How new top level domain names progressed this year.
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 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.
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.