Domain Name Wire

Domain Name Wire

  • 4 reasons domain name registries should think twice before reserving premiums

    1. BY - May 07, 2014
    2. Domain Registrars
    3. 14 Comments

    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.

    empty store shelf

    Sorry, we have nothing to sell you.

    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.

14 Comments
  • “How much time am I going to spend on Uniregistry’s next release? Very little, unless it’s to write a story about it.”

    At least you don’t sugar-coat it.

  • @Allemann,

    Shhhhhh, don’t help them?

  • They are sipping the magic potion thinking if they wait ten years, and click their heels 3 times the end users will come.

    As with some of the worst investments of all time, people will chase them, especially in the promises of new beginnings, and making a big splash.

    As we come down the pipeline we see once enthusiastic domainers even seeing the silver lining, and questioning the gtlds, the firm veterans are being proven right.

    These guys have a 7 days window, and poof they are forgotten, the drop rates of 5000 string registries is going to be quote intense if they lose 1000 names or so, most aren’t even at 5000, yet claims of 5M loom out there.

    This is strictly a cash, anyone who does their due diligence, and applies basic securities laws can see the current registration TOS will not float.

    Not bursting anyone’s bubble, just telling it how it is.

  • Your comment about Founder’s Programs is spot on. IMO, every TLD should have one to encourge early adoptors.

  • Angelcakes says:

    May 7, 2014 at 10:41 am

    its not just the registries its the registrars to. 101domain allowed people to register domains and then contacted them over a month later saying that they were premium domains …. and then tried to charge up to seven thousand dollars for each one! that leaves customers cray with both the registry and the registrar. no credibility in that premium process hombre.

    • Angelcakes, the registry would provide 101domains with a list of premium domains which it would input into it’s platform, then send an email letting all the pre-reg know the current situation.

      This is great money for the registars to sit on all this money for months on end gaining interest.

      The GTLD’s have operational flaws in regards to being clear in regards pricing increases and % year over year, there is no set cap, this is very dangerous.

      • Angelcakes says:

        May 7, 2014 at 12:04 pm

        hey robbie, youd expect them to email during pre-reg, but no they didnt do that man, 101domain let the registrations take place and then contacted the customers after over a month after they were registered trying to get thousands of dollars out of them.

        • I hear what you are saying, and agree with you, thing is most of these registries are flying by the seat of their pants, and they usually do not submit these lists until a few days before launch. Same thing happend with the chinese registrations in the link. It is not very professional, and leaves a lot to be said about the industry to some degree given they asked icann for an express route to launch. ICANN did not do a very good job of dotting, the i’s, and crossing the t’s, the gtld’s have essentially just been a lottery for them, and now they want to take those untold millions, and establish outside the rule of North America.

  • This is a spot on article.

    I have 20-25 domain names I want to register for .guru .buzz .zone. I have 2-5% success rate (guesstimate). I even paid for EAP and some premium renewal, but that’s ok. I am happy with my acquisition.

    I want to do the same approach for .link, all registered by Frank other company. And yes, I will not spend time checking it with Uniregistry other extension.

  • I would expect registries to be very aggressive with their founders program, because actual, real websites owned by celebrities and high profile people may kick start the viral marketing campaign needed. So far, I’m not seeing any good marketing campaign.

  • from the point of view of the end buyer it makes no difference whether the registry holds it or a domain investor – they still need to pay a premium price. but i think this way might work out better because the registry has an interest in not holding on too long and being too greedy with prices so that the extension can develop, whereas a domain investor might hold on for too long. i’m sure most registries will find that balance – if they don’t they’ll die. i think many domainers are bitter because they can’t get a good piece of the action. i understand though.

  • As somebody who has seen both sides of this, I think the registries have been smart to keep premiums. It makes the registry stronger because it gives them extra cash and the control of the evolution of their extension. Registering the premiums as opposed to putting them on some kind of premium/EAP activates them in the root, so at least the names start resolving to websites when people type them in, rather than resolving to an error search. I think that was a pretty smart move on the part of .club and Uniregistry who both seem to have registered names as opposed to reserving them. It clearly costs more to do it that way because now you’re paying ICANN fees for the registration but it also starts a date stamp, aging the name for future search positioning. As a domainer I would like to have many of those premiums at registration price but with the registry, the resales price to an end-user is going to be lower (or potentially free) as opposed to domainers who I have seen asking very high prices for premium resales in new extensions. You correctly point out that many of the best names are ICANN reserved names so that makes the reservation issue seem even bigger than it is.

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