Categorized | Domaining Tips

Let’s Talk About Worst Case New gTLD Scenarios

Posted on 13 March 2017 by Andrei

If let’s say two years ago, someone would have said new gTLD renewal prices would go up 30 times in some cases, he would have been called a conspiracy nut. Yet it happened. As those who invested in Dot Hosting and Dot Juegos domains found out, renewal fees did in fact go up from $10-$20 all the way to $300 per year. Worst case scenarios aren’t just horror stories, they can and sometimes do materialize.

Which brings us to today’s question and perhaps the elephant in the room: is this as bad as it gets?

In my opinion, the answer is no.

The elephant in the room that not many people talk about seriously is the possibility of certain new gTLDs disappearing altogether.

There, I’ve said it.

Again, people would have called you a nutter for saying this let’s say two years ago but in light of the recent events that took place in the new gTLD world, I believe this scenario deserves more attention.

It’s ultimately all a matter of economic viability.

And it’s clear that people were overly optimistic when deciding which new gTLDs to go for. Or in other words, there’s so little actual demand for some new g’s that those strings shouldn’t have been launched in the first place.

But they *have* been launched… now what?

Well, one option would have been some kind of consolidation involving failed strings being bought by one of the big players and somehow turned around. Or if they would have already been owned by a big player, that company would have simply kept them around to save face despite losing money.

But I see such scenarios as less likely.

I mean look, Uniregistry isn’t the biggest player in the new gTLD space but we can consider them a big player.

Frank’s been around the block long enough to know that a huge price increase such as the Dot Hosting or Dot Juegos one would make domainers stay away not just from those strings but from Uniregistry strings altogether. He could have decided against the price increase and simply maintained the status quo, accepting the fact that he’d be losing money.

But he didn’t.

Despite knowing that this move would generate cataclysmic long-term consequences among domainers, he did it anyway and I assume it’s because Uniregistry decided that even with all of the cons, economic viability needs to prevail.

In light of this fact, I don’t think it would surprise anyone if they’d decide to ultimately abandon one or some of their strings.

Chalk it off as a loss and move on, accepting the reputation hit and other consequences.

What about other players?

Well, maybe they’ll choose a different strategy for their losers, I don’t know.

What I do know (and this is the conclusion of today’s post) is this: if you don’t understand that lots of failed new gTLDs will most likely end up being killed or sunsetted to use a more diplomatic term, you’re living in denial.

My #1 piece of advice would be staying away from new g’s altogether as a domainer.

If for whatever reason you choose to ignore this advice, then at least remember my #2 piece of advice: if you insist on investing in new gTLDs then for the love of God and all that is holy, choose carefully and only go with the best of the best in terms of strings. No matter how tempting it might be to buy huge terms on the left of the dot in new gTLDs which seem shaky, stay far, far away.

Good luck!

7 Comments For This Post

  1. Rob Says:

    Good advice stay away, they have hinted at intent, and their contacts provide such provisions, let them suffer alone. Why join in their misery.

    These companies will never show compassion for your bottom dollar.

    Worst case scenario they raise prices into hundreds, or thousands per year, and try to sale the tree loose.
    If an end user inquiry states that .com, is to experience, and they want to go gtld, we’ll give them a link to price increases, and they will run back to .com.

    I think the roll out could not have been held any worse with companies gaming the trademark clearing house, to unqualified, or underfunded operators being granted extensions with loose wording.

  2. Domain Observer Says:

    The GTLD operators should make it clear and guarantee to the customers the 5 key essential points will be fulfilled in any way – Credibility, Stability, Certainty, Long-term Predictability and Customer-friendly. Otherwise MASSACRE!!! to use a non-diplomatic term.

  3. ThcNames Says:

    It’s not just among domain investors. I’ve noticed there is lots of talk on tech forums about the price increases. It’s creating confusion which isn’t a positive. Schilling seriously underestimated the impact this would have.

    Even a company like WordPress/Automattic, with a huge audience and reach, greatly overestimated. They claimed they would do 250,000 .blog regs in 2016 easily. They fell short of that goal by 213,000 roughly, only doing about 35,000 – 37,000 registrations in 2016.

    I’m doing business with Uniregistry sales platform, brokers, or using them as a registrar. Already transferred out many domains.

    This is going to bring down several new extensions. Ironically Frank said, “There will be a bust.” and he f*cking started the new domain bust! 🙂

  4. ThcNames Says:

    Meant I am NOT doing business with Uniregistry anymore. How many others feel the same way?

  5. Eric Lyon Says:

    While I do agree that it’s way too early in the game to put value on most (Not all) new gTLD’s, there are still some golden nuggets out there people are making money on. Like with any new extension, the ones that benefit the most are the ones ready for a very long hold and invested in top quality domains. Look how long it took for .com to catch on and people to want it after it came out. Or any other TLD for that matter.

    While i would express CAUTION in investing in new gTLDs, I wouldn’t rule out potential profits this early in the game.

  6. Says:

    I think it is fair play to react today instead of when it is too late. The guy is a visionnaire so it means to me that the worst case scenario…might come when other multiple registries start to do the same. We’re not yet there but if it happens…not only domainers then have a problem but small companies who capitalized on building their online strategy on a new domain names. Which small company will want to pay $300, instead of $25

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