They’re off to a fairly slow start. Will that change in 2015?
This is the second in a five part series covering the top stories in the domain name industry in 2014. You can also listen to the companion podcast covering these five themes of 2014.
2014 was the Year of the New Top Level Domain Name.
Hold on — Let’s qualify that. For the domain name industry, 2014 was the Year of the New Top Level Domain Name. Outside the industry? Not so much.
New TLDs started rolling out in January, but early results were mostly below expectations.
They were below the expectations of the many new TLD applicants that predicted tens of thousands of registrations (if not over 100,000) per domain within the first year. (Most have fewer than 10,000).
They were also below the expectations of the intellectual property lobby, which predicted billions of dollars in added expenses. (Most new TLDs had fewer than 300 sunrise domain name registrations).
And they were below the expectations of the budget-makers at ICANN.
There are a number of reasons early results weren’t as predicted, including some things that were hard to predict back in 2012 when applications were due.
For example, name collisions kept a lot of good domains off the market. Registrars also weren’t ready, partly because registries tried a lot of new things that were difficult to implement.
But the big reason new TLDs didn’t meet demand projections is because there isn’t a whole lot of pent up demand. TLDs are going to have to create awareness and a brand for themselves, and then their market will slowly grow as people that need a new domain discover the new options. There are roughly 25 million .com domains registered each year; new TLDs can siphon off some of this and grow their share over time.
The year of new TLD launches was also characterized by controversy over which TLDs are actually doing the best. .XYZ has over 700,000 registrations, but many have been given away for free.
.Club has most paid registrations at over 150k.
Or should you look at which domain has the most revenue because some domains are priced much higher?
With daily zone file numbers public, total registrations are the most readily available figure to judge new TLD adoption by.
Despite muted early results, new top level domain name companies are paying a lot to win TLDs in contention set auctions. There have been several 8 figure auctions already. Does it make sense that new TLDs are being auctioned off for so much given the payback period? Here’s one reason it might: new TLD applicants still believe their offerings will be successful. It’s just going to take a bit longer than expected.
As Rightside CEO Taryn Naidu is fond of saying, awareness of new TLDs has never been lower. Awareness can only grow.
Even with lower than expected numbers, keep in mind that you can still make good money offering new TLDs. Here are some actual revenue numbers from Rightside on a few of the strings they’ve launched.
2014 was the Year of the New TLD for the typical reader of this blog. Will 2015 be the Year of the New TLD for the general public? Or will that be 2020? Or…
Before 2014 and early into the year, I was in the habit of referring to the new extensions as “vanity TLDs”. That’s a phrase I mainly chose to drop because “vanity” can be read as “egotism” or “futility”.
What I meant wasn’t that partisan or inflammatory – something more along the lines of vanity license plates, custom luxury items, or any optional purchase. Ultimately, I (like most other people) opted for the objective “new TLD” / “nTLD”.
Yet I think my early instinct is more in line with how nTLDs are currently regarded by people outside the industry – as vanity options.
Good options sometimes. But more extra than central.
@Andrew – “But the big reason new TLDs didn’t meet demand projections is because there isn’t a whole lot of pent up demand. TLDs are going to have to create awareness and a brand for themselves”.
Both of these points seem right on. Some of the new tld’s are long overdue and will have good long-term applicability like .business and .realestate. The sheer number of tld’s released was not justified though. It’s pretty messy at the various registrars seeing the huge list of available domain extensions. I think we’ll see a select few generate press and adoption over the next 2-3 years.
Don’t forget .mobi in all this. It has nowhere to go but up. Buy now because the mobile revolution is here! RIP .mobi.
Nobody learns from history do they? The road is littered with dead extensions that already tried. Funny how nobody wants to talk about that. It’s like the dirty little secret swept under the table that nobody wants end-users to know about.
New TLDs are the domains of the future and always will be. Get it? 😉
I don’t have anything against new TLDs. I just think they will mostly fail, if not all.
Psst…..wanna’ buy a .jobs domain? If that was coming out today everybody would be peeing in their pants to buy all the “premium inventory”. Fools and their money are soon parted. Likewise, fools and their money are some party!
I think the gtlds are the dumbest things to ever hit the internet naming system. Sheer stupidity to have expected them to work.
It’s very hard to sell a decent and fairly short .com.
