think people are dropping their best names.

If the best name comes with a $1,000 annual renewal, they are cutting them.

 

[dordomai]

If the best name comes with a $1,000 annual renewal, they are cutting them.

Honestly, with 20 million regs, most names can't be premium. Most of what is registered is either protective registration or toilet paper.

 

[wwwweb]

Honestly, with 20 million regs, most names can't be premium. Most of what is registered is either protective registration or toilet paper.

It is no secret disregarding some of the early 2014 releases the premiums have really started being tacked onto the quality keywords.

If domainers are speculating a large majority of them are going to lose money, as they cannot sustain holding, when there is a stagnant aftermarket just based on a lack of education, or most people don't know they is out there.

Regardless of those facts, the person holding the domain has to deal with the burden.

I mean if it takes 5 years to find an end user for a $250 renewal domain, and they get $1,500 after 5 years, they are essentially breaking even, considering transaction fees, and commissions.

 

[Canadian]

2xx nTLD-domains since 2014 without any sales... just 2 low offers for whole period.

Finding domains is the easy part. Selling them is a different story.

 

[Canadian]

Then what will be your income after 2 years x $2K with 2 enduser-sales for $1.5K each (optimistic forecast)?
$1K loss???

I mean if it takes 5 years to find an end user for a $250 renewal domain, and they get $1,500 after 5 years, they are essentially breaking even, considering transaction fees, and commissions.

mathmagicians

 

[Joe N]

@Canadian Have you had a lot of ngTLD sales? Were they to resellers or end users? What methods have you been using?

 

[wwwweb]

@Canadian Have you had a lot of ngTLD sales? Were they to resellers or end users? What methods have you been using?

You can see by his signature he is loaded down with them, monthly renewals eat his bottomline, all heavy hitters in gtlds have the same issues.

Only the registries are the ones laughing, along with ICANN, because that is who this business model is meant to compliment.

5 years down the road might be a different story, but you have to pay 5 years worth of renewals to find out.

 

[Mr Dobalina]

It is no secret disregarding some of the early 2014 releases the premiums have really started being tacked onto the quality keywords.

If domainers are speculating a large majority of them are going to lose money, as they cannot sustain holding, when there is a stagnant aftermarket just based on a lack of education, or most people don't know they is out there.

Regardless of those facts, the person holding the domain has to deal with the burden.

I mean if it takes 5 years to find an end user for a $250 renewal domain, and they get $1,500 after 5 years, they are essentially breaking even, considering transaction fees, and commissions.

This is true and like any business, understanding revenue and expenses is key. It IS possible to make money in the New G's.. in fact, from a margin standpoint I have been more profitable with the new g's than with .com. I am also transitioning some clients into new g's while keeping their .com. obviously nothing is touching .com for a few years but I just don't see a need for the extra letters in the url. We have gotten rid of 'www', now it is time to get rid of 'com.'

rib.tips is a lot cleaner than ribtips.com. (random example so no need to freak out like the green energy example)

 

[Canadian]

@Canadian Have you had a lot of ngTLD sales? Were they to resellers or end users? What methods have you been using?

ZERO Sales..!! I'm a gTLD speculator, I buy, hold and don't do any outbound marketing.
However I have had several half decent offers, which were flattering & exciting as I didn't expect to sell gTLDs for several years. (mostly for .online, but also for .cafe .Jewelry & .Tours)

You can see by his signature he is loaded down with them, monthly renewals eat his bottomline, all heavy hitters in gtlds have the same issues.

Don't You worry about MY bottomline

 

[Fancy.domains]

Maybe we should ask @kohsamui what is his secret.

Buy good ones without high renewals.

 

[Joe N]

ZERO Sales..!! I'm a gTLD speculator, I buy, hold and don't do any outbound marketing.
However I have had several half decent offers, which were flattering & exciting as I didn't expect to sell gTLDs for several years. (mostly for .online, but also for .cafe .Jewelry & .Tours)

You definitely have some quality names. I guess I'm mainly curious what gives you (and other gTLD investors) such confidence in their future value. The general public is more or less unaware of all these extensions, which (at least in my mind) makes it seem like it will be hard to ever market them to end users. And end users are where you would eventually hope to make the big sales.

Has your research led you to some promising signs that this will all turn around within 5 years, or are you going with a gut feeling?

 

[wwwweb]

This is true and like any business, understanding revenue and expenses is key. It IS possible to make money in the New G's.. in fact, from a margin standpoint I have been more profitable with the new g's than with .com. I am also transitioning some clients into new g's while keeping their .com. obviously nothing is touching .com for a few years but I just don't see a need for the extra letters in the url. We have gotten rid of 'www', now it is time to get rid of 'com.'

rib.tips is a lot cleaner than ribtips.com. (random example so no need to freak out like the green energy example)

It was your example no need to freak out, you basically discredited your own statement by using an example that is held back, which it isn't in .com, showing why GTLDs are not yet equal to .com.

 

[Fancy.domains]

I'm currently having a $XXXX one in Escrow. I have sold 21 new gTLDs in 2016, so far. Most in the XXX dollar range.

There is no secret, but you need to work hard and only take the very best ones. Sitting and buying 500 crappy .XYZ, .SCIENCE, .WORK, .TOP etc, just because they have some almost-free-promotion, will not help you out.

 

[Rainmaker-NL]

You can see by his signature he is loaded down with them, monthly renewals eat his bottomline, all heavy hitters in gtlds have the same issues.

Only the registries are the ones laughing, along with ICANN, because that is who this business model is meant to compliment.

5 years down the road might be a different story, but you have to pay 5 years worth of renewals to find out.

Just looking at his signature I would be surpised if he couldnt sell these domains for a good profit after 5 years. Most of the names in his signature make perfect sense.
I would happilly pay $20 a year to renew buyweed.online. After 5 years someone will buy it from him for $500 and he has a 400% profit. And I think 500 is on the conservative side.

 

[Fancy.domains]

All these new gTLDs have caused inflation on the domain market. There are so many options and available names out there. So if you want to sell new gTLDs on the aftermarket, 'decent' or even 'good' are not enough, the names have to be 'very good' or 'great'.

A positive sign is that more and more end-users are using new gTLDs for their websites and projects, but the vast majority of these are hand-regged, not bought from domainers.

 

[Canadian]

Just looking at his signature I would be surpised if he couldnt sell these domains for a good profit after 5 years. Most of the names in his signature make perfect sense.
I would happilly pay $20 a year to renew buyweed.online. After 5 years someone will buy it from him for $500 and he has a 400% profit. And I think 500 is on the conservative side.

I've refused low $xxxx for that domain
Weed will be legalized in Canada next year !

 

[jmcc]

I've refused low $xxxx for that domain
Weed will be legalized in Canada next year !

Can't help but think of the Trailerpark Boys movie.

Regards...jmcc

 

[Canadian]

Can't help but think of the Trailerpark Boys movie.

Legalization will put Ricky, Julian & Bubbles out of business...

 

[Jurgen Wolf]

only take the very best ones

Premiums from Registries???
And how many of such keywords? A few K in each major language... or not???

The real success for any TLD is when even average keyword is able to sell for 4-figure...

 

[Jurgen Wolf]

And I never buy/register the domains when potential endusers are absent... I always do my research...
But again: no serious offers for me (minimum high $xxx).