I don’t want to be a “perma-naysayer” when it comes to new gTLDs but a lot of things about them leave me scratching my head… to put it mildly.

Here on DomainingTips, the #1 question I want to answer is not “Are new gTLDs a good option?” but rather “Are new gTLDs a good option FOR DOMAINERS?”

Because sure, for a Web developer for example, new gTLDs can occasionally be a good option.

Or really catchy new gTLDs can be a decent fit for a marketing campaign if you’re catering to a tech-savvy crowd (very important!).

But as domainers, the main thing we care about is the following question:

Is investing in these things worth it?

… and unfortunately, no matter which angle I try to see things from, the answer is a resounding “no.”

Look, there COULD BE situations in which new gTLDs would be appealing from an investment perspective.

For example, I’d love to buy domains like Chicago.Plumbing at a .com-level registration fee.

I think 8-9 bucks for Chicago.Plumbing, with the guaranteed renewal fee in the same range, would make the deal appealing.

In my opinion, three “ingredients” would be necessary to make new gTLD investments genuinely attractive:

1) The best domains should be available on a “first come, first served” basis: no “premium” prices, no auctions

2) The registration/renewal fees should be similar to those of dot coms or preferably lower

If those two conditions were met, we as domainers could say to ourselves that yes, new gTLDs represent an interesting investment from a risk/reward perspective.

But not only are those conditions NOT met, the exact opposite happened.

Let’s refer to condition #1, here are a few observations:

A) A lot of registries want to extract as much money as possible from their launches, so they price their best domains at the end user level, leaving only “meh” inventory available at the regular registration fee, domains which are NOT investment grade

B) Some registries reserve the best domains in order to perhaps auction them off later on, perhaps sell directly to end users, perhaps make available at premium prices down the road and so on

C) Some even do both of these things: reserve domains *and* implement premium pricing and/or renewals

As far as condition #2 is concerned, we have two situations for the most part:

A) Some registries choose to go with extremely high renewal rates and this makes domains no longer attractive from a domaining standpoint. At the $50 renewal level for example, I’d pay $250 over a 5-year period to keep that new gTLD domain, whereas a dot com would only cost me $45 or so. I would therefore much rather spend $200 on a decent “bread and butter”-type dot com and keep it for 5 years than invest the same amount of money in an average new gTLD

B) Some registries however do tempt people with low registration prices every now and then (low renewal rates are a lot more rare) but the thing is, they do it after literally all of the even half-decent names have been taken. Thanks but not thanks.

How many new gTLDs have been launched so far?

Hundreds upon hundreds.

Yet with each and every one of them, something was a tad fishy.

Maybe the best domains were offered at end user level premium pricing. Thanks but no thanks.

Perhaps the best names were reserved and only lower quality inventory was offered. Thanks but no thanks.

Perhaps the extension itself was not desirable. Thanks but no thanks.

Perhaps the renewal fees were too high to justify a “buy and hold” strategy. Thanks but no thanks.

At the end of the day, it all boils down to this:

Registry operators want to extract as much money as possible from their new gTLDs.

Hard to disagree with that one IMO and let’s be fair: it’s their right to do that.

Their business, their money, their right.

Absolutely nothing to comment.

The only thing that bugs me is seeing them pitched as good opportunities for DOMAINERS when it is clear that they are not.

We’re all professionals here, so I’d really appreciate it if registry operators were upfront. You can call new gTLDs decent opportunities for some Web developers, fair enough. Perhaps for some businesses or for some marketing agencies. Sure, no problem.

But please, don’t call them good opportunities for investors when it is clear they are not.

I think that’s a fair enough request.