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)

 

[Bram C.]

Sorry, forgot that. Just added it.

Thanks for the info! So based on that data you spent around $8-9K and made around $20K (in one year). So basically a decent $11K-12K profit with the new gTLDs in one year. So I would say you're one of the few domainers who is making a nice profit with selling gTLDs. And I think this is impressive.

In my case, I have invested in some decent gTLDs as well (not 400 like you, around 20 or so) but I have a different experience with them compared to you. I also tried to find gTLDs with good keywords that make sense and without a premium price tag (my average purchase price is around $30-$40/TLD) but apart from 2 lowball offers ($XX range) I got zero interest in any of them in the last 2 years. I already dropped a few and kept 12 of them. Around 97% of my portfolio is .com though and that's where I'm making my money from and what's allowing me to do domaining full-time.

Going back to the profits you made this year with the new TLDs: An average profit of $11.5K per year comes down to less than $1K profit per month though. For me personally $1K profit a month wouldn't definitely not be enough to live (for someone doing this full-time).

 

[Fancy.domains]

Going back to the profits you made this year with the new TLDs: An average profit of $11.5K per year comes down to less than $1K profit per month though. For me personally $1K profit a month wouldn't definitely not be enough to live (for someone doing this full-time).

Yes, true.

Fortunately, one of my favorite domain investment is .COM. I also make some passive income from my travel websites and have a hard working wife.

 

[carob]

If it is Verisign... How are they going to recover $135m? Let's say their wholesale pricing is $6 (slightly less than the $7.85 for .com) and registrars sell for $12. That's 22.5m domains (or pretty much the entire inventory of registered new TLDs so far) that they need to sell. Maybe they can do that in 5 years. Allowing for drops, they probably need to sell 5m domains a year. If anyone can, Verisign can. Maybe they will offer all .com owners the matching .web - like .uk did with .co.uk owners. I guess if only 10% of .com owners defensively register the matching .web domain then BOOM they've shifted 10m+.

So far the takeup of the .uk domains reserved for .co.uk owners has not been good. You have to pay, though in some cases first year has been offered cheap or free.

.mobi went bust and one reason might have been assuming or hoping they would get all .com owners to take .mobi as well - they just did not have enough income from registrations to cover costs, and the big name company investors did not want to put in more money.

 

[dordomai]

Going back to the profits you made this year with the new TLDs: An average profit of $11.5K per year comes down to less than $1K profit per month though. For me personally $1K profit a month wouldn't definitely not be enough to live (for someone doing this full-time).

Kohsamui is probably one of the most successful nGTLD domainers in the forum. This highlights how hard it is to make money with domains in particular nGTLD domains.

 

[Bram C.]

Kohsamui is probably one of the most successful nGTLD domainers in the forum. This highlights how hard it is to make money with domains in particular nGTLD domains.

Indeed. I believe investing exclusively in new gTLDs is not a viable business model. At least not when you're domaining full-time. But as Kohsamui mentioned he also invests in and sells .COM domains, makes some additional passive income from his travel websites and his wife has an income as well.

 

[Micklepickle]

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

Nationwide. The supply/distribution channels are developing nicely. Great domain.

 

[RU]

2016-08-03: Domains: 23,098,746

 

[CJ6]

As Wine.Club is up for $349,977 , I decided to put up my eWine.Club to €188,800...lol.....I am greedy now....why not!
I know its not going to sell soon anyway, so I will keep it for few years, renewal fees only $12+ per year....

I know I'm several weeks late. Maybe I should put my wines/group up for a fortune, as well.

 

[pfj]

2016-08-03: Domains: 23,098,746

July 12th - August 3rd (22 days) = 147,544 domains added - an average of 6,706 per day.

 

[theSun]

Very soon. Before 1/1/2017. Then 5L .coms chips will shoot up.

 

[pfj]

Very soon. Before 1/1/2017. Then 5L .coms chips will shoot up.

You apparently hold a significant number of new gTLD domains though - have you become disillusioned with them?

 

[brandnow]

I dumped most of my ngtlds already. except the few that I am developing.

 

[Fancy.domains]

The future looks bright. I sold a few more n gTLDs lately and bought seven LLLL .com names for the money. I will now sell these and invest in more new gTLDs.

