A look back at my position on new TLDs, 9 months later.
Last May I wrote an editorial titled “Why I’m opposed to new top level domains”. I outlined six reasons that I didn’t like the current proposal for new top level domain names.
Nine months later, I still have many of those same concerns. But I’m also looking forward to the introduction of new top level domain names. Look, everyone who’s pushing for new TLDs is in it for the money. And there’s money to be made, so rather than just fight it I’m also looking at how to play the game to my benefit. In fact, you may be surprised to learn that several large domain investors plan to launch new TLDs.
So let’s take another look at the six concerns I wrote about last May.
1. Consumer confusion will lead to an unsafe internet. It’s a given that new TLDs will create confusion for the typical web user. Just ask Michael Berkens. But the concern about it leading to an unsafe internet is probably not rational, given that the typical web user already gets duped by plenty of scams. The marginal effect of adding new TLDs is probably low.
2. ICANN will lose its path. This is still a concern for me. But at least now ICANN has a quality leader.
3. Politics will play a bigger role in the Net. In the nine months since I wrote the original piece, it has become more and more clear that this is a big issue. Governments are staking their claim and trying to get the leg up on new TLDs while pushing their view of what should be allowed on the web.
4. Registries will fail, leaving customers in a lurch. Yes, this will happen. And ICANN will get egg on its face after the first few fail and it works out kinks in its registry failover plan.
5. Large registrars will become too powerful, harming competition. This is still an issue, but it doesn’t really affect most of us. The registries have the most to lose here.
6. Fundamental changes to domain name regulation will be pushed through without proper controls. This remains one of the biggest problems with new TLDs. It’s not the concept itself, it’s how things are being done. No longer is the goal of a registry to offer the lowest priced, best service to customers. No longer will we have a “uniform” dispute resolution policy. These changes are being hammered through in an effort to get new TLDs out the door.
To summarize, I still have grave concerns about what is being “packaged” with new TLDs and the possible damage it could do to the web. But I also don’t want to sit back and let opportunity pass by.
Now, I’m not going to be one of those people that ignores the downside to introducing new TLDs. There are plenty, and I’ll continue to point them out. After all, it makes for compelling copy.
Jeffrey Eckhaus says
Lets also remember that most people who are against the introduction of new TLDs are against them because of money.
While they bring out noble concerns, most are protecting their financial interests and their income.
Andrew Allemann says
Jeffrey – true, everyone has their own motivations. I find it humorous watching the ‘trademark protection’ companies that keep saying they’re opposed to new TLDs. They really can’t wait for them, because they’re going to sell their customers on more of their services.
Jacob says
Hi Andrew,
Regarding point six, you only mention dispute resolution policies, what else there worries you?
Perhaps some of those issues could be parsed out as separate to New TLDs, particularly if they already exist as issues, thereby speeding the process while allowing more time to explore them.
There’s also an opportunity to make positive changes, do you see any scope there?
Andrew Allemann says
@ Jacob – the primary concerns I have are a) lack of pricing controls and b) changes to trademark rules/enforcement around domain names. They actually have been parsed out as only applying to new TLDs. If they were to stay there, I wouldn’t care. The problem is that they will find their way to existing TLDs. In particular, Neustar has already said it should get variable pricing for .biz. Most of the older registry contracts have a ‘most favorable’ terms clause, that would let them argue to get the same types of terms the new TLD registries get.
Jacob says
Hi Andrew,
Thank you, that’s helpful. Was not aware of that. Maybe if there are 100s of registries the need for fixed pricing will diminish?
Andrew Allemann says
@ Jacob – perhaps, but I don’t think any of them will challenge .com. Further, the problem is the switching cost of changing from one registry to another. If I set up my mine site on .eco and you decide to increase my fee 100x, it’s not like I can walk over to a competitor and just change my site’s TLD.
The latest draft applicant guidebook has some protections, such as the ability to renew for 10 years in advance before a price increase kicks in, but it’s not enough.
gpmgroup says
There are many unresolved issues in ICANN’s plan and how they play out will have profound effects on how new gTLDs evolve.
For example
The Vertical Integration plan which was suddenly introduced in the DAG without any formal public consultation, is a fundamental change. Which belatedly the GNSO is now to consider. My guess judging by the way the GNSO interests voted, they wouldn’t have even agreed to discuss VI if the GNSO had not been recently reformed.
If the PDP finds the existing system is in the public interest there is no guarantee the DAG will be even amended.
gpmgroup says
@Jacob
100’s of registries won’t effect the fixed pricing issue because different TLDs are not substitutable. The cost to change for businesses far out weights any theoretical competitive element new gTLDs introduce.
New gTLDs are also likely to only compete with a very limited subset of other new gTLDs if any.
What the current GNSO/ICANN plan creates will in effect be a series of private monopolies granted in perpetuity.
There still has to be concerns as to whether new gTLDs as currently proposed will create a more vibrant namespace and be the best way to meet the Public Interest requirements of the new Affirmation of Commitments.
M. Menius says
Regarding internet confusion (#1 above), I don’t think the main criticism is that it will make for an unsafe internet. Just a junky, polluted internet that is harder to navigate for the average consumer.
Jacob says
@ M. Menius
IMHO .co and .cm are doing a better job of that than any new TLD would, and we don’t see anyone up in arms at ICANN meetings about that.
Jacob says
@gpmgroup
Well I guess we’ll have to agree to disagree. I think TLDs are substitutable, particularly for new entrants into the market, and especially when you look at the retail price of a domain already registered and owned by a third-party.
