High renewal rates and revenues for premium domains.
On this week’s podcast I spoke with Tobias Sattler, the CIO of domain name registrar United Domains. He talked about the technical struggles of selling premium domains in new top level domain names. Despite all of these struggles, he said offering premium domains was well worth it.
New data provided to Domain Name Wire from new TLD registry Radix put the revenue opportunity in perspective.
Last year Radix generated $1.1 million in revenue just on premium renewals. (The company reported $1.76M in total premium revenue last year through November). Radix charges a premium price both for the initial registration and the renewal. This is a similar model to Donuts, but different from some registrars that charge only a one-time premium (e.g. .Club).
Only 1,348 premium Radix domains were renewed last year, so this is an average of $816 per domain. A registrar can sell 41 domains at $20 each and get the same revenue as selling just one premium.
Radix has millions of domains under management, but premium domains renewals (not even counting new premium registrations) made up about 10% of the company’s revenue last year.
Premium domains also tend to renew at high rates despite their higher costs.
Radix reports that 68% of premium domains that were due for renewal last year were renewed. If you look at it from a revenue perspective, 71% of premium renewal revenue was “renewed” last year. This measure puts additional weight on more expensive domains.
As with most domains, premium domains that were renewed once are more likely to be renewed again. 75% of premium domains entering their second or later renewal cycle were renewed. 79% of the premium revenue coming up for renewal a second time or later was renewed.
While premiums and premium renewals have been hotly debated, it clearly generates goodincome for registrars and registries. Radix is particularly keen on the premium renewal model.
Radix CEO Sandeep Ramchandani noted, “The renewal performance of 2017 has validated our decision [to charge annual premiums rather than one-time premiums]. The model also provides the entire value chain, including registrars, resellers and brokers; the opportunity to deliver long-term value vs a one-time transactional sale.”