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…