 

[garptrader]

Millions of high school athletes spend hours playing basketball aspiring to be the next Lebron James who I believe recently signed a contract of more than $100 million. Only one in ten thousand high school basketball players (who are the best in their community) make it to the NBA and NBA careers only last a few years on average.

The Lebron James of new TLDs makes barely $1000/month off an entire portfolio and yet in developed countries you cannot live off $1000/month - rent for an apartment is normally more than that. The vast majority of domain investors even in alternative TLDs like .Net would do best to do something other than domaining.

 

[Fancy.domains]

The Lebron James of new TLDs makes barely $1000/month off an entire portfolio and yet in developed countries you cannot live off $1000/month - rent for an apartment is normally more than that. The vast majority of domain investors even in alternative TLDs like .Net would do best to do something other than domaining.

If this is towards me, thanks, or whatever.

No, I am not making barely $1000/month. It's just something you guys have come up with after I stated how many new gTLDs I've sold. Yesterday I sold two new GTLDs and a .SE. I have one new enquiry today.

You don't have to be worried about my economy. I'm doing fine. Just bought new watches for myself and my wife + new gym membership at the best gym on the island plus seven new LLLL.com names. Ok, as you understand, I am not rich, but I am making far more than a thousand bucks a month. You are not even allowed to have a work visa here with that income.

 

[Bram C.]

What you said now:

If this is towards me, thanks, or whatever.

No, I am not making barely $1000/month. It's just something you guys have come up with after I stated how many new gTLDs I've sold. Yesterday I sold two new GTLDs and a .SE. I have one new enquiry today.

First of all, nobody is claiming here you're only making $1K/month in total (since you already stated you have many other income sources). @garptrader was talking about what you are making with the new gTLDs, ignoring all your other non-gTLD related income.

This is what you said 3 weeks ago in reply to my calculation:

Going back to the profits you made this year with the new TLDs: An average profit of $11.5K per year comes down to less than $1K profit per month though. For me personally $1K profit a month wouldn't definitely not be enough to live (for someone doing this full-time).

Yes, true.

Fortunately, one of my favorite domain investment is .COM. I also make some passive income from my travel websites and have a hard working wife.

Somehow I see a discrepancy here. Three weeks ago you agree to my calculation that you only make $1K/month on average with the new gTLDs (that was based on public data you made available) and now suddenly you claim you make more. Or maybe you're not claiming that and you're simply saying that your total income is more than $1K/month but I think everyone already knows that.

Btw, 3 weeks ago you didn't just state how much TLDs you sold in a one-year period, you also stated that those sales account for 10% of your total portfolio (so you have around 400 gTLDs), and you stated the average acquisition price of those and the average selling price of the domains you sold. Enough data to make a reliable calculation of your actual profits with the new gTLDs (I didn't even assume any commissions for those sales and didn't factor in the time you spent on acquiring any of these gTLD domains).

Here's what we can calculate based on what you told us:

--> You said you sold 40 gTLDs in the last 12 months at an average price around mid XXX. So that's 40 (sold domains) X $500 USD (per sold domain on average) = $20,000 (ignoring commissions and time spent). If we were to assume an average commission of 15% this number would only be around $17,000 USD. But like I said I'll ignore commissions and assume you made the full $20K.

--> You said that those 40 sales account for 10% of your portfolio so in other words you have or had around 400 gTLDs.

--> You said your average purchase price of a gtld is $20-22 per name. So that's 400 (acquired gTLDs) X $21 (average price per acquired gTLD) = $8,400.

So $20,000 (total income in one year from gTLDs) - $8,400 (Total acquisition costs, ignoring money you spent on any gTLD renewals) = $11,600 USD profit in one year or $967/month, on average.

 

[Fancy.domains]

People were suggesting that I barely made it here economically. I told them that that's not true.

New gTLDs is a part of my income, but an increasing one. Let's drop it now.

 

[Rainmaker-NL]

What you said now:


First of all, nobody is claiming here you're only making $1K/month in total (since you already stated you have many other income sources). @garptrader was talking about what you are making with the new gTLDs, ignoring all your other non-gTLD related income.

