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.Club: An unprecedented look at a new TLD’s financials

.Club CEO Colin Campbell shares his company’s 2015 financial performance with Domain Name Wire.

dot-club-big-logoDuring a domain name session at WHD.usa yesterday, .Club CEO Colin Campbell talked candidly about his company’s performance, including that the company lost about $1 million last year.

I chatted with Campbell afterward, and he offered to openly shared .Club’s financials with me.

.Club generated $7.0 million last year on a bookings basis. $4.5 million of this was from registrations and the other $2.5 million from premium sales.

The company spent over $8 million last year, resulting in a loss (on a bookings basis) of $1.1 million.

In other words, the company is having to spend a lot of money to make .Club a success.

The biggest expense wa marketing at $5.75 million including employee expenses. A substantial part of this marketing expense is shelf space at registrars.

Front page placement and search results placement at domain name registrars don’t come cheap.

Campbell explained:

A substantial portion of our marketing budget is allocated for distribution including Registrar placement/incentives. Each registrar is tracked based on a cost of acquisition (COA) criteria using registrations and renewal rate. If target (COA) are not met with the registrar we reduce funding, if exceeded we ramp up. Due to the delay in tracking renewal rates we build estimates based on usage rates.

The other big line item for .Club last year was $1.15 million for backend registry fees and commissions on premium sales.

It’s clear that it takes a lot of spending to build a brand and enthusiasm around a new top level domain name. This is noteworthy to outsiders looking in trying to understand what it takes to make the new TLD model work.

Campbell predicts this big investment to pay off.

“I am confident .CLUB will break even this year and begin to move to profitability in 2017 making us a truly viable new domain extension and more importantly a global brand,” he said.

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  1. Ryan says

    Much of .club bump in revenue was the hype out of China all TLD’s saw in 2015, rest assured that cannot sustain itself.

    If they can manage marketing, along with salaries which many tech companies struggle with, they might be in the black. Premium sales will also help them along the way.

    New releases will hurt them, and when some of those Chinese speculative registrations start dropping also, unless they are renewing them for $1.

    2014 they would have lost alot more money, along with what they paid for .club, whisper number was $5M.

  2. Zhang Hao says

    Losing a whopping $1,000,000 last year……
    QUOTE: .Club CEO Colin Campbell: “I am confident .CLUB will break even this year and begin to move to profitability in 2017 making us a truly viable new domain extension and more importantly a global brand,”

    Will Chinese speculators pile out of this domain, or pay the renewal fees and stay in?

    Let’s all make a diary note May 2017 to look at this prediction. We will be back.

  3. Rupert says

    We all need to read again what he said. The word Colin Campbell used was CONFIDENT which implies almost close on certainty.

    .Club CEO Colin Campbell said “I am confident .CLUB will break even this year and begin to move to profitability in 2017 making us a truly viable new domain extension and more importantly a global brand,”

    If my company had made a £1million+ loss, I’d be scared shi*less!!!!! So, if it all goes pear-shaped and goes bottom-under, it won’t exactly look good for Colin Campbell on his c.v. if and when he goes looking for another job.

    And if it all goes under, where would this leave all the registrants of .club domain names?

    It’s all very sad really because .club was acclaimed to be a success, but we now learn that .CLUB has a $1,000,000+ loss, so not sure if that rates as a success Where does that put all the other wanabee new gtlds?

  4. Joseph Peterson says

    Some nTLDs with smaller footprints than .CLUB might be profitable on a small scale. But the primary challenge for any registry is to raise enough awareness to be accepted by the mainstream public. I mean both quantity of developed websites and quality brands with real visibility, staying power, and “cred”.

    nTLDs that remain quite marginal may ultimately struggle to stick around at all. In contrast, .CLUB is building itself up to the point that a mainstream audience will, sooner or later, actually visit .CLUB websites.

    Colin Campbell has been very aggressive in gaining a foothold. Without that foothold, when the tide goes out, some nTLDs will be swept far out from the shoreline … and when the tide returns with new TLD competitors, drowned.

  5. Zhang Hao says

    Well, now as we are talking about tides.

    In periods of overexcessive excitement and irrational light-headedness, like when “CHiPs prices soar through the roof”, to quote John F. Kennedy “a rising tide lifts all boats”.

    However to quote Warren Buffett “Only when the tide goes out do you discover who’s been swimming naked.”

    .club may survive, but for some others will it end in champagne for all, or maybe just the few who managed to get out early, or will there be tears before bedtime?

    To quote Doris Day, “Que sera, sera”.

  6. John Colascione says

    If I had to take a guess, with all the new gTLDs hitting the market, this year will be worse then the last. .Club will probably have no choice but to scale back investment and start watching the looses add up.

  7. PJ says

    Some valid and reasonable points made in the comments section. Am genuinely confused though why so many domain name readers are negative about the subject itself though? Is the argument that a domain name can only ever be .com or .co.uk etc?

    • Joseph Peterson says

      @PJ,

      I don’t see anybody in the comments here arguing against nTLDs as such. Some domainers do take that extreme view. But I think what you’re noticing – all the negativity – is just the same schadenfreude that pops up in online comments all over the internet, whether it’s underneath a Youtube clip or a picture of a celebrity’s new haircut.

      Mainly this is about the challenges of running a startup registry, raising public awareness for a new product, and gaining traction with nTLDs.

      If some people take a pessimistic outlook, that doesn’t necessarily mean they’re opposed to nTLDs. Speaking in general terms, some are hard-line .COM purists. But many own plenty of nTLD domains, actually; and they’re simply frustrated by the slow pace of public adoption. Personally, I’m more pessimistic about other TLDs and think .CLUB is doing a pretty well.

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