I started with about 80 plus .coms, let some drop, and sold some at about $1000 each
or sometimes less, in about 15 years time….I still have about high 40 plus .coms for sale and making some parking money.
I consider most/many gtlds worthless and a fool’s errand for the registry
and domain buyers. Just my opinion here. Most people just don’t understand or need them.
@Joseph Peterson: *All* domains are “vanity” domains, regardless of TLD, by definition. You’re making a distinction without a difference. Unless you’re saying we should all go back to using IPs.
@Icy Kites: Saying the .MOBI experience proves gTLDs won’r be successful is somewhat like saying the Sinclair experience shows PCs won’t ever be successful. Or the Prodigy experience shows the Internet will never catch on.
@Laszlo,
I didn’t use the phrase “vanity domain”; so beat up that straw man as much as you like! We both agree that all domains are vanity domains and preferable to IPs.
This is my point:
Not all TLDs are vanity TLDs. Most domains are registered with the extension assumed / requested as a default setting by consumers. Frequently that’s .COM; but outside the USA, it will often be the local ccTLD.
Registrants who experiment with novelty TLDs in order to differentiate their domain from the actual statistical norm are behaving very differently from registrants who take .COM or .CA or .COM.MX (whatever is the majority extension for thir environment) as an axiomatic starting point.
When someone brands as Join.me or Globo.tv, Coffee.club or Nature.photography, they are going out of their way to deviate from the status quo. Whereas a typical license plate, straight from the factory, or a typical .COM or .CO.UK extension draws no attention to itself; a vanity extension such as .CLUB or .ME or .PHOTOGRAPHY has been specifically requested (like a vanity license plate) in order to draw attention to the TLD.
That’s an observable distinction.
@Joseph:
But I would say that gets things exactly flipped.
That is, your premise is that .COM *is* a status quo. I would say that’s only true to Internet specialists. I would say that to the overwhelming majority of people, **natural language** is the status quo, and that they’ve been shoehorned into buying the geeky .COM abbreviation of a real word because technically oriented people have long provided only that one option.
It’s not unlike property developers in the US. For decades they resolutely provided the market nothing but sprawl suburbia. They then interpreted the sales of their suburban houses as evidence that the market took suburbia as the status quo… and not as a reflection that there was little else available for sale, and people needed houses now. As the millennials are buying increasingly in urban centers, the assumption Americans “naturally” gravitate towards surburban living is being questioned.
Same thing with the recent stats from Verisign about how most gTLD purchases were of strings that were readily available in .COM. Verisign pitched this as evidence .COM isn’t really supply constrained. I took it as evidence that even though the .COM option was available, **the customers chose gTLDs anyway.**
Why should natural language exist on only one side of the dot?
@ Laszlo, I understand that you’re arguing in favor of nTLDs as viable new options. Since I’m not a .COM purist, we probably have at least some common ground there.
Yet I think it’s plain to see that there IS a status quo defined by established gTLDs and ccTLDs. That shows up in terms of all sorts of raw numbers (registrations, websites, traffic, large-cap brands). When you say that consumers have been shoehorned into those choices, aren’t you emphasizing that the status quo is too rigid and limiting? In doing so, surely you must observe the established TLD hierarchy in order to criticize it.
I would argue not only that there is currently a default TLD preference but that it will and probably ought to continue. Nobody can possibly maintain that small niche keywords like .HORSE could ever become as familiar to the world as more established, more versatile TLDs. Such fringe nTLDs will always appear as vanity items, novelties. As I mentioned, I dropped the word “vanity” because of its pejorative sense. Join.me uses a vanity TLD in a very successful way.
We can set aside the question of whether nTLDs will or ought to succeed and how. (I already wrote a long January 1st article about that, and it has been debated endlessly for the past year.)
I think you’re mistaken when you say that .COM is only preferred by “internet specialists”. Domainers and internet specialists are curious about these hundreds of new TLDs, whereas my startup clients are quick to sweep aside my name suggestions in any TLD outside .COM. They still react conservativelyl. I’m more flexible than they are.
Domainers have gobbled up nTLDs at a much higher rate than the general population. If we were to compare the percentage of domainer-owned nTLD domains to domainer-owned .COMs, I think we’d be forced to conclude that “internet specialists” are more preoccupied with new extensions than mainstream companies or consumers – who, as of today, are mostly unaware, indifferent, or unconvinced.
That may change. But there will always be a distinction between large patterns and small patterns.