This is what you said 3 weeks ago in reply to my calculation:





Somehow I see a discrepancy here. Three weeks ago you agree to my calculation that you only make $1K/month on average with the new gTLDs (that was based on public data you made available) and now suddenly you claim you make more. Or maybe you're not claiming that and you're simply saying that your total income is more than $1K/month but I think everyone already knows that.

Btw, 3 weeks ago you didn't just state how much TLDs you sold in a one-year period, you also stated that those sales account for 10% of your total portfolio (so you have around 400 gTLDs), and you stated the average acquisition price of those and the average selling price of the domains you sold. Enough data to make a reliable calculation of your actual profits with the new gTLDs (I didn't even assume any commissions for those sales and didn't factor in the time you spent on acquiring any of these gTLD domains).

Here's what we can calculate based on what you told us:

--> You said you sold 40 gTLDs in the last 12 months at an average price around mid XXX. So that's 40 (sold domains) X $500 USD (per sold domain on average) = $20,000 (ignoring commissions and time spent). If we were to assume an average commission of 15% this number would only be around $17,000 USD. But like I said I'll ignore commissions and assume you made the full $20K.

--> You said that those 40 sales account for 10% of your portfolio so in other words you have or had around 400 gTLDs.

--> You said your average purchase price of a gtld is $20-22 per name. So that's 400 (acquired gTLDs) X $21 (average price per acquired gTLD) = $8,400.

So $20,000 (total income in one year from gTLDs) - $8,400 (Total acquisition costs, ignoring money you spent on any gTLD renewals) = $11,600 USD profit in one year or $967/month, on average.

Maybe you'd better invest your time in analyzing the stock market. That could make you some money. Analyzing Samui's income seems a complete waste of time to me.....

 

[Bram C.]

People were suggesting that I barely made it here economically. I told them that that's not true.

New gTLDs is a part of my income, but an increasing one. Let's drop it now.

I'm not sure who said that you barely made it here economically (didn't see anyone claim that). I thought they specifically said "regarding new gTLDs". But maybe I missed it.

Anyways, I'm all for dropping it. I hope your gTLD income continues to increase for you.

 

[Bram C.]

Maybe you'd better invest your time in analyzing the stock market. That could make you some money. Analyzing Samui's income seems a complete waste of time to me.....

I analyzed it because I wanted to get an idea how much one of the more successful gTLD investors is making with the new gTLDs. Sounded like useful info to me.

 

[Fancy.domains]

Maybe you'd better invest your time in analyzing the stock market. That could make you some money. Analyzing Samui's income seems a complete waste of time to me.....

Yeah, maybe you guys are even more transparent and want to share your income, dollar by dollar?

 

[garptrader]

Anyone who is generating positive cash flow off new TLDs is exceptional. They would probably do well selling cars, real estate, jewelry or web development / SEO services. Despite the industry hype of reported sales, alternative TLDs have a poor record for most investors. In ten years, I have only seen a handful of sales over $1500 and yet only one of those was for an undeveloped alternative TLD. So when I see reports of five-figure new TLD sales I am skeptical.

Since new TLDs were launched, afternarket sales have plummeted along with pricing. New TLDs have stolen market share as domain investors are the biggest buyers of domain names and what to domain investors seek? - good keywords at cheap prices. Of course, low-budget developers also now have a myriad of cheap alternatives rather than buying an $XXX aftermarket domain. Even for aged .COMs it seems the only offers I am getting are $50-$150. If the aftermarket for .COMs has changed so radically, then what are the odds of making a living in this industry? How many domain investors who started in the last five years are doing so well off domain name investments that they are able to buy a South Florida beach condo or new sportscar? I doubt there are many.

 

[jmcc]

So when I see reports of five-figure new TLD sales I am skeptical.

When I see high sale prices for domains in a new gTLD with only a few hundred active sites, it is very hard not to be cynical having seen this kind of activity before.

Regards...jmcc

 

[GoKaizen]

.CLICK has had 40k drops in 3 months.

 

[dordomai]

i think the worst drops have still to happen. we are now approaching the time when we had the Chinese bubble starting last year. Expect massive drops in .com and all other extensions.