Bidzos says it’s early to speculate about contract renewal, but cites two factors that might allow it to raise .com prices in the future.
Will Verisign be able to increase .com prices when it renews its contract for the domain name in 2018?
Verisign’s 2006 contract gave it the right to increase .com prices 7% in 4 out of the 6 years of its contract. It agreed to a similar deal with ICANN in 2012, only to have the U.S. Department of Justice step in and say that the new six-year contract shouldn’t have price increases. That fixed the wholesale price of .com domain names at $7.85 per year.
Speaking at the Credit Suisse 19th Annual Technology, Media & Telecom Conference in Scottsdale yesterday, Verisign CEO James Bidzos said it’s early to speculate about what might happen when the contract renews in 2018.
He then mentioned two factors that might make price increases more plausible in 2018 than when Verisign last renewed the contract in 2012.
First, in 2012 there were only a couple dozen gTLDs, plus the country code domain names. That has changed with hundreds of new domain name options now available.
Second, many of the new domain name options are priced at several times the cost of .com domain names.
Bidzos pointed out that the U.S. Government has found .com to have “market power”, and this has led to the price restrictions. The release of lots of new TLDs at higher prices are data points for people to think about going forward, but Bidzos reiterated that “it’s too early to say what will happen in 2018.”
Jason Franklin says
They should keep .com pricing the same, or if they do increase, only a slight increase to keep up with inflation would be needed. Wouldn’t ever want to see .com doing the $x,xxx or $xx,xxx premiums from the registry.
Although I am a new gTLD supporter, own many and want to see them succeed, and truly believe they will, ultimately I believe in the long run, the new gTLD’s that are doing the “premium” pricing at unbearable amounts for the common start up budget or even higher than some corporations will want to pay to renew every year will actually work against those registries in a bad way and the registries will be forced to lower those premiums to more reasonable pricing at some point, similar to the way that even .com and other legacy extensions dropped their pricing, from when they were first released. It would be one thing if the registries were selling the premiums at a $xx,xxx “premium” price out of the gate for the first buy, but then renewal would drop down within normal / average renewal rates, but I believe .com and many of the new gTLD’s who have priced their extensions within affordable ranges will be the true winners in the end. The gTLD’s who’ve priced every keyword domain at an ultra premium price, will have a harder time keeping those domains under registration in my opinion.
i don’t mind if they raise the price by 10 cents or so but otherwise wouldn’t agree with the price hike but what i really hate is that registrars often use it as a chance to up their pricing as well.
Let’s look at the reality of it.
1.) While there are new TLDs today (nTLDs), most companies are locked into .com and are not changing that. A vast majority of companies use .com. Even VeriSign’s Domain Name Industry Briefs show that.
2.) Previously there were hundreds of TLDs (gTLDs and ccTLDs), now there are over a thousand with the nTLDs. Barely any difference when it comes to the dominance of .com over other TLDs and how .com is the global leader.
3.) There are now more .com registrations than ever before! On a product that costs VeriSign $0.00 to make per incremental registration. VeriSign is extremely healthy and making insane profits today. VeriSign reported 92.4 million .com domains in its Q1 2009 statements, and there are now 123 million .com domains today. From just 2009 to 2015 that is a 34% increase in registrations that cost them $0.00 to maintain and give them a free, additional $245 million more dollars per year than in 2009.
4.) The backend costs of operating online businesses has gone down drastically. Bandwidth is a fraction the cost of what it was in 2006. And servers are now 10 times more powerful for CHEAPER amounts than they were in 2006. And VeriSign’s infrastructure is already in place.
5.) EPP has not changed at all. The core of what VeriSign does is built and in place. There are not drastic changes that need to be made every year from what we had in the past.
6.) The evergreen contract gives VeriSign a monopoly to run the .com extension. This is not open for a bid, of which many people have said they would do it for far cheaper than VeriSign. Bob Parsons said for $1. If the contract is not up for a bid, VeriSign holds a monopoly on the .com extension and therefore should not be allowed to raise prices when it profits enough already.
Interesting, he did not mention ICANN leaving American control. Is it because that is the real reason Com prices could rise?
.com domains should cost less than $4, as should all domains.
This has been discussed many times in the domain industry. It costs almost nothing to issue new domains. There is no viable excuse to raise domain prices whatsoever.
IMHO, by the time Year 2017 comes around, the new gtlds will all have come and gone. I give them all just a few more months before people realize they are completely worthless crap. I hope not, but Verisign may take advantage of this and pursue a price increase. I would if I were them.
FreshAvails.com (@FreshAvails) says
The price is going to go up. That is an unavoidable fact. Pricing has never been an issue outside of domainers.
The Department of Commerce should force ICRAP (ICANN) to open the bidding up for the .COM and .NET contracts. No reason why another company like Google, Amazon, IBM, etc. couldn’t run the registry cheaper.