question What is holding back demand for NewG's?

[Internet.Domains]

What is holding back demand for NewG's?

Is it lack of end user education? Premium renewals? The ability for renewal prices to skyrocket with no price controls? Something else?

NewG's have been out for a half decade now, yet they still have very little demand. The amount of sales by both monetary and volume metrics show there is little demand.

So what gives? What is holding back the demand for NewG's in mid 2019?

(Disclaimer: I am pro-NewG and own a few. I own enough, not to change a lifestyle, but to gain a better understanding.)

 

[hookbox]

What is holding back demand for NewG's?

Is it lack of end user education? Premium renewals? The ability for renewal prices to skyrocket with no price controls? Something else?

NewG's have been out for a half decade now, yet they still have very little demand. The amount of sales by both monetary and volume metrics show there is little demand.

So what gives? What is holding back the demand for NewG's in mid 2019?

(Disclaimer: I am pro-NewG and own a few. I own enough, not to change a lifestyle, but to gain a better understanding.)

As the old saying goes, "Don't fix what's not broke". Dotcoms work so there is no reason for any business owner that needs a domain to venture into the unknown with an unproven domain extension. Once there is a good reason to switch then people will switch. Until then dotcom will rule the roost.

 

[equity78]

Devil's advocate:

What will the world of internet and domain names look like 100 years from now?

Will .COM be what your grand parents and great grand parents used?

Is that a good thing, suggesting longevity?

Or will it be overplayed and considered old school. Maybe even a first generation, or legacy feel. Depending on what the next 100 year of internet technology brings us.

The other thing to consider is smaller sample sizes. In thinking how long will .COM dominate, in comparison to newG's making real traction.

I mean, if it takes 20 years for newG's to fully adopt, 20 x $65,000 = $1.3 million in renewal fees anticipating that point.

That's a lot of money to be tied up that long. Especially considering (I assume this to be true) the renewal rate can raise at any point, without a cap? Or is there a cap?

Regardless, I think some people are hedging (waiting) until newG's to pick up traction before investing. E.g. if you buy car.rent 10 years from now, you would save $650,000 in renewal fee's.

This might be a different equation for those with development purposes.

Could car.rent generate more than $65k per year in value from the name to justify the year expense?

Would $65k per year be better spent on development or other operational costs?

Given the high renewal, do they see this as a domain investment with reseller value?

Would this look good on a balance sheet for investors to understand?

Would the results differ if one was willing to spend $500k on .COM?

When I think of a start up car rental company, first think that comes to mind is Turo.

Turo, a company that's received over $187 million in funding with three acquisitions under their belt: Croove, Social Studios, Wheels.

Will they ever pivot to a newG such as car.rent?

Can they explain the $65k/year? Or is that an unnecessary burn at this point in time?

FWIW, Turo does own Turo.Agency (doesn't resolve for me) since 2015 but my guess is that only carries an estimated $20/year renewal unlike the some $500/year or so renew that accompanied the infamous Travel.Agency auction a few years ago (if memory serves correct).

So why the $65k year renewal?

Simply supply and demand?

Holding out for a big car rental company wanting to take a marketing gamble? If so, why charge an Enterprise or big car company like it such a premium given all the consumer awareness they could bring to the .Rent TLD should they implement it to their makreting strategies.

I wonder if the .Rent people would get creative with their negotiations, and be willing to wave their renewal fee's in exchange for equity stake in a funded development project wanting to use the name but can't justify burning operating capital on renewal fee's thus the requested partnership.

What's really going on with these $65,000/year renewal fees?

You make some good points Grilled, we can also look at extensions that have had that lengthy period, .biz and .info have been around a long time. If .info was a new string I believe several companies would have bid for the rights to it. I mean the Internet is about information. Neither biz or info are great investments for domainers.

