How new top level domain names progressed this year.
New top level domain names came out with a whimper in 2014, with plenty of birth pangs.
What about 2015?
It wasn’t a break-through year
Hundreds more top level domain names hit the market during 2015. But adoption of new domains didn’t take off, proving what many in the industry have been saying: this is going to be a long, gradual process.
Most top level domain names have fewer than 10,000 registrations. Only 15 have 100,000 or more registrations, and all of these were aided by cheap or free registrations.
Cheap domains boost registrations
Where would we be without inexpensive domains?
The top 15 new issues have 6.2 million registrations, representing nearly 60% of all domain registrations in new TLDs. Basically, all of these domain names have been registered by the registries themselves or at very, very inexpensive prices of a couple of dollars. (An exception might be .Club, which has a good number of full-price registrations around $10.)
What are the domains being registered for? Certainly not for “end users”, meaning they don’t do much to push the concept of new domain endings forward.
Many of these cheap domains are being marketed to people in…
China
China was a huge story in the domain name business this year and warrants a separate post. The role people in China played in new TLDs is interesting as well.
Chinese have registered huge swathes of short domain names in extensions like .XYZ, .Click and .Club, mostly at very low prices. This is great for the registries and gives them more money to promote their extensions.
One of the amazing and often overlook aspects of this is that people in China can’t even use these domain names if they purchase them at their favored Chinese domain name registrars! That will likely change in 2016, although it’s not like many of these short domains will be put to use.
First failures
Many new TLD operators have business models that can’t support their relatively low registration volumes so far. Some are turning to the secondary market to auction off their entire strings.
Some of the registries doing this aren’t necessarily failing. They just see that other registries are willing to put a higher valuation on their string than it’s worth to them, so they test the waters. (It might be more valuable to a portfolio player that doesn’t have as much dedicated overhead.)
Others have truly failed. .HIV went to auction this year after getting only a couple hundred registrations. It failed to sell in the auction, but Frank Schilling gave it mercy.
Some big publicity wins
New TLDs might not have had their “twerking moment” yet, but they certainly got more attention in 2016.
They can thank .xyz for much of this. First, HBO show Silicon Valley featured Hooli.xyz. Then, perhaps inspired by Hooli.xyz, Google purchased the domain name abc.xyz for its new holding company Alphabet.
That was big.
Another big help this year was .brand usage, and this will only grow in the years to come.
Are they a good investment?
Some registries have good business models and are making plenty of money with new domains. But what about individual domain name investors?
It remains to be seen whether investing in new domains for resale is a repeatable and viable business model. People have made some good sales, but the resale market is still dominated by .com and country code top level domain names.
Many of the higher dollar sales have also been handled directly with the registry, cutting out domain investors.
Brian Chiyama says
I see a prolonged struggle for the new TLDs. Renewal rates might be good during the first years but I expect them to go down eventually. Some TLDs providers might even go out business if their costs are higher than the returns. It is one thing to register a domain name and a completely different thing to put it to use. Investing in domain names is no longer as lucrative as it used to be.
The market is flooded. My guess is the .Com bubble will return after this confusion with new TLDs has passed. I realise companies are always reluctant to change TLDs for fear of losing their Google rankings. A good example I see here in the UK is the adoption of the .UK extension. Though there has been registration of the short .UK extension only a few are actually using the short version. I am not sure what will happen when the initial period to automatically reserve the .UK equivalent for the .CO.UK owners expires.
I was against the idea of these new TLDs. They bring confusion and it is very unlikely the public will start trusting websites using these names. For example when I get an email from websites using the new TLDs I am still skeptical of their authenticity unlike if it was coming from a generic .Com address.
Quite pessimistic but I guess some might see light at the end of the tunnel.
spencer says
even .nyc I think is going to crash hard in the next cycle.
if a major metro area like NYC doesnt get adoption, I do not see much hope for these things.
DK says
Except .nyc seeing a huge adaption. In addition there is huge initiative by the city. Take a look at neighborhoods.nyc
I am in nyc, and saw 2 business in one event few weeks ago that switched from .com to shorter and better version of .nyc
spencer says
sorry but 2 companies aint gunna cut it. at this rate market penetration will never take hold. honestly saw .nyc as a failed endeavor whenever I see NYC advertising [and I do all the time] and THEY (the city) still use the .com
John says
Spencer, it would appear that you are way off, that DK is way right (huge adoption):
https://www.google.com/search?q=site%3A.nyc&ie=utf-8&oe=utf-8
Site Rank says
Agreed, even though there are some sites on .nyc its nowhere near the adoption that it would need to stick around. Its definitely not .io
http://siterankdata.com/show/extension/nyc (less then 20 sites in top 1mil alexa for such a huge tech city)
John says
Come on now, Site Rank. Did you even see my posts? Did you even look at the Google .nyc search link? Not enough to stick around, are you for real?
