In my opinion, the costs associated with new gTLDs will gradually be lower and lower. Therefore, running a profitable registry might end up being easier than you think.
Right now, the costs are definitely prohibitive (6 figs at the very least if you want to run the business on a shoestring budget and if not, 7 figs) but the main advantage is that well-funded companies can secure the best extensions.
As time passes though, the costs will be lower and lower in my opinion.
I’ll even go as far as to say that as of a certain point, becoming a registry will end up being *almost* as easy as registering a domain.
I know it sounds crazy but think about it: technology will make it easier and easier to get started and therefore, there’s no way the costs will remain this high.
The big boys, at the current costs, can claim the best extensions and some domainers think they’ll have a hard time being profitable.
At the beginning yes, I agree.
But once the costs go down, profitability most likely won’t be that much of a headache for the companies which were savvy enough to stick around.
Again, I know some of you will think I’m crazy but I firmly believe that in the not-even-so-distant future, becoming a registry will end up costing less than 5 figures.
In the slightly-more-distant future, who knows?
I’m not trying to say all of this will happen tomorrow.
It won’t.
What I’m trying to explain is that when analyzing new gTLDs and their perspectives, assuming that costs will remain this high would be a huge mistake, a mistake which can render all of your calculations irrelevant.
November 18th, 2013 at 3:59 pm
You are trying to solve a problem that doesn’t exist. There is simply no demand for gtlds, whether they be $185K or discounted to less. Need a good name, go ahead and buy a .com from the reseller or dropped market. There are plenty available. If someone has the one you want, I have a suggestion – make arrangements to buy it from them. Gasp –capitalism!!! You have no entitlement to a good name just as you have none to an oceanfront home in California. Sure, one would be nice, but no one on this planet owes it to you. Americans have gotten to be fat and lazy with a sense of entitlement. I am here to tell you it just doesn’t exist.
November 18th, 2013 at 4:17 pm
@Uncle Sam: the market will ultimately decide whether or not there’s room for other gTLDs.
Some domainers believe new gTLDs don’t stand a chance. In their assessment is indeed correct, the market will prove them right and we’ll see lots of bankruptcies among registries.
Some domainers think most new gTLDs will do well. If their assessment is indeed correct, the market will prove them right and we’ll see no bankruptcies or almost none.
Some domainers like me think the truth is somewhere in the middle. In other words, they think well-funded registries will thrive while the smaller ones won’t. If our assessment is indeed correct, the market will prove us right and we’ll see smaller companies either give up or end up being bought by larger ones.
November 18th, 2013 at 5:10 pm
One possibility is that technological advance and simplified ICANN rules will make running .brand very easy and low cost. Also, when a protocol is set up for accessing .brand, e.g. by simply typing “.brand” into browser, then .brand will really take off.
November 18th, 2013 at 5:24 pm
I agree 100%. As I’ve written on my blog is that essentially what will happen is that second level domains will become top level domains. For example instead of Capital.com you have everything.capital. It’s much more complicated than that of course as each new extension opens up millions (if not billions) of new potential names. In my blog, I do call this process “Jumping the Dot” which will take many years. However, I also write about the application fees going down to nearly the level that are mentioned here. If anyone cares, my blog is at:
http://www.newmarketnames.com