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Without Domainers, New gTLDs Would/Will Most Likely Fail

Posted on 23 February 2014 by Andrei

In my opinion, domainers represent a *considerably* more important variable in the new gTLD game than most people think and through this post, I will try to explain why and what the implications are.

First of all, we need to see things from the perspective of the companies behind the new extensions. Lots of people make the mistake of thinking that running a new gTLD is simply a matter of paying the application fee and bam, there you have it.

It’s not.

Not by a long shot.

The barrier to entry is actually high and as a result, a lot of new gTLD players had to look for investors. You see, if you simply launch a project yourself and are well-funded enough to be able to afford the waiting game, there are no short-term pressures whatsoever on your shoulders.

But if you have investors breathing down your neck, things tend to become quite a bit more complicated.

Why?

Simply because a lot of investors have the habit of demanding results (as in money) as soon as possible. Therefore, there’s a lot of pressure on the shoulders of new gTLD operators to generate as much revenue as possible, as quickly as possible.

That’s when domainers become important.

You see, with each year that passes, we can be pretty much 99.99% certain that more and more end users will understand and get used to new gTLDs. Given the sheer number of extensions that will be appearing, it’s hard to believe consumers won’t get used to them eventually.

But the word “eventually” is quite tricky and investors don’t exactly like it.

Why?

Because even if we were to go with an optimistic scenario, it will take quite a bit of time before new gTLDs reach “critical mass” from an end user adoption perspective. Yet investors definitely don’t want to wait until that materializes.

They want to start recouping their investment at a reasonable pace right from the beginning. Therefore, new extensions need as much initial revenue as possible and in my opinion, that’s precisely why domainers are a far more important variable than meets the eye.

There are already lots of domainers who registered new gTLDs in bulk. Some paid 4 or even 5 figures for just one domain during the Early Access Program, for example. Some waited until the price dropped to three figures. Some waited until they finally dropped to two figures.

It all adds up and this revenue is far more important than most people think.

Without domainers contributing to this initial influx of capital, things could degenerate from all sorts of perspectives. Investors would become uneasy, the people running the extensions would lose confidence because they’re humans with emotions just like us and the list could go on and on.

The bottom line is this: new gTLD operators should definitely follow the domaining industry very closely because quite frankly, most if not all of them can’t afford not to :)

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2 Comments For This Post

  1. Domenclature.com Says:

    “The bottom line is this: new gTLD operators should definitely follow the domaining industry very closely because quite frankly, most if not all of them can’t afford not to”

    @Andrei,

    They should not only follow the domaining industry, they should respect it, and bring their wallets along to support it. Without domainers, they got nil.

    Good article.

  2. rathead Says:

    in the future… all of this will be in the past. there are no gtld’s that will be worth anything.

 
 
         
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