We were told http://www.ecolabels.com would cost US$ 8,000 for example. For something that was bought for $6. Even De Beers would be jealous of margins like that.
In a free market, the onus ought be the other way around. How would keeping the namespace closed make it more vibrant, other than for incumbents and those benefitting from the artificial scarcity created by keeping this market closed?
Put another way, if you can find a way for me to buy the string ‘eco’ in a reasonable sounding, gTLD for less than a 100% mark-up from normal .com retail (i.e. 12 bucks), I might buy your argument we don’t need new TLDs.
gpmgroup says
@Jacob
The problem with new gTLDs is you have to brand the TLD as well as the ecolabels. With ecolabels.com the .com is branded implicitly for you day in day out by virtually every company in the world advertising theirbrand.com on TV, in print and on all their day to day communications.
With a new gTLD it’s like being in a really remote area, people need to remember not only your name but also the TLD where you have chosen to be. The more TLDs the harder this becomes
ecolabels.shop ecolabels.store ecolables.eco, ecolabels.green ecolabels.nyc
On balance it would probably be easier to register and brand a slightly longer .com like myecolabels.com or with some other prefix or suffix that describes your business.
.info has been around 8 years or so and still lots of people haven’t even heard of it. .info also only had .biz launching at the same time for competition.
.mobi and .asia are even less known outside the domain industry. If ICANN has several hundred new gTLDs launching at the same time most of them are going to seriously struggle to get mindshare even after years have past.
Andrew Allemann says
@ Jacob @ gpmgroup – There’s a difference between the initial registration and later price changes. If you’re deciding between ecolabels.shop and ecolabels.web, and one’s cheaper, you might go with it. But if you go with ecolabels.shop and they change their prices later, you can’t readily switch to ecolabels.web.
And it will still be a long, long time before a business would be better off going with .shop or .web at registration fee rather than buying the .com.
Jacob says
@gpmgroup
Yes that is a problem, agreed. New registries are going to have to market their TLDs to reduce those costs for consumers for sure. There might be an initial explosion of TLDs, then a winnowing as the chaff gives way to the wheat.
The remote area analogy is a good one. Some remote areas, like the Galapagos for example, are very well known, perhaps it will be the same for new TLDs.
Your suggestion to go for a longer domain won’t actually work for what we want to do. I know it’s specific, but it’s also important and has a lot of support. We need a short, inexpensive, generic domain name.
The mind-share question is challenge and a question for new TLD investors and their supporters. Certainly we feel it is a manageable risk.
M. Menius says
@jacob – .co and .cm have no clear meaning and are obscure to average internet users based in the United States. I’m making reference to common keywords that will be turned into gtld’s. Words already in existence on the left side of the dot will now be transferred in large numbers to the right side of the dot. This has the potential, when done on a large scale, to introduce an unprecedented level of confusion in the marketplace.
bernard says
Be honest to recognize it will hurt the domainers small world in 2 ways (at least):
* new keyword based domains will compete
* users will be confused, and tend to use more alternative way to reach websites as direct type in (toolbar based, search based, software based or whatever).
bernard says
But I just see benefit for everybody *but* domainers:
* more domains
* less type in traffic = more efficient navigating
I still wonder what will accelerate the bubble burst.
gpmgroup says
@ Jacob – Sorry for the timezone interrupted conversation 🙂
I like your Galapagos example 🙂 I would guess for most of the residents it’s probably best if they are not commercially exploited, plus they seem to be managing just fine with their local .ec ccTLD 🙂 Teasing aside, as with many new gTLDs I would also guess while it’s nice for crusaders to get them their own gTLD to give them “representation”, as with many likely new gTLD crusades it would prove very difficult to sustain over the long term.
I would guess what will determine the success or not of many new gTLDs will be the community they represent. If there isn’t really a community but rather a group of people with a shared interest or worse a shared interest to simply to make money then without a phenomenal marketing budget (which only the largest companies in the world are likely to be able to fund) then most new gTLDs will struggle beyond the initial defensive registrations and speculation stages.
With regards your specific need for a pure generic and not wanting to pay the price the current .com owner is asking, I would guess you are in a very small minority. Most businesses choose not to try and build on pure generics, preferring to build a brand so they can distinguish themselves from their competitors (often using a prefix + generic). Building a successful brand on a pure generic for many projects would be very expensive and the $12,000 would likely pale into insignificance compared with the total advertising and marketing spend.
I have feeling from your earlier posts you are maybe allowing your personal value system to influence a project decision. And the question you may be better asking would be is paying $12,000 the best solution for your project, rather than did the previous owner make $11,900 too easily.
gpmgroup says
@Bernard.
I think you’re probably a long way off the mark with your reasoning 🙂 Very few new gTLD keyword domains will “compete” with earlier TLDs because it’s highly unlikely any existing entities would want or even need to move. Plus most people are risk adverse rather than innovators, so they follow what everyone else has already done rather than take a risk.
Keywords in new gTLDs effectively are one word longer because the user needs to know the TLD + the keyword, compared to an existing TLD where the TLD part is “known” because other people have been using it day in day out for years.
While type-in traffic will fund registrations and reduce possible leverage most of the value comes from the ability to build a brand for an actual business and it is unlikely any number of new gTLDs will impact on that value in either the short or medium term.
Domainer87 says
Seems obvious to me that the new gTLDs are destined to join .AERO, .TRAVEL, .MUSEUM, .JOBS, .PRO, .BIZ, .MOBI, and .COOP in the Wikipedia ashheap of history.
How about .FAIL?