As registrars predicted, 2015 forecast was too rosy.
ICANN released its 2016 draft FY16 Operating Plan & Budget for the fiscal year beginning this July, and it shows weaker-than-expected new top level domain name results in the current year.
The group expects just $14.1 million in revenue from new TLDs for FY 2015 (which ends in June). That’s well below the budgeted $19.8 million. That $19.8 million number itself was a shadow of its original proposed forecast after ICANN slashed the number of new TLD registrations it expected.
ICANN’s final 2015 budget predicted 15 million registrations in new TLDs (down from 33 million in the draft). That’s about three times as many domains are currently registered with only a few months to go.
Registrars were skeptical of this 15 million forecast, and expressed concern that ICANN would make up budget shortfalls by getting more money from registrars. Initial low numbers from new TLDs were part of the reason for a hiring freeze at ICANN at the end of the 2014 calendar year.
For 2016, ICANN is proposing a $24.1 million forecast for new TLDs. Almost all of that is made up of the fixed fees registries must pay ICANN.
The draft budget proposal also sets a “high” estimate of 50% for new TLD renewals for domains registered in the same month the year before. It estimates 25% for domains that were given away for free.
Data I’ve seen for new TLDs that are hitting their one year anniversary suggests overall renewal rates will be much higher than this, at least for the full renewal cycle.
Keep in mind the 2016 numbers are just a starting point, and this is a draft document.
The slow rate of people buying and *using* the new TLDs shows that the demand for domain names (and those that relatively short) is much lower than they had expected. I’m sure the fact that all but less than one dozen of the 100+ new TLDs are priced at $20+ per year compared to the ~$10 for an only-slightly less convenient .com or .co is also hampering adoption.
PS,
Weren’t you going to do a “One Year of New TLDs” retrospect and renewal rate analysis?
“Data I’ve seen for new TLDs that are hitting their one year anniversary suggests overall renewal rates will be much higher than this, at least for the full renewal cycle.”
If it’s *at* this anniversary than the only renewal info you’re seeing is for sunrise registrations. Let’s see how much renewal activity is seen over the whole second year.
I’m referring to domains after the initial GA. But your point is likely correct: domains registered early on, especially sunrise and landrush, will probably have a higher renewal rate.
Everyone’s heard of “location, location, location” but now it’s “Pricing, Pricing, Pricing.”
It’s just plain Marketing 101. .Club got it right and look how well it’s doing. Wanting to quickly recoup investment and make a profit is understandable, but that doesn’t mean high standard pricing in this industry is going to work at all. It’s sad to me, really, because I like some of the new ones and feel they will most likely wither and languish on the vine unless the pricing is changed to encourage popularity and adoption.
P.S. Look what I wrote here just the other day: https://domainnamewire.com/2015/03/10/this-weeks-new-tlds-mo-money-mo-domains/comment-page-1/#comment-2231377
I smell the aromaric scent of death eminating from the gtlds. They will be gone soon. RIP. They never had a chance.
You can’t possibly believe that.
I read the sales charts daily and the sales are ALL DOT COMS all the others will have a bunch of broke domainers, with no new car and no new house and no money.
I think all of the gtlds will .fail before 12.31.2016. They all seem so st.ooo.pid and .cheesy to me.