Categorized | New gTLDs

Only Dot Club Has a Convincing Pricing Approach

Posted on 11 March 2017 by Andrei

Edited: Colin Campbell from Dot Club commented and made a clarification that we’re talking about the rate of inflation or 15% over *five years*, not per year, so a maximum of 3% yearly if the rate of inflation doesn’t exceed 3%.

After the Uniregistry price increase, various registries have released statements with the intention of reassuring domain holders but frankly, Dot Club is the only one that has a convincing approach for the simple reason that there’s more than just words behind it: they’ve signed a price protection clause with registrars which states that they’re allowed to bump prices by the rate of inflation or 15%. So unless the inflation rate will exceed 15% in the US (yikes!), at least .club domain holders know they won’t have to adapt to an increase greater than 15%.

The other registries don’t have a set-in-stone contract in place that prohibits them from bumping prices abruptly, they just issued statements which just isn’t enough because 6 months from now, they can say “Due to shifting market conditions, we have been forced to …” and bam, there’s nothing stopping them from sending prices to the moon.

Sorry but at this stage, statements are not enough when it comes to new gTLDs.

Rightside had the strongest statement, which included the phrase “…want to reassure our valued customers who have invested in our TLDs that we will not be following suit.” but still, it’s only a statement. Nothing set in stone.

Donuts has a weaker statement, which includes the phrase “we have no plans to increase prices for existing registrants” which I’m sorry but just doesn’t cut it.

And, finally, Radix has the weakest statement of all, which includes the phrase “We have no immediate plans to increase our wholesale prices.” and the obvious word that stands out is “immediate.”

No me gusta.

Bad, bad PR approach IMO.

For what it’s worth, I don’t own any Dot Club domains and stopped investing in new gTLDs a long time ago. The only new gTLD I own is Domaining.Tips (thanks to an awesome DomainingTips reader who gave it to me as a gift) which redirects to DomainingTips.com :)

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15 Comments For This Post

  1. ThcNames Says:

    I respect Colin Campbell and the .club crew. Still not buy any for investment, personal, or professional use.

  2. Andrei Says:

    @ThcNames: same here, I think they’re doing a good job and respect their professionalism. But since I’ve decided to no longer invest in new gTLDs a looong time ago, I have zero interest in the extension (or any other new gTLD for that matter) as a domainer. However, since a lot of my readers are interested in new g’s, I do my best to offer my input, blog about newsworthy developments and so on.

  3. R P Says:

    15% still material if per anum.

    Bought a batch of premium new Gs as a hedge against my .com portfolio.

    Was going to try to sell before I drop but don’t have the conscience to sell the domains to anyone (not unireg extensions) after this fiasco.

    The new Gs are now bad hombres. Just talking about the product not the people.

    One hedges as insurance. Don’t think new Gs are a good hedge for my .coms anymore.

  4. Rob Says:

    Thank you, uniregistry anytime a Inquiry says we will register a gtld they will get a link to your page with a 3110% price increase, and they will never touch a gtld again. Lesson learned

  5. Rob Says:

    Many of the .club sitting with $20,000-$50,000 asking prices are sitting in .com bins for $500-$5000 bins

  6. David A Says:

    Price increases are irrelevant. Strong hands pick up what weak hands let go. Domainers keep investing. If there is money to be made people buy. Look at .TV

  7. ThcNames Says:

    Yup lots of great Keyword + Club .com domains available.

  8. Rob Says:

    Andrei, you deal economics how can you have man made extensions seeking 4-5 figure renewals in a material world.

    The gtld world is a fairy tale, full of fairy tale characters

    Like the jig is up

  9. Andrei Says:

    @Rob: you most definitely can have man made extensions with 4-5 figure renewal fees in the material world. In fact, registries can even charge $1,000,000+ per year if they so choose. There’s just one “small” problem: supply and demand.

    Here’s a One Minute Economics video about supply and demand:

    https://www.youtube.com/watch?v=GqeRnxSuLFI

    The bottom line is this: yes, you can charge whatever you deem appropriate but the market can reject your “generous” product/service if it’s unrealistically priced.

    Can registries charge $1,000,000 per year? Sure.

    But how much demand is there for such domains? $0.

    In other words, if a company were to invest a lot of money to start a new gTLD and employ this business model, the market would punish it. Eventually, that company would either go bankrupt or adapt by charging less.

    In the world of new gTLDs, I suspect some kind of a balance will eventually be reached. Might take more time than people initially suspected though.

    All in all, I share your conclusion and am among the few domainers who went on the record early on (as of 2015), basically warning others that new g’s are just not worth it for domainers:

    http://domainingtips.com/the-post-i-never-wanted-to-write-new-gtld-conclusions.html

  10. Rev Says:

    Registry operators you can attribute to certain governments.

    When it comes to GTLD’s there is no democracy, they can take back the name, they can raise prices, they can suspend your domain, they can do whatever they want, when they want.

    People pay for security, regulation, and function, the gtlds provide none of this, and appropriately so I believe they are worth between $0.01 to $9.99 per year.

  11. Snoopy Says:

    Agree, .club sounds the only one that is serious, still the agreement was only 5 years so I’m assuming will only have 2-3 years to run. The biggest risk is if .club gets bought. What happens if Verisign or Radix or Uniregistry buy them? Potential for price increases will likely drive many future acquisitions.

  12. Rev Says:

    club spent to much of there first 2 years piggy bank on marketing. 50 cents wasn’t worth what they paid, they got lucky in year 3 with the whole China hype machine, padded the bank account down a bit, but the dollars are just not coming back, as fast as they rolled out.

    With so many other options, to be honest CLUB .com’s were never big sellers unless they were attached to monster keywords. Most hobby type clubs just use facebook, and such to communicate. Domainers are holding much of their inventory.

    I really think ICANN is going to have to intervene here, the complaints will come in, and what is going on, should no way be tolerated, as it goes against everything they actioned for in getting these extensions.

  13. Domain Observer Says:

    I would recommend that a registry should sign a contract with the relevant authorities declaring that it will only increase prices in accordance with the annual inflation for the next 100 years. Yes, 100 years. It may sound crazy to some, but it is not for the future of the registry.

  14. Colin Campbell Says:

    To be correct it’s the rate of inflation or 15 percent over 5 years. That would be 3 percent max per year unless inflation exceeds the 3 percent. The fact is we have not increased prices at all. Would be great if you could clarify in the article.

  15. Andrei Says:

    @Colin: post edited, thanks for making the clarification!

 
 
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