 

[equity78]

Thanks for the interesting thread topic @Internet.Domains , and all of those who have replied. I agree that confusion and stability questions, along with the way many of them were promoted, or not, by registries all were problematic. Clear long term renewal caps, voluntary ones, would help.

I think more respect is the primary thing that is needed. The best way to get that for new gTLDs that operate in a niche is to get respected professionals in that niche to use them in real websites. Large sales, use by respected companies, stable registry operations, and the right kind of advertising may help build respect too.

At least in sales volume, the new gTLD have grown, but very slowly. NameBio stats

• 2018 $5.7 million volume
• 2017 $5.2 million
• average per year last 5 years $4.4 million

This includes significant registry premium in some cases, and not entirely clear if that has changed over the reporting period. Also, unless things change, this year so far is looking less good, although the recent sale of free(games) for $335,000 adds a boost.

It is my opinion that ultimately the value end of the market must grow first, and the more lucrative domainer end will follow. That is we need more $$$ sales to build common use of the TLDs. I believe there is evidence of this in other TLDs (like some of the general purpose country code) - low value sales grew prior to them becoming mainstream. The elimination of minimum commissions at Sedo (temporarily at least) may help the value end grow.

I think it was always somewhat misguided to view the new gTLD as alternatives to .com and country code. Rather, new gTLDs should be viewed as effective ways to do different things in an organization, such as market a specific product or service, or as ways to shorten and make higher impact URLs for use in social media marketing campaigns. I think they are also ideally suited for many non-business uses.

In addition to the many good reasons others have mentioned, I wonder if it is possible that part of the reason is that most of us who are selling primarily new gTLDs in aftermarket are simply not as experienced as those who are selling legacy extensions. I do realize that some experienced domain investors have tried selling new gTLD, but many never did in a significant way. I think those with a decade or more of sales experience are more likely to close deals for good values.

I think some new gTLDs, maybe even most, will achieve sustainable success (although it may take a long time). I think that the registries that held so many of the great names makes it difficult, although not impossible, to be successful as a domain investor in the extensions.

Bob

I especially like this point Bob

I think it was always somewhat misguided to view the new gTLD as alternatives to .com and country code. Rather, new gTLDs should be viewed as effective ways to do different things in an organization, such as market a specific product or service, or as ways to shorten and make higher impact URLs for use in social media marketing campaigns. I think they are also ideally suited for many non-business uses.

While I agree these things have become too expensive to just be throw aways a lot of the time, the best shortest names that make a perfect oneword.secondword intuitive marketing campaign sometimes cost $3,000, $5,000, $10,000 a year.

This is where the whole system is screwed up and ICANN is to blame. They were looking to get rich so they had all these companies bid and over bid for extensions that now those registries and their investors need to have crazy pricing to justify their investment.

 

[droned]

The following seem to have the highest (in no specific order) regular renewal rates ..



.REALESTATE

It would be interesting to analyze each registries

High annual renewal and too long tld. This new g will go on the dark..
Usa.realestate $12k renewal

 

[Recons.Com]

$6.5 million dollars in registration and renewal fees for 100 years paid up front.

VS

.COM = 100 years x $20* = $2,000 in renewal fees

*rounded .com renewals up to $20/yr to adjust for any .com increases that may incur over the next 100 years.

Thus, with this model, anticipating at least a 100 year business span, one can buy and renew Car.Rent for $6.5 million.

Or, they could spend $6,498,000 acquiring a premium .COM, and putting the other $2,000 away for the next century of domain renewals.

The way to look at it is a bit different.

You have to determine your required rate of return or your opportunity cost. Let's say if you were guaranteed an annuity at 5%, then you'd take it. Then basically that is the rate for low risk investment you'd take.

Now if you'd commit to a fixed permanent annual cost (as when choosing URL for your business that is what you expect), you'd use similar rate, hence the 5%.

The formula for determining Present Value (PV) of future constant cash flows is the annual amount divided by the rate, hence 65K$/5%=1.3MM$.

