Why are new TLDs expensive?

[Martin40]

Hi, my question is simple: why are new TLDs usually so expensive? Instead of $10 you easily page $50, $100 or more for new ccTLDs?

 

[edwinfelix]

It all comes down to the question of total fixed cost and total variable cost.

For .io, they also need CEO, web admin, a legal department, etc. etc.
The cost is especially expensive if they want to do things their own way, i.e. not outsourcing things.

 

[MadAboutDomains]

The well established and most used domain extensions find that they can easily run their systems using the money that they recieve from $10 registration fees... this is not the case for new extensions as they often hardly get used, making their running costs harder to find, so they have to charge a high price to cover these costs.

 

[mojojo]

You can find the best names at the beginning, so if you want them you have to pay more. Then when the demand decreases the prices goes down IMO.

 

[Martin40]

Thanks Edwin.

But I don't quite understand this. Wouldn't their turnover increase if they lowered their prices?

 

[Dannoth]

They're probably expensive because there new!

 

[k2profit]

I think people who build new tlds want to get return on investment as soon as possible

 

[Martin40]

But take .tk. The're giving away domains for free, or else the're charging $9.95. Somehow I don't think this is a matter of overhead, but of pricing strategy. I wish I knew what the rationale behind the expensively priced TLDs was. On first sight it doesn't make sense to charge such "uncompetitive" fees.

 

[edwinfelix]

.tk is free or 9.99, but I'm not sure whether they are making any profit.

Lower price means more registered domains, but doesn't always mean more profit.
Say we ignore cost, if $100 brings 1000 registrations, and $10 brings 9000 registrations, they make $100,000 with $100/domain but only $90,000 with $10/domain.

 

[Martin40]

I get your point.

I guess with .tk they didn't have a choice. .IO looks cool as a collectors item and may be worth something. Recently casino.io fetched $6300.