Holding back premiums for resale might not be in the best interests of domain registries.
Last month there was quite an uproar about Uniregistry withholding thousands of premium domain names.
Some people believe Uniregistry founder Frank Schilling misled them with prior statements about premiums. Others just think registries shouldn’t reserve lots of domains on principle.
Admittedly, most readers of this blog look at the issue from a domain investor’s standpoint, not the registry’s. Registries can and should do whatever maximizes their financial success.
That said, holding back a bunch of premiums — or charging premiums for them — might be an impediment to that success. Here are four reasons registries should think twice about holding back premium domain names.
1. There are already a lot of domains on the name collisions list.
The name collisions restriction takes some of the best domain names off the table from the get-go. Add thousands of other reserved domains to the list and it makes it even harder for people to find domains to register. This stunts the initial launch of a TLD, and I believe a strong start improves chances for long-term success.
2. Fewer domains get put to use.
If a registry allows good domain names to be registered at normal prices, a bunch (most?) will be grabbed by domainers. I understand how this would frustrate registries. But some of the good ones will be registered by people who want to create actual websites. Even if it’s just 3 out of a hundred, getting these sites out there is important for registries.
Every website that uses a particular new TLD advertises for that TLD. It makes them viral. “Hey, I want one of those domains, too!.”. Registries need to do whatever they can do to get domains into the hands of people that will use them, even if they have to “throw away” many more to investors.
It’s a very rare case that a frustrated end user will write a letter to ICANN, someone will blog about the letter, and then the end user will subsequently be connected to the owner of the registry who will offer the domain to them.
Founders’-type programs are one way to increase the percentage of domains that get put to use, and Uniregistry has since started one.
Yet most end users won’t find out about these opportunities. When they see that a domain isn’t available, how will they find out about the founders’ program? It’s not like there’s a message at the registrar.
3. It pisses off registrars.For now, independent registrars are still THE channel to market for registries.
Registrars are already challenged by the tradeoff of showing new TLDs versus existing ones. Name collisions limit what they can sell. Now add premiums to the restricted list? If there’s nothing good to offer, registrars will move on to the next TLD that comes out tomorrow.
Donuts’ model of offering premium domains through registrars at higher reoccurring prices is pretty smart in this regard. The domain name registrar stands to benefit from the premium pricing.
4. Frustrated domainers might not bother with your next TLD release.
Like it or not, domain investors are driving TLD registrations so far. This goes beyond the typical domain investor that reads this blog.
So far I’ve observed four types of domain registrants: purely defensive, semi-defensive in which companies register terms related to their business, end users ready to build a website and speculation. The group of “I just registered this new domain to put it to use!” is rather limited. (Some niche profession TLDs may be an exception.)
How much time am I going to spend on Uniregistry’s next release? Very little, unless it’s to write a story about it.
I’m not writing this post to gripe about registries making money off of premiums. If I owned a registry, I’d do whatever I could to maximize my profits. I’m not sure holding back a bunch of premiums will accomplish that goal.