It was five years ago this month that the first domains under the new top level domain (nTLD) program started rolling out to consumers. The first Latin script general availability domains came out in early February 2014.
Remember .guru? .Plumbing? Yeah, that was a long time ago.
Here’s how I’d sum up the first five years of new top level domains.
Demand and artificial demand
Registration numbers for new TLDs have not met expectations for just about anyone who put money into it. That includes the many registries that spent millions acquiring strings as well as ICANN.
I thought new TLD applicants were very bullish, but even I was surprised when the first sunrises got only a couple hundred registrations.
Applicants should have understood the market size better. People were looking at registrations in .com and predicting market size for new TLD strings but many applicants expected some magic demand to come out of nowhere. The reality is that there are only so many people creating a website at a given time. They’re going to look for a .com or ccTLD name. If they don’t get that then they might consider a new TLD. So new TLD demand for people creating websites is a subset of total site creator demand. Without a catalyst for more people to create websites, demand won’t shoot up.
Of course, if you look at the headline registration numbers, some domains seem to be doing really, really well. .Top has 3.8 million domains in the zone and .XYZ has over 2 million.
But we all know at this point how these numbers were manufactured. A lot of registries took the “fake it til you make it” approach. They boosted their numbers through giveaways (and near giveaways).
This worked in some respects. .XYZ got a lot of attention when companies saw its numbers take off. Some companies used .xyz domains as a result.
Cheap domains have a downside, though. Spammers and criminals churn through domain names so they like cheap ones. There’s a fairly tight correlation between domain price and quality of a namespace. Unfortunately, the bad reputation of some new TLDs has given new TLDs a bad rap overall in security circles.
The reality is that registration and usage growth should be slow. I wish there was a catalyst for domain demand to shoot through the roof but there quite simply isn’t one at this time.
The earlier the better
.Guru still has over 60,000 names in its zone. It would have a fraction of that if it came to market later.
Until .app, .guru has the most pre-orders of any domain at GoDaddy. I don’t think anyone would look at the total pool of new TLDs and suggest that .guru belongs where its numbers put it.
It had first-mover advantage among “generic” new TLDs.
Speaking of which, this might be why some people had unrealistic expectations for new TLD registration numbers. They looked at .co and .xxx and extrapolated. But these names did as well as they did because they had very little competition. They had an advantage that most new TLDs don’t have. The environment has changed.
The earlier new TLDs also had an advantage because domainer wallets weren’t tapped out.
Crazy auction prices
I understand companies paying millions of dollars to acquire strings before we had a good idea of registration volumes. But I was perplexed as contention set auction prices continued to soar even after reality set in.
How can anyone justify spending $10M plus on a string that has a possible “real” registration base of 10k-20k domains at modest prices? Some of these acquisition costs will never be paid back. Even on a ten-year payback, that’s a horrible investment.
I realize that registries got cash infusions by losing contention set auctions but it doesn’t make sense to blow that cash (real cash in the bank!) on other strings just because you got a windfall.
What does Verisign think?
As it turns out, new TLDs had little impact on .com. But it was shocking when Verisign sued XYZ for some of the comments it made about .com and how well .xyz was doing. (Verisign lost.)
That lawsuit was the first big indication that Verisign had concerns about the impact of new TLDs on .com. Its messaging changed during the lawsuit when it said actually it was .net that was hurt. I’m still a bit confused what this lawsuit was all about. I’ve heard people say it was Verisign’s effort to shut up new TLD folks that were bashing .com. I don’t know. I don’t understand many of the decisions Verisign makes.
IDN transliterations of .com are a dud
There’s not much to say here. The idea that .com transliterations would make IDN.com domains worth a lot was flat-out wrong.
Amazon’s slow roll
Amazon made several surprising moves with new TLDs.
First is that it applied for so many. 76.
Second is that it didn’t plan to open them up to the public, at least at first. That changed when the community got upset about “closed generics”.
Third is that Amazon has done so little with its TLDs. Why hold these strings only to neuter them with over-the-top restrictions? I realize Amazon is a big company and these domains won’t move the needle, but the company could get an ROI on some of them by selling to other registries. If they don’t have plans for a string in the next few years, why not shop them?