So, $1.3 million one time payment would be the equivalent of $65K/year payment (.com renewals can be ignored, as their PV would be only around $200).

 

[Bob Hawkes]

The new gTLDs are of course a collection of rather different extensions. If we turned the OP question slightly, do we see any extension/registry as close to doing the right thing with their TLD(s)?

 

[TCK]

These are the key reasons I believe that the nTLD’s acceptance is being held back:

1. Premium pricing for registration and renewals. As already mentioned by others.
2. Very low number of live sites. Point #1 has largely contributed to this.
3. All the marketing/promotion of nTLDs seems to have been targeting domainers rather than end-users. As such, the general public doesn’t understand them and that they even exist.
4. ccTLD’s like io and co are becoming used as alternatives to com rather than nTLDs.
5. Limited potential usage.
   1. Only very few can be considered as ultra-premium or even premium (like vacation.rentals or stock.photo).
   2. Language-focused. They make sense mostly in countries that speak/understand that language.
   3. Even an extension like xyz that is meant to be international is very long to say in languages like Spanish: ekiss-ee-gree-ega-zeta.

If today’s trends continue in creating online echo-systems that are recognizable the world over, dot com will be the TLD of choice.

I think that in certain countries and geographic areas, some nTLDs can make sense and be recognizable. The whole world does not have exact same ideas as to what makes a great domain. For example, in parts of Europe (ie Germany) domains with dashes are very common.

From a pure marketing perspective, some (not all) nTLDs make a good choice as compliments to dot com. And the extension itself makes that very apparent as explained in this article:

https://www.dnplaybook.com/new-generic-top-level-domains-as-compliments-to-dot-com/

 

[Internet.Domains]

The new gTLDs are of course a collection of rather different extensions. If we turned the OP question slightly, do we see any extension/registry as close to doing the right thing with their TLD(s)?

Great question @Bob Hawkes!

I believe .Club has done the best job. I feel if Donuts and others build a similar model there would be more success with the entire program.

The fact that every extension can have night and day differences with renewals and terms has hurt the entire program. There should be some consistency amongst all extensions to grow to full potential...as always IMO......

 

[namemarket]

For me there are two main negative issues working against newer extension usage and popularity:

I rarely look for newer tlds anymore because frequently they are registry reserved. It's real unfortunate the registries reserved so many good ones. A more or less perfect example of that is .homes where most every one I ever checked was reserved, including some dot-homes which looked like non-premium quality.

One more big issue is the often very high renewal fees. In fact, there has been several reserved names where they were priced at say $235 or $980 with the same renewal costs, which I may have purchased if not for the renewal issue, i.e. I just looked at one where I thought it was valued at $235 however unlikely it's worth $2,350 which would be the cost over 10-years (or nearly 10k on the $980 name) so did not buy.

 

[TCK]

I rarely look for newer tlds anymore because frequently they are registry reserved. It's real unfortunate the registries reserved so many good ones. A more or less perfect example of that is .homes where most every one I ever checked was reserved, including some dot-homes which looked like non-premium quality.

It seems like this is done in large so that registries can get a cut of the aftermarket instead of leaving it all for the registrars. They seem to be holding back names so they can create a "premium marketplace" for them. An example is names.club. As the expression goes, they want to have their cake and eat it too. They want to create hype so that domainers register their nTLDs and at the same time they compete with domainers by holding back their best names to sell on the aftermarket for huge profits themselves. At least that seems to be the idea. This is very short-sighted because they are holding names or pricing them out of the market that would otherwise be developed and boost their nTLD's popularity.

 

[DomainRecap]

As well as the insane pricing structure of new gTLDs, I'll chime in with another of my pet peeves:

There are too freaking many of them.

Right now there are over 1,200 active new gTLDs in operation, and with almost 2,000 applications (and growing) there doesn't seem to be an end to this bizarre ICANN money machine.

