In the Land of the Blind the one-eyed man is King

Truth be told:  a growing number of Professional Domainers are nervous about the launch of new gTLDs.   The official party line I hear from many domainers is something along the lines of “this too shall pass”.  However in private, now that .ANYTHING is fast becoming a reality, there are signs of tension among professional domainers, particularly those who have a large exposure to the investment thesis of “.COM forever”.  While the future is unknown, and the gTLD banter is very entertaining, for professional domainers, the gTLD risk can be managed.  Regardless of whether you are long or short gTLDs, as Rick Schwartz has eloquently stated, gTLDs represent Opportunity. So, how can professional domainers hedge their gTLD bet without taking on the risk of direct exposure to gTLD speculation during this “Wild West” phase?

The next phase is now fully in progress
Registry creation and management is on the way to becoming a streamlined process.  At the risk of inciting wrath from long-time domainers, I will state my prognosis: there will now be an implicit cap on the price of a .COM. The long-time owner of a premium .COM may present the counter-argument that the act of someone developing .ANYTHING implicitly means ANYHING.COM is more valuable.  In the short term, I think that is plausible and indeed have no doubt that there will still be 6 and 7 figure .COM deals in the coming years, whether or not a corresponding gTLD is in play.  However, in a year or two from now, if a brand-oriented investor has $500K to invest, and has a choice between investing that $500K for the purposes of either owning  (1) the .ANYTHING TLD forever or (2) ANYTHING.COM, I believe .ANYTHING wins.  Why?  A registry makes money every time someone registers or renews a .ANYTHING domain whereas ANYTHING.COM only makes money if it is developed to some degree or re-sold at a profit.  The first 50,000 .ANYTHING domains have absolutely no ongoing cost to the registry — not even an ICANN fee.

So, what can Professional Domainers do hedge their gTLD bet?
The title of this blog post encapsulates what I think Professional Domainers should be doing:  become knowledgeable about gTLDs and establish awareness among prospective registrants about their knowledge.  gTLDs are still a subject of very limited awareness.   Consider the following comparison of hits in Google:

“.com domain”

3,680,000 results

“.biz domain”

1,780,000 results

“.clothing domain”

7,210 results

“.lawyer domain”

4,420 results

“.attorney domain”

2,600 results

Based on the above, it is still early days in terms of the existence of authoritative information on how to secure these new TLDs.  Professional Domainers can either (1) ignore this sector, and leave this market to the likes of GoDaddy, 1&1, and Demand/Enom/Rightside (congrats to Taryn Naidu!), or (2) they can thoughtfully engage in the public discourse and, in the process, be compensated for their expertise.  A few strategies come to mind, which I will briefly outline in the remainder of this post.

Strategy 1 – Reselling and Referring
Epik’s approach for gTLD marketing echoes what we have done with Domain Name Backorders.  We offer first-come-first-serve pre-orders at a fixed price.  This aligns incentives with the prospective registrant. As with Backorders, the pre-orders are refundable if cancelled prior to registration. The standard pre-order rate is $199. Volume discounts are available.  A key advantage of this pricing model is that the $199 price point leaves room for resellers and referrers to participate in the opportunity.  More on that below.

Strategy 2 – Advising and Consulting
The number of companies who are going to need advice from competent gTLD experts is going to increase.  There are some boutique firms who were early movers in this arena.  However, these specialists may lack the personal connections to decision-makers at deep-pocketed organizations who may be interested in pursuing a new TLD.  Associations, particularly those with large memberships are a good example.  In addition, there are also corporations who are constantly trying to pick up new extensions of their SLD who should logically want to own the TLD once the window for such re-opens.

Strategy 3 – Launching a gTLD on your own
The window for securing new gTLDs is currently closed.  At some point it will be re-opened, creating even more windfall for ICANN while also creating even more variety for registrants and registrars.   Some estimates call for as many as 100,000 unique registries.  That number is mind boggling but still plausible particularly if the fixed costs for these registries comes down over time thereby making it more accessible to smaller businesses and brands.

Reselling Epik is easy
Of the 3 strategies, Reselling is probably the easiest path.  If you have an Epik account, you already have an Affiliate Account.  Simply navigate over to Account –> Affiliate Program.  There you will see a vast collection of affiliate links and banners to choose from.  The starting revenue share is 20% of any new customer sale.  Commissions are paid out daily.

affiliate

Looking ahead to the next few months, by popular request, Epik will introduce a Reseller API for most of our service offerings, making it easier to integrate these offerings. Details on the Reseller API will be a subject for a future announcement, but for those who have asked about it, Reseller API is indeed on the way.

In summary, the rapid growth of the namespace via the inclusion of a vast array of new TLDs is a game-changer.  How quickly this goes mainstream is unknown.  That said, the empirical data is encouraging: even with only limited marketing, the pre-order volumes being reported by registrars suggests that retail end-users are interested in new TLDs.  For professional domainers with a vested interest in the status quo of Dot-Com forever, this may or may not be viewed as a positive development.  Yet, by leveraging one’s reputation as a subject matter expert in the area of domain names, there is no shortage of ways to hedge one’s bet as to the future outlook for new TLDs.

Join the discussion 2 Comments

  • Leonard Britt says:

    100,000 new TLDs – now that is a scary thought 🙂

    ** RWM ** Indeed, daunting. But as the TLD price comes down from say $185,000 to say $50K, you could see it happen. You might go for .BRITT for example. The early adopters of the new TLDs are paying more and getting the best keywords. Over time, that price will logically come down or be subject to auction. The TLD .BRITT might be a $10K TLD, for example. If the TLD prices are dynamically set, the market will level-set. The barrier to entry for being a registry will come down as service providers emerge to provide cost-effective registry management even for small TLDs that may be limited to non-public access. Pandora’s Box has been opened the domain world will never be the same!

    • Leonard Britt says:

      I believe that trends in TLD registration stats will tell the story. .COM registrations continue to grow though at a slower pace than pre-2008. .Info has been on a continuous decline since early 2012. So if .Info is going to lose 25% of its registration base in two years, what does that say about the pent-up end user demand for new TLDs? Of course a lot can change in five to seven years but I just don’t believe we need 700 new TLDs in 2014. If I were to buy a TLD if wouldn’t be .Britt but perhaps a .Run or .Fast 🙂

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