Registry technical service costs fall…a lot
One new TLD operator told me he thinks the technical backend registry cost of first-year creates is headed to zero. He might be right.
There are so many competent companies providing registry backend technology. They bid aggressively to win contracts with cut-rate pricing.
Of course, the registry for .com domains still gets a whopping $7.85 per registration. And that might go up soon.
Donuts
No discussion of the first five years of new TLDs would be complete without mentioning Donuts.
The company applied for over 300 TLDs. It bought Rightside and now has about 240 strings in its portfolio. Last year it was acquired by private equity firm Abry Partners in a competitive process.
Let’s face it; Donuts did it right. It understood how contention sets would be settled and how to play this game. Its massive portfolio approach smoothed out its “bad” TLD choices and its overhead is spread out over hundreds of strings.
Even though I’m sure Donuts didn’t hit its best case forecasts, its founders made the smartest play in this round of domain expansion.
What’s next?
We’ll see more consolidation in the new TLD space. This will speed up as more TLD operators face reality. There will also be another round with some twists and new rules. It will be a while, though.
That’s my take. What do you think?
The whole program will probably go down as one of the best examples for misalocation of private funds in the last decade..
Result: Some fat cats at ICANN got even fatter, took these poor suckers for a nice ride and are now laughing all the way to the bank. 5 years of orchestrated hype and fake demand are coming to an end.
Result: An enormous damage to the industry as a whole, and a confused consumer base. There was no need and no demand from the very beginning. It was all staged by business guys who thought they paid ICANN for a license to print money. How much cash did .xyz spend on marketing in these 5 years? How much did Donuts spend? How much Uniregistry?? What did you guys get for that money? Maybe 15 million REAL registrations that were not part of these constant 1c or 99c promotions? That about right? Congrats! The German .de registry has 16 million (!) names under management. No promos, no nothing. You know how much money the .de registry spends on marketing? ZERO. Because there is REAL demand, real users and real usage…
The demand was simply not created (not because there isn’t a demand) because the public is still unawareof these nTLD’s. The problem is the industry lives in a bubble and as long as they continue to do the same programs of throwing money at the channel through marketing programs to only find many channel partners selling the TLD at a reduced price. There is no value created to be tied to the TLD for the partner/applicant/registry/registry backend providers (also culprits for not extending their experience running and growing legacy TLD’s they are stewards for) to leverage to identify growth opportunities within their base of customers or to market outside of their base into new markets or new channels. You can’t exorct the channel to create the value or promote the value when they didn’t invest in the TLD the applicant did, moreso, asking them to flex the same muscle legacy TLD Registries have done for years – that muscle must be fatigued, especially with the operational burden of onboarding many TLD’s.
The onus is on the registry to provide the value to the channel and direct them based on their respective business models on how to grow the zone and value to each customer to that the renewal risks beyond Year 1 is reduced. Volumes do not say as much as the quality of registrations do to measure success.
NTLD’s were created for a reason because there was a need and these ntld’s, many have a purpose so you can’t compare them to legacy TLD’s. For a while now, all the major players have made the money they have, as long as nTLD Registries do not apply creativity to reach the public, there is no reason for any change. I understand domain investors are into .com because they follow the traffic(not all – I understand there are different models to domain investments) but the oppprtunities are there to be creative with nTLD’s, to work with new channels, to reach the end users who are not yet aware of these TLD’s. I would start by figuring how much of an effort was invested into extending that reach out to the public versus measuring volumes of registrations to measure success.
New tlds sell badly, there is almost no demand and they were not needed in the first place. Throwing even more marketing dollars at a poorly selling product won’t help.
.club paid 50 cent to or promote 50indclub dot com lol
Most can’t afford to market anymore and are looking for handouts from icann in waiving fees
The only money made was gaming the auction losses, how sad is that.
There’s a total level of demand out there. New TLDs don’t expand the pie of demand that much. In order for new TLDs to grow they necessarily have to take some market share from legacy domains and ccTLDs. So perhaps they can market themselves to get more of the pie, but I believe many TLD operators found that this isn’t economically feasible.
Should Donuts market its individual TLDs? I’m not sure it would be profitable. I hope they do more of this, but I’m not sure it makes business sense compared to working the channel.