Adam says
Total trash. Even .club will see a huge exodus. There is just no need or desire by the public to have that many .club domains.
I can’t wait to see all the desperate sellers here soon. It’s .mobi all over again.
Joseph Peterson says
Funny. I wrote up a 5-page article about the nTLDs last night – 2015 in review and predictions for 2016. Even without reading Andrew’s piece or discussing the matter with him, it’s striking how much overlap there is. As if we’ve been observing the same reality.
@domains says
I dabbled in the new gtlds in 2014/15. Have dropped some but renewed some that have potential. Some of the keyword/extension combos go really well together.
It will be interesting to watch the China domain market develop in 2016 with all the new investors that must be coming in. There must be new companies, tools and conferences being developed to support all the new activity.
Adam says
@domains …… you say, “Some of the keyword/extension combos go really well together.” So do many in .biz, .travel, .mobi, .info and yet they still suck because end-users don’t want to buy them for the most part.
I call them “Fools Gold Domains” because they are eye candy, yet almost nobody wants them. They look good on paper but that’s it.
Buying these domains is like pissing all your money into a black hole.
John says
It’s basic marketing 101 – prices are generally simply too high. Most of the TLDs have little or no appeal either – in the “what were they thinking?” category. There is also the simple issue of public awareness, just like for .US these 13-plus years later.
As in the rest of life, you have diamonds, gold, silver, marble, and precious stones, and wood, hay, straw, rubble, dirt, and cow dung. A few fall into the first category while most fall into the other. Speaking of the “gold” analogy, the .gold TLD itself is a sleeper in my opinion and truly one of the best with loads of pizzazz and special one-of-a-kind appeal. The problem is simply that it’s priced way too high, however, otherwise normally those who check keywords when seeking to register a domain might see it and jump on it right away, aside from after-market sales. Unlike probably most domain investors, I follow the gold market regularly and it happens that China has been somewhat (though definitely not completely) quietly amassing gold to the point where basically nobody believes the official increase in national reserves that was recently announced after many years and virtually everyone believes it must be far far higher; China has become both the world’s #1 producer and #1 consumer of gold, surpassing India for the latter; notwithstanding the understandable surge and huge demand for domains themselves among Chinese investors, the demand for gold is also not only high but anticipated to likely increase; China just recently made the historic move of joining the World Gold Council for the first time; gold has steadily been flowing from West to East to the point where many people doubt we really even have what’s supposed to be in Fort Knox anymore, for which calls for auditing have been consistently refused; the Shanghai Gold Exchange is the largest physical bullion marketplace in the world; and China is expected to possibly dominate the entire global gold market before much longer in every way – while and during any concomitant high demand for and investment in digital domain assets as well.
Marketing 101: pricing, pricing, pricing; public awareness, public awareness, public awareness; quality, quality, quality. And that’s pure gold.
spencer says
You were making sense until you veered off with accolades for .gold
more garbage
John says
Here’s a case in point for .Gold, by the way. As Rick Schwartz so well pointed out on his blog recently, numbers don’t lie. So according to ntldstats (dot) com/tld, it only has a paltry 2,246 regs now even though one with the kind of one-of-a-kind pizzazz, appeal and positive associations that one has should have many thousands more by now. In my observation, the average basic reg price would be around $80 give or take. So that’s:
2,246 x $80 = $179,680
A small # of people have also sprung for some of the “premiums,” so throw a little more on top of that. Let’s say perhaps a total of around $200k revenue so far, perhaps even slightly more. I noticed for example that Michael Berkens picked up at least one .gold early during EAP that would normally have cost around $3,000.
BUT, if .gold were a $10 domain, for instance, people looking to register new domains every day would see it in their registration search results and think to themselves, “I like it, I want it, and I’m going to get that!” without hesitation and doubtless many times over for many people. There would also be those whose name is Gold who would like it for less.
That would be the case rather than supposing, which I suppose is what may be the case now and may have been the thinking behind setting the current basic reg pricing to begin with, that there might be enough people who are merely involved with the literal gold industry itself who would be willing to pay the huge normal registration pricing to make a big fortune and strike gold for the registry as it were. But that is nothing but stuck-inside-the-box thinking – to think that one should jack up the price because people merely in the literal “gold” industry might be willing to pay big bucks for basic reg, when the figurative “gold” concept and application, which can and does encompass and is applied to ANY AND EVERY INDUSTRY UNDER THE SUN, EVEN MORE SO THAN FOR .CLUB, is what would motivated many many people who are not merely in the literal gold industry to register .gold in droves.
