A few days ago, I explained that without domainers, new gTLDs would/will most likely fail. Today, I’d like to take things one step further by trying to figure out whether or not the new gTLDs could be supported *just* via domainer registrations.
Let’s assume that only domainers will register new gTLDs over the next x years and that end users will appear afterwards. I know, it’s an over-simplification but humor me.
How many new gTLDs (excluding dot brands) will there be?
For the sake of this experiment, let’s say 1,000.
Let’s also go with an average domain registration price of $25.
How many registrations would it take to make a registry reasonably profitable at that price level?
Let’s say 3,000.
At a price level of $25/domain, this would mean $75,000 per year for each extension. Not an amount operators would be thrilled about by any means (since they had to invest quite a bit of capital upfront and at this rate, it would take a while until they recoup their initial investment) but still, most likely enough for an extension to be considered sustainable.
The question is: can the domaining industry support 1,000 extensions at this rate?
For an entire industry, $75,000 is not that much money but multiply it by 1,000 and you’ll realize that 75 million represents something completely different.
So again, can the domaining industry deal with a potential 75 million yearly cost?
I think it can.
Let’s start by simply looking at DNJournal’stop 100 sales for 2013.
By simply adding up the top 100 public sales, the industry “made” a little over $27 million.
Keep in mind that a lot of sales aren’t public.
Therefore, it’s reasonable to assume that the top 100 private sales generated a similar amount. For the sake of this experiment, let’s assume they generated the exact same amount.
Out of the $75 million needed to support all 1,000 new gTLDs, the top 100 public sales + top 100 private sales *alone* could account for $54 million.
If we were to add up each and every public/private sale (so not just the top 100) as well as the parking revenue generated by the domaining industry as a whole and all of the other arrangements (domain leasing, partnerships, etc.), I’m reasonably confident the final amount would easily be in the mid $xxx,xxx,xxx zone.
The average domainer considers $75,000,000 a huge amount of money and rightfully so but for an entire industry, a $75 million yearly new gTLD exposure isn’t an unfathomable scenario.
That being stated, I’d conclude that yes, the domaining industry itself could support all of the new gTLDs. Again, my example isn’t a PhD paper by any means, just a hopefully interesting way of once again making it clear that the domaining industry is a *far* more important variable in the new gTLD equation than meets the eye.