Nice overview Andrew. Another failure of the program are the so called .BRANDS. Advocates will point to a small handful of companies who are actually doing something as success but the whole picture is much different. Hundreds of brand TLDs lie fallow with no more than a small handful of domains and nearly 40 have called it quits by terminating their contract. It baffles the mind why some are pushing for the next round to happen ASAP when its clear the first round has been such a disappointment.
Well said, TJ. ‘Tis clear to me that the entire gtld program has been one big fat .FAIL yet some fools (and unethical tld promoters) still want a second round. Why? So more companies and consumers can lose more money? Smell the coffee people. The gtlds are the modern equivalent of fool’s gold and will never have any real worth.
It’s a failed tech product, comparable to Segway, MS Zune or smokeless cigarettes.
Many failed products are still selling 20 years later (but in much smaller numbers than initially expected). In terms of these extensions going mainstream…..that ship has sailed.
The ship never left the port.
Actually, the gtld ship left the port long ago. It didn’t get very far and sank in the harbour. Everyone on board and involved was a casualty. Seemed so obvious that it was destined to happen that no one even noticed or seemed to care. Strange to me that some still try to promote the new gtlds and that others even suggest a new round. Might they have financial motives?
Spot-on, Andrew.
Thanks for putting the domain Industry behind by 5 years Frank, Paul, Monte among others. What a waste of 5 years!
The domain Industry is just starting to rebound now.
Hey all these guys are still banking their dollars on .com
Funny enough!
Exactly!
Garbage all Garbage. stupid tld investors will be going door to door selling avon once they drop their tlds.
Since people and companies can be fine with .net and .org, I don’t see why they can’t be fine with new gTLDs. It just takes time for them to get accustomed to it. So I think new gTLDs are still potential and worthwhile alternatives in many cases.
It isn’t simply a case of “just getting used to it”
The big problem is a fractured approach to selling GTLDs to the public.
Premium registrations.
Premium renewals.
Varying requirements to register (possibility of domain registration being canceled)
Failure to promote value to the consumer.
Trust issues.
The assumption GTLDs should be doing as well as .com … GTLDs are very much a gold standard for a niche market that needs to be developed and proven.
Overcome these obstacles and GTLDs would be doing better
Ethan, I definitely predict registrations and usage of domains ending in new TLDs to increase over time. This will be hard to see in the numbers because the topline registration numbers have so much noise with cheap registrations. But usage will increase. Probably not a hockey stick though.
Because new TLDs are an alternative to an alternative. They’re the worst possible option with premium pricing, unpredictable renewals, and no user familiarity. If I can’t have .com, sure maybe I can “be fine with .net and .org” but not a lot of companies will go another rung down to an unknown nTLD
5 years was the timeline most of the cheerleaders gave to make this work, the 5 year mark has come and gone and check out gtld.link their forum is a ghost town, and Phil Harris is nowhere to be found. Last I heard he was selling cars somewhere in the Midwest, what a nightmare this process has been for so many, can’t imagine how many divorces this caused.
1 big divorce!
Hey Mike,
Just a little update . Still selling the new Gtlds , just sold another 6 figure .
As far as selling cars in the midwest . Yes My wife and I have owned the same chevy store for over 14 years . We have a great team running the store in northern il.
We have actually live in northern Wisconsin.
Just talked with a few of the early adopters , yes it was much longer than 5 years but it looks as though web3 has taken an interest in the non .coms
Hope all is well
I predict all (yep, ALLLLLLL!) gtlds to be completely gone within 6 months, maybe less.
My projection for “Project dotVinum” in 2009 (.VIN – .WINE and .VINO) were 30,000 in year 3 for .WINE. We are almost in year 4 after delegation and registration figures for .WINE are 14,688 : that is half of my projection. There were 3 applicants for .WINE and the winning one turned out to be an American company. I am confident that the number of 30,000 registrations could be reached if .WINE and .VIN had a communication strategy on the French market, which has a strong Wine culture.
Andrew, you are absolutely right, its .com and cctlds that are here to stay. These ngtld promoters totally focused on providing an alternative to .com and in the process failed to account for the market that cctlds have already gained or are gaining.
