Categorized | Domaining Tips

Can (and Should) Failed New gTLDs Be Saved?

Posted on 29 March 2017 by Andrei

After three or so years, it’s blatantly obvious that for a lot of extensions, there just isn’t enough demand. Realistically speaking, registries made a mistake by being too lenient when it comes to choosing terms.

Why on earth would someone think there would be adequate demand for a .horse extension? Or for a .blackfriday extension? Or hold for a .whoswho extension? Or for confusingly similar extensions such as .law, .lawyers, .attorney, .attorneys, .law and .esq?

My best guess is that registries envisioned scenario in which everyone in the world would be welcoming all of their extensions with open arms. Needless to say, that didn’t happen. Are end-users adopting new gTLD? Of course, and as Andrew from DomainNameWire mentioned, there’s no way to go but up when it comes to end-user adoption because you started from zero. But this and user adoption is going way too slowly and its effect is diluted among hundreds upon hundreds of new gTLDs.

So, what needs to be done?

The first option would be having ICANN rescue all failed new gTLD’s. There’s already a mechanism in place to do this and it’s not like ICANN are on a shoestring budget. If anything, ICANN has been the main beneficiary of the entire new extension craze. Think about it: a lot of registries are losing money, domain investors are losing money as well but ICANN has made a killing through their high setup fees as well as through the annual fees they are receiving which amount to $25,000/year if memory serves me well.

The second option would of course be selling all of the under-performing extensions to a bigger company or to someone else wants to buy them. But again, no matter how good the registry might be, there’s only so much you can do with .horse, .blackfriday, .whowho and so on. There isn’t exactly a lot of potential floating in the air. Therefore, I just don’t see this working unless ICANN creates some sort of a special status for failed extensions which perhaps involves them no longer charging a yearly fee or charging a considerably reduced yearly fees for them.

The most problematic aspect about these two options is represented by the fact that they are bad business. They are bad business because they allow extensions which should have never been launched in the first place to continue existing. However, the main positive aspect is the fact that at least the extensions will be alive and existing domain holders will not suffer.

Which brings me to the third and final option I’d like to address. Letting the bad extensions fail. Again, the main drawback is represented by the fact that current domain holders will end up suffering. However, there might be a silver lining in that you are at least cutting your losses right from the beginning. If an extension is to fail anyway, then perhaps it’s a better idea to just give it a quick death than prolong things. As such, the third option would basically do just that, give failed extensions a quick death and by doing that at the beginning, at least you limit the number of domain holder casualties, so to speak.

What do you think? In your opinion, which of the three options represents a better choice or if you have another idea in mind, feel free to share it.

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4 Comments For This Post

  1. David A Says:

    I really don’t think any extensions are going to fail, for several reasons.

    1. the registry has the ability to relaunch a space with slow uptake at higher prices. This ability to change assures that minimums will be met, renewals paid and money made, even if only a small margin in some spaces.

    2. Think your 2 letter .com is valuable? Ultimately GTLD’s are very scarce and there will always be another operator who thinks he/she can do better. Rights will get sold and new money applied to make all existing spaces successful, even if only on the margin.

    3. A space is failed when the registry runs out of money not when a domainer declares it un-investable. In a strange way, for some of these spaces, keeping domainers ‘away’ may be exactly the right answer. Higher prices will keep the speculators out and make a GTLD more exclusive.

    In 5 years we’ll probably see some spaces with just 600 registrations at $300 a year, which are more profitable, more abuse free and better run than extensions with 50,000 registrations at $3

  2. JR Says:

    The 3rd option is the best option. Establishing a ‘Too Big Too Fail policy’ is usually bad for economies and it is bad for domain names. Besides Rick Schwartz, Howard Fellman wrote a great article on the topic back in 2014. Everything he put on record is unfolding. 2017 is the ‘retail Apocalypse’, Sears, etc. are closing, nGTLD bubble is popping, and Chinese CHIP craze is subsiding. Who benefits? Premium dot-com owners. 2018-2020 will be a gold rush feeding frenzy for generic one-word domain names with commercial meaning that are not already owned by corporate America. After that, I see politicians doing the biding of corporate America by over-regulating the domain names, establishing a federal law making them property, re-setting the rules at ICANN by hook or crook, and passing more severe trademarking laws. Letting the nGTLDs dies a natural death is best.

    https://www.linkedin.com/pulse/20140519231432-92568989-domain-name-train-wreck-ahead-why-the-gtld-program-may-not-succeed

  3. Snoopy Says:

    Lots of them will go under. Expect registries to start moving into ICANN’s emergency system over the next couple of years. Simply being in that phase will be another big hit for those tlds and a good chunk simply won’t be worth running. Nobody is going to want to run dozen’s of failing tld’s with 50-100k revenue, that isn’t profitable.

    As far as an Icann bailout, fat chance! They aren’t silly.

  4. Jovenet Consulting Says:

    Registry solutions are not to try selling domain names anymore through the registrar channel but finding ways to monetize them using their own registrar accreditation. Even Premiums are hard to sell for niche registries.

    WHOSWHO is a directory: did you notice that Dmoz just closed its doors (http://www.dmoz.org/)? A solution for .WHOSWHO is to think on a way to monetize a new version of Dmoz (investment required).

 
 
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