How many days can you even go without seeing people in domain blogs and forums applying the “gold” metaphor to domains themselves, comparing them to gold, not to mention other areas of life both on- and off-line? How many days do you even go without doing it yourself for this or that? Think about it. So realistically by now I believe it would probably already be at >100,000 regs for .gold were it not for the extremely high reg price, or at least in the 50,000 to 100,000 registration range and growing. So that would by now be at least:
50,000 x $10 = $500,000, or
100,000+ x $10 = $1,000,000+
But the vast vast majority of people are not interested and not willing to pay anything like $75 to $95 or more for basic registration, and I’m quite confident one can simply forget about enough people merely in the literal industry for literal gold to spring for that, so it sits there withering on the vine with a paltry 2,246 regs despite how excellent and appealing it is as a TLD and the intrinsic appeal of the word itself, not to mention the EXTREMELY WIDE AND FLEXIBLE potential and applicability for actual use in publishing, commerce and marketing.
Amazing, and sad. And the same can be said for some of the others that also have too high pricing that simply greatly discourages adoption when things could be so much better, not to mention make the registries and registrars so much more money.
Sophie Sandberg says
The TLDs caused price dips for .com domain investors, notwithstanding the high prices of the short LLL & NNN domains to mostly investors from China.
Esther Dyson, former ICANN leader and one of the best tech investors in the world, predicted the TLDS would eventually crash, after “the money grab.”
My prediction:
Premium .COM domains will rise in value in 2016
China will still be a viable market for domain investors
.io & .me domains will be used by startup end-users to launch apps
Many of the TLDs will fold
The brand TLDs will become popular .sony, .apple, .google, etc
TLDs that require certification and vetting will become popular & eventually essential: .insurance, .bank, .realty, .law, legal….
Wishing all a prosperous 2016!
John says
“The money grab” – if it weren’t for that, a number of them would probably be making far more money than they are grabbing for.
Site Rank says
I agree Sophie, very accurate. .ME and .IO are going to be strong even though I would personally stick to .coms. There maybe a few breakouts like .top for certain type sites but overall .COM will king
Sophie Sandberg says
I found this quote by Esther Dyson, the founding chairperson of ICANN, on Tech Crunch: She nailed her prediction. She has a pretty good track record, as an early investor in Google, Facebook, Linkedin, Fitbit and more:
“The thing is, we are not running out of domains. This is a “way for registries and registrars to make money,” says Dyson. She also points out that “there are huge trademark issues. I just think it is offensive. If I own a trademark, now I have to go register it on 2,800 domains. It will create a lot of litigation.”
People only have so much space in their heads. The new top level domains do not create more space, she argues, but rather will just sub-divide the little attention people have for brands already.
Indeed.
Brian Chiyama says
I partly agree with Sophie but disagree on domain extension like .insurance, .bank etc becoming popular.
Yes, company owned extensions like.sony and .google can do well because they can easily change web addresses and force their customers to find them on these addresses. Was thinking just today if established banks or insurance companies would move to these. From my observation this is unlikely. Most banks have a local base e.g *bank.co.uk would unlikely move to *bank.bank because it has no local ( country ) connection.
Most banks would try to avoid *bank.com/us or *bank.bank/uk. As far as I am concerned there is not much hope for new TLDs. A few and perhaps many can continue to register and renew these but real use is unlikely.
The true test would be when some registries start closing extension and others follow suit saying, ” We have been thinking the same”.
John says
So I just did a simple site search on Google for .nyc, and it shows that Spencer here is way way off, and DK is way way right. Nothing but page after page after page of “huge adoption” of .nyc in the numerous pages I sampled; all developed and published end user sites apparently, and I did not see even a single parking page in the search results among the numerous pages I looked at.
Even I like .com, but I also most definitely like some of the new gTLDs – most notably and perhaps most importantly I like some of them as a true “end user” myself and not merely with an eye for selling. Care to rethink the “garbage” assessment, Spencer?
SoFreeDomains says
The story is not complete without the big sales by the big boys like Rick Schwartz.
April says
Not a break through year?
In less than 2 years registration of new Gs shot pass 10 million, and top household brands (Sony, Google, Apple, etc.) have made the switch to new domain endings. Not to mention, this year we found out once and for all that new Gs do not negatively affect search rankings. New businesses are embracing new Gs because they’re better for marketing and provide choice in the otherwise limited domain space.
Andrew Allemann says
“In less than 2 years registration of new Gs shot pass 10 million”
Below most expectations, and most given away for free or a couple bucks.
“and top household brands (Sony, Google, Apple, etc.) have made the switch to new domain endings”
Not true.
“Not to mention, this year we found out once and for all that new Gs do not negatively affect search rankings.”
We’ve known that for a while.