It takes a village to promote any tld – not enough resources to promote any of these in a meaningful manner. Most countries have their cctlds to promote through multitudes of government and non government entities as well.
At the end of the day its end users, eye balls and the TLD brand equity.
Just like .biz and .info are still around, many of these new tlds could be around in periphery with no seat at the table
Keep in mind that .Biz and .Info are great businesses for their owners, though
Why are you still calling them new? They need a new name. Crap TLDs. Money Grab TLDs. Unestablished TLDs.
Hey guys did you know if you have a 5 year old car, you can still call it BRAND NEW!!!!!! It’s like the New Gs!!!!. Your 5 year old car is still totally NEW. Do you have a 5 year old kid???? That kid is also still a NEW BABY!!!! Just like the New Gs!!!!. Have you been at your other job for 5 years???? Congrats on your NEW JOB!!!!!
I’m not sure what point you’re trying to make, but I’ve never heard someone refer to a five-year-old car or job as new.
If something five-year-old is not new, how come the title of this post is “New TLDs, five years in” ? Why are they still being called new all through the article? They are new like a five-year-old car is new.
I see what you’re saying now. I think we’ll call these new TLDs until the next round comes out. I don’t see that changing.
Okay, got it, anyway since old things are new. Congrats on your new blog!!!
Making a blanket statement about new TLDs being a success or failure misses the point. There have been successes and failures. Donuts was a success. They print cash. Early shareholders did well in the exit. It took longer than many probable expected (mostly thanks to ICANN delays) but it was a sound business model.
I did not know Dr Jon Postel well enough, but I did talk with him at the IETF in Cambridge about new American Indian TLDs. I predict that he would never have let this new TLD process happen.
There were ZERO New TLD’s registered 5 years ago and now there are 26 million. That’s ahead of the estimates I heard openly discussed pre application reveal-day. I estimate in 5 years there will be 50 million
Uni is going to sell in the vicinity of 10 million dollars in new TLD extensions without freebies or discounts this year. More new registrations keep coming on.
New TLD’s keep getting adopted by mainstream companies and entities as marketing tools/vehicles and seen in the wild in advertising and media (just like .com in the late 90’s)
There will be a “round two” of New TLDs – and several people who openly talked down New TLDs have privately approached me about applying for and running their own strings. There will be hundreds of new applications from individuals and perhaps 600-1000 from brands once the window to apply reopens (depending on the terms and criteria ICANN stipulates for round 2+). If Icann keeps the window open (as I think they should) then an industry will form coaching and coaxing all brands to get their own TLD.
New TLDs are selling on the secondary market. You can see public examples at the Namescon auction. Even if a name sells for $500 in a namescon auction that’s $500 less getting invested in. .com/net org or CCtlds
I think at the end of the day, everyone who runs a TLD quietly hoped their string would be a breakout extension with millions of registrations like .com. That there would be a groundswell of uptake that would elevate their extension into the mainstream — and if there is disappointment it relates to the fact that it didn’t happen that way. There were too many strings, competing for a curious but stunned audience and the distribution network of registrars 4-5 years ago simply wasn’t up to the challenge of delivering these products at scale. It was too much work for a distribution network that wasn’t;t ready and wasn’t sure.
That said, today we have a multimillion dollar cashflow stream that essentially cost us nothing — and now that the spotlight has gone out and the euphoria died off, these extensions live, they keep getting registered and the pile of “paid registrations” (not the freebies) keeps growing like a little engine that could.
Time is on the side of all New TLDs and each year makes them stronger. When I started domaining you wanted the .com and needed the .net to cover it. Today the .net has been marginalized by a new TLD version of the .com in 10 years the New TLD will further marginalize the .com .. As a domainer I’m investing in .com names, registries of new tad’s and specific new TLD names at the top of the top.
To write TLDs off as a failure when they have been anything-but is like being a climate change denier. You’re right in your mind until you die of old age and get proven wrong in the end because the reality is what it is.
50% of those 26m registrations were 1c promotions, 99c promotions, monthly promotions with a 80-90% discount.
60% of the registrations are parked, 2m registration are pending delete…
Registrations peaked 15 month ago, now registries are asking ICANN to waive fees. Why would they do that if user growth and cashflow is so strong?
