Labeled as news in Domain Industry News started by Bob Hawkes, Nov 2, 2018.
Frank putting the pinch on you early lol. He has to cover the increase he faces
It is a comprehensive and accurate list @namemarket. Thank you. I think for the reasons you cite it is, and will continue to be, very challenging for many to even break even. One of the things that bothered me most in the Verisign blog, beyond the insensitive wording, is the implication that large prices are the norm and domain investor ROI are routinely high.
When I tried to see if the industry overall is profitable, 5 of my 7 models suggested it is not even break even. It is true that my "most likely" one did have about 30% ROI ratio, but that is not taking into account any interest costs on invested money or the return for risk that @Kate mentioned earlier in this thread in her superbly written post.
Thanks again and what you say is something, unfortunately, that all of us in the industry should seriously consider. The conditions are getting worse, as you indicate.
Indeed, around 90% of domainers left domaining business within their first 3 years.
That actually seems to be true since Frank and his companies own vast numbers of domains (thought to number jn the 100s of 1000s) so a Uniregistry 25% price increase would in-effect cover a 28% increase in his costs. The rich tend to get richer or stay rich but others stay or get poor.
Many of us complain about Verisign all the time, individually and through ICA. Some of our rhetoric, although right, turned quite spiteful. This was most likely a human reaction to that. However, it cannot stand as an official position of the company because it is suicidal.
The intent expressed in the blog is pretty clear: they want to get rid of pricing controls, and perhaps run the registry more like they used to with .tv. Or have more leeway like the nTLD registries.
But as Brad @bmugford mentioned there is a fundamental difference: they do not own the .com/.net registry, they are caretakers.
I am not sure if it is @GeorgeK who mentioned it, toll-free numbers cost less than $1/year. The database of toll-free numbers is quite similar to a domain registry by some aspects. The SMS800 system has registrars, that are called RespOrgs and offer numbers to consumers either directly or through resellers. It also suffers from the warehousing of phone numbers (against FCC rules) and a rather opaque system of ownership. If you have ever tried to get a 800 number, especially vanity numbers - you know what I mean. Yup they are all taken, hoarded whatever. Some fuzzy pricing practices going on too in this arcane universe.
Running a registry is a bit more than administering a database though. It has to be super-resilient and DDOS-resistant. The investments required in infrastructure and organization are not trivial. We are talking about critical Internet infrastructure and a huge responsibility. There has to be a reward for it.
But the margins recorded by VRSN speak for themselves. They also run smaller registries (.net .cc etc) plus two DNS roots. So they are able to achieve economies of scale.
And when they raise prices, they don't have to face the wrath of registrants. It is up to the registrars to announce the bad news and pass the fees on to their customers. Registrants don't even know what the registry is.
Maybe as a PR exercise VRSN could tell their customers what do they get in return for the price hikes or what is the justification, other than making shareholders happy ?
Agreed, definitely high on emotion and low on logic in her blog post.
The thing I want to really study from the blog post is: how exactly do we define "speculation" versus "investing" and "commodities".
Who gets to decide? If you label someone a "scalper" and a "speculator" in your blog, is this incorrect and if so, why?
And if it's incorrect - what are the implications for you as the Registry? Are you fit to run the Registry? Have you damaged other parties? What would Vestager think about it in Europe?
(LowOnLogic.com - I like that :D)
If they dont want the business of domainers, i guess they may get what they're asking for.
If the price increase goes into effect, i suppose there will be a massive drop of com domains.
Guess a lot of domainers will be seeking to get rid off at least all the weaker domains in their portfolios
In most cases domaining is a business that is very easy to enter, but also VERY EASY to leave.
You have hit on important aspects. Here are my top of head thoughts....
A domain investor holds but has for sale a domain name at a price which can be supported by looking at measures such as prior sales, the value to the potential end user, and perhaps the costs (acquisition, holding and risk related costs). A domain speculator would more likely either ask an unreasonable price, or just be sitting on the asset. By my definition it is possible that the same person with some domains could be one and with some the other.