These numbers are just stupid and there is no way in hell that the marketplace requires almost 2,000 new extensions. Worse, these growing numbers continue to water down, and make largely irrelevant, the entire new gTLD program - it's like watching feral rabbits multiply in Australia or a massive tsunami that never seems to end.

At a certain point, people will just tune out all this garbage.

 

[Chris Hydrick]

I wonder how many newG registries are profitable?

And what are these newG's doing with their profits?

Spending on marketing, advertising, and raising consumer awareness?

Or are some hedging for the possibility that

At a certain point, people will just tune out all this garbage.

And using the profits (money that otherwise would have been spent by another domainer competing against the registry owner in .COM auctions) to fund premium .COM purchases?

Dun dun dunnnnnn

 

[Bob Hawkes]

I wonder how many newG registries are profitable?

I suspect it is hard to dig out for tiny registries but big ones report finances regularly. For example this is most recent for Radix. They are apparently profitable with profit growing (by 45%). Interestingly 87% of revenue come from standard registrations (27%) and renewals (60%) with premium not that much of pie. I expect Donuts rely more on premium revenue.

http://www.circleid.com/posts/20190..._45_percent_growth_in_profitability_for_2018/

Bob

 

[Rich]

I like the idea of the new gtlds, i thought about grabbing ****.place for development of a local restaurant but the .us would work just as good at a fraction of the cost. Maybe the problem is too many to choose from, along with greed of the registries, misinformation, and it's simply too early or late for them. None of my friends have heard of .dental or .world but we expect people to buy into them.

 

[jmcc]

The new gTLDs are of course a collection of rather different extensions. If we turned the OP question slightly, do we see any extension/registry as close to doing the right thing with their TLD(s)?

A very good point, Bob,
Registries have to do what is right for their TLDs rather than for domainers. That's an expensive lesson that many domainers have to learn the hard way. Some of the leading new gTLDs have used discounting to grow their zones. These are generally short-lived registrations (one year wonders) and most do not renew. However, there are some who have stuck with a higher than .COM registration fee and they are relatively stable but they are growing slowly. Only .XYZ has been successful in using discounting as a tool to drive growth. Its low reg fee makes it attractive in developing markets. Most of the new gTLDs have geographically based core markets and they reflect that in the renewals and usage.

There is some confusion about "demand". Does it mean demand for premium domain names or demand for domain names in new gTLDs? They are two very different things. Secondary domain name markets are only viable once there's some kind of established primary market. Establishing that primary market takes development and that takes time. It will take time for some of the new gTLDs to develop that primary market and it could be anything from a five year to a ten year hold on some registrations. A few of the new gTLDs are already casualties and the blood trails are evident to those of us who analyse TLD markets.

Once a newly launched TLD gets beyond the second launch anniversary, renewals become extremely important for the TLD. Where registrations are faltering, some registries have resorted to using discounting to drive registrations volume. Unfortunately, it is like shaving while drunk with a chainsaw.

There is a major market correction in progress on the ex-Famous Four NGTs. (.LOAN/ACCOUNTANT/BID/CRICKET/DATE/DOWNLOAD/FAITH/MEN/PARTY/RACING/REVIEW/SCIENCE/TRADE/WEBCAM/WIN) as the new registry management has stopped the discounting and increased the wholesale price. The .LOAN NGT may end up with only 20K registrations later this year. But this is actually a good move and intended to repair the reputational damage that discounting did in some of these NGTs.

Some of the NGTs are taking on the growth characteristics of early-stage ccTLDs. That means slow and steady growth while they develop the TLD's brand and credibility. These are not quick flip TLDs and their market size is only a small fraction of that of .COM's market.

Regards...jmcc

 

[DomainRecap]

The current new gTLD market is like putting 1200 rats in a cage, and then coming back in a few months.

What you'll find then is a couple of very strong alpha rats prowling around, but the vast majority of the original 1200 will be long gone.