I have to tell you, no matter how this nTLD thing plays out, but to compare critics with climate change deniers is a pretty bold statement.
Frank, you make some fair points. But using 26M as a headline number is a mistake. You know that millions of these are bad registrations. Pointing to that number I can say that new TLDs peaked in 2017 and have fallen since then. There’s a lot of noise in that number thanks to spammers, scammers and cheap domains.
Most of the business plans I saw had defensive registrations such as what happened in .asia, .info and biz as main drivers of total domains. That would generate a cushion in the vicinity of 100k DUMs from where to get marketing money to focus on growth beyond that into registrations for actual use. I haven’t seen any people actually comparing to .com in their plans, even though they might say that as a sales speech…
… but as mentioned, this worked before when the number of TLD launches were small, like one a year tops, average of one every couple of years. But if this defensive rush really happened, new gTLDs would be hated to eternity for making people spend money they didn’t want to… and the easy money would make registries not care of actually making good for registrants.
Tsk, tsk Frank. As a reminder, you yourself used to regularly point out that .COM is the real estate of the internet. Myself and others got into domaining after regularly reading your terrific Seven Mile Blog which used to preach .com, .com, .com. You regularly used to warn your admiring readers against those who try to sell dot JUNK. Then, one day, you seemingly saw an opportunity to make mega money and suddenly, .com became “like the AM radio”. You veered a sharp left while your .com followers continued on the main road and left you standing butt naked, alone in the gtld wilderness. Since you seemed so confident, no one wanted to point out you were in your birthday suit, but the Empirer truly was in the altogether.
As a reminder of your own words, here is the 7/19/08 entry from your 7 Mile Blog:
“The supply of meaningful and generic domain names is tight as a drum today. In an effort to increase revenues for itself and to simultaneously ease that demand, ICANN plans to start entertaining proposals for new namespaces in about a year’s time. I predict this will do little to quell the desire for meaningful .com, net and CC TLD names. Corporate IT departments overwhelmed by the task of managing existing .com typos simply won’t be up to the challenge of managing a corporate GTLD such as .COKE or .IBM. Even with the help of a presently absent killer app from the likes of Godaddy, Enom or Tucows such sideshows will be an uphill push in a recession year. If my hunch is correct then .web .blog and other new .extensions will come to pass and they will marginalize the .info, .us, .eu, .asia and .mobi namespaces just as those namespaces relegated .ws and .cc to obscurity before them. I predict that .com and other established namespaces will continue to thrive with some very minor marginalization at the fringes . The failure of former would-be contenders such as .travel, .biz and .pro to satiate demand for coveted names, shows us that adding more skim milk to the mix will not stop the cream from rising, and that cream is .com.”
And, on the same day, you wrote this gem too:
“Some domain sellers suspend this law of physics by baiting and switching — taking buyers who are looking for XX.com domain name because it has meaning, resonance, gravity, traffic and switching them into Y-Y.info domain name because it “feels similar” or costs one tenth / one-hundredth as much.” (7mile.Com/July 19, 2008)
http://web.archive.org/web/20080719163844/http://www.7mile.com/
Great stats provided with the exception of one not considered that some might want to take a look.
Since the comps are viewed from a .com perspective,
How many regs did .com have year 5?
How many were spec?
How much advertising was invested in .com early on? The next 20 year’s?
VeriSign AND registries.
How much competition did .com have in the first 5? 10?
.net year 5? Yawn…. Year 20? Yawn….
How often do .coms go on sale for 99 cents the first year regs?
How many years did the speculators hold worthless .coms before the values became outrageous? (10+) And how many ?
I do see more new G’s on bldgs every year here out west.
It takes at least 5 years for any new business to establish a steady customer base, become known by use, value of product and advertising.
26 mil renewals does suggest a viable market for some going forward considering the enormous competition base.
.com ? There was a lot of noise in it’s numbers for a very long time.
Would it be what it is today with the same amount of competition from the start? Highly unlikely.
Ford was the first large scale auto producer. How many different autos ?
First computer maker?
Beer brewer?
Cell phone?
AOL? Yahoo?
There all still around and the new players are thriving.
Some new G’s will survive, some will thrive and some will die just like any other monopoly breaking product in their respective markets.
Cheers