A domain investor also plays a role, in the way that a mutual fund or EFT or stock investor does, in the feasibility of the overall domain economy. As many have correctly pointed out, Verisign has hugely benefitted from domain investment/speculation and continues to do so, making this post surprising. In the ngTLD space I think it is fair to say that some struggling registries depend critically on domain investors to get through the early stages. In my opinion when/if ngTLDs become more popular it would be totally appropriate that the investors benefit since they have taken risk in holding them now. In the country code space domain investment helps make the numbers more reasonable so that end users benefit from the per domain savings that result.
As I interpret the second part of your post, it is asking what the role of the registry is (or should be). They clearly are through the post wanting to promote themselves, inaccurately I would say, as champions of end users. There has been discussion re what really is Verisign role - are they simply providing registration related services, or do they 'own' the TLD space in some more fundamental way.
I understand there are historical reasons, but with .com so much the WORLD's premiere TLD, it seems odd to me that the US Government controls what happens to it, I realize along with ICANN.
Thanks again for the valuable contribution, @domainer111.
Well..She updated her LinkedIn Profile!!
Glad the profile was updated with that clarification.
I only checked two, but someone should tell Sedo then:
But in my opinion it is not so much whether the author deals in domain names, but rather that there are misleading statements in the blog post itself.
Yes pile of junk....
If the price goes up for a .com I will trim 2-300 names in a hurry. This email may be posted earlier, but thought I would put it up...hope the links transfer.
Dear Above.com Client,
Sometime before 30 November 2018, the price of .COM domains may go up when the NTIA's "price-cap" agreement with Verisign, called the "Cooperative Agreement,” expires! You, the owners of .com domain names, stand to lose hundreds of millions of dollars collectively if that price increase goes into effect. But you also have the power to do something about it! Demand that ICANN and the NTIA take action NOW to stop a potential price increase on .COM domains and keep their pricing reasonable!
With just a few clicks, make your voice heard and sign a petition started by the Internet Commerce Association directed at David Redl of NTIA and Göran Marby of ICANN.
This is what we need you to do:
Sign the Petition
Share the Petition on Social Media
Verisign has vast funds to help them lobby the Congress for the price increase. We have you, the domain name owner, to help us stop it! Please help us and share the petition and website on your social media, blogs and online publications.
The big new jump by Uniregistry does NOT include the already approved 28% future Verisign increase meaning my Oct 2018 price was $8.67 up to $10.88 Nov 2018 and then going all,the way up to nearly $14 or possibly more during the next several years!
That is real significant unless you have a small number of names or manage to sell some of your domains for small fortunes like Rick Schwartz does, so then why care about 53% more reg fees, which may be one of the reasons Rick said on Ricksblog he is very supportive and very happy about Verisign increases.
Well she isn't developing so maybe we can call her / hoarder
You can call me anything you like but you're still not getting my domain until you meet my price.
anyone else here wondering what the page and stats linked to below would look like if there were zero "domain scalpers" in the world.. instead of millions... ? comments?
I am getting lost in all the new terminology..
so she is a "domain name collector hoarder notdeveloper notreseller notscalper"
did I get it right now?
This post is key to the conversation, they ultimately want to erase the job of all domainers to replace it with brown-suit ladder climbers that aspire for a quarterly bonus.
Hi Bob, thanks for your post. Totally agreed on your definitions. If I go an borrow $1m for a single word domain, hoping that someone will buy it for $2m, I think we can agree that is speculation.
That is not what most of us are about. I am looking into this subject and it's complex enough.
Our function is to create the successful domain names for the web, it really is that simple. We go through the expired lists - all 90,000 - to arrive at usable names.
That work is not fun. I'd invite anyone from Verisign to do that work. So how they find it. And right since Frank Shilling's time and even before that's what domainers have done.
We'll see what the next blog brings. It's been proven psychologically, if you have an emotion based narrative in your mind, but hear evidence that contradicts your narrative (which usually revolves around some sort of hero story), not only do you refuse to change your opinion, you double down on your original narrative.
If only we could!
It may be that Verisign is using "domain scalpers" as an excuse to raise prices.
As raising the price of the yearly registration of dot com names will make it
more expensive to hold onto large portfolios of domain names.
Boycott .com? Lol
It's funny because no small portion of .com registrations are sold to "scalpers", and they are names that have absolutely no value and would have never been sold to anyone else.
Separate names with a comma.