That's the inevitable future for new gTLDs, as the market simply cannot support 2K+ extensions, and only the few strongest ones will survive.

 

[namemarket]

...There is a major market correction in progress on the ex-Famous Four NGTs. (LOAN/ACCOUNTANT/BID/CRICKET/DATE/DOWNLOAD/FAITH/MEN/PARTY/RACING/REVIEW/SCIENCE/TRADE/WEBCAM/WIN) as the new registry management has stopped the discounting and increased the wholesale price.

Today Dynadot is offering only $3,49 reg fee with low $3.49 renewal on .TRADE which I discovered when looking at buying 2 dot-trade names.

 

[jmcc]

Today Dynadot is offering only $3,49 reg fee with low $3.49 renewal on .TRADE which I discovered when looking at buying 2 dot-trade names.

2018 renewals are not high. (4.61% January 2018 doms, and 2.41% on February 2018 doms. The 338 new registrations over April 2019. Very different to those over April 2018 (18,084) and over May 2018 (12,460)).

Regards...jmcc

 

[HotKey]

What the new G's really need is for @Kate to jump on board. Preferably in this lifetime, sometime. Where the heck is she, anyways??

 

[DotKing]

IMO, biggest concerns about newG:
- majority of population is not aware that new extensions even exists, which is imo a huge downside to own business website on newG
- it's hard to advertise without 'www' prefix as someone mentioned already, especially if extension is a longer word
- multiple and confusing pricing models

 

[Bob Hawkes]

What the new G's really need is for @Kate to jump on board. Preferably in this lifetime, sometime. Where the heck is she, anyways??

I was wondering the same thing. Even though her view was not in favour of new gTLDs most of the time (or .mobi either ) I very much enjoyed @Kate 's logically argued and clearly expressed posts. She helped keep us on our toes! I hope we hear from her again soon, and that she has just been enjoying a well deserved holiday or selling a zillion domains and too busy to post lately.
Bob

 

[Jurgen Wolf]

- majority of population is not aware that new extensions even exists

Majority of population is using Facebook/Twitter/Instagram and that's all... they don't need any domains.
And they click - what they see on their smartphones...

Internet has changed since 90s, did you notice?

 

[Jurgen Wolf]

a huge downside to own business website on newG

Visit REX.ONE
Business or not???

p.s. I sold it for $5K in Feb.

 

[Bob Hawkes]

I used to feel that there are too many new extensions (and definitely feel that some like .sucks should never have seen the light of day, and identical singular/plural like .loan/.loans should not both have been approved), but I am not sure I still think that.

In my personal sphere I see a bit of evidence that people are changing mindset not to that they know the names of a bunch of extensions, but rather that there are many things possible and they are not surprised to see something after the dot that they have not seen before. I think several things have helped this, including the success of the general purpose country extensions, some start of brand TLD use in public view, publicity re a few big sales, and I think especially the impact that TLDs like .app and .blog have. The link to big name companies and use in venues that many people see.

In many areas of life a huge number of things coexist, each finding their market. Think publishers. A few big names have a lot of the market but there are many tens of thousands (probably more) publishers. When you look for a book you don't insist on it being published by a big name. As long as their is a robust supply chain small publishers can define a small niche and be successful. If ICANN fees and costs take this into account, there is no reason that very specialized extensions can't succeed.

The other reason I am not as negative on so many new gTLDs as I once was, is they allow many more companies to get a domain that exactly matches their name. I think one of the most promising routes for new gTLD investors is to get a role in helping startups choose a name looking at possibilities with new extensions. Much inertia to overcome for it to ever succeed, though.

Have a good weekend everyone.

Bob

PS On a different topic, but in answer to the OP, I think the most important thing the registries could do is have a lengthy list of examples of significant real world organizations using their extension. Some do it, but many do not, or not well at least.

 

[Jurgen Wolf]

helping startups choose a name looking at possibilities with new extensions.

This week I had $500 inquiry on .tech from Indian startup...