On 26/09/2020 08:26, Olivier MJ Crépin-Leblond wrote:
On 25/09/2020 18:40, John McCormac wrote:
A whole industry has developed around reselling previously deleted domain names and many of these drop caught domain names have sold for high prices. A domain name that might cost about $10 to register could resell for $10,000 or more.
Not a great thing for an end user registrant to beef-up prices like this. Some would say that this whole "industry" has a taste of "ticket tout/scalper". But I guess that's what happens in an unregulated market where the scarcity of names made it a seller's market. But now with the new gTLDs and the vast variety of choice in other TLDs, are we likely to see an end to this phenomenon?
It is basic supply and demand, Olivier, The valuable domain names are valuable because they are in well developed and used TLDs. Their value is very much a function of the overall development and recognition of the TLD. When the momentum shifted to ccTLDs, these ccTLDs also became more valuable because people used them and developed websites on them at a greater rate than before. In some respects, real estate/property rather than ticket touting is a better comparison. The price of property in a large city is going to be higher than the price of property in relatively undeveloped and unpopulated areas. The new gTLDs have a problem with development and with registration volume. But a problem of a kind of regulatory capture damaged some of them. In allowing the registries to own registrars, the natural development of some of the new gTLDs was disrupted. Some of the registries held back large amounts of what were considered "premium" domain names. These were typically generic single keyword domain names and short domain names. It killed the landrush boost (the flurry of new registrations that occur over the first six months when a new TLD goes into general availability). That's when people will register domain names in a new TLD in the hope of either striking it rich or getting a "good" domain name on which they can build a business. The domainers almost completely ignored these new gTLDs as a result and very few people developed websites on them. In some respects, the registries were acting like domainers in a mature TLD rather than registries. Many of these reserved premium domain names were either deleted or released in a drip-feed manner. With some of these new gTLDs struggling to get a few thousand (or even hundred) new registrations a month, the opportunity to grow the TLD was gone. Covid has altered the dynamics of the secondary market and the primary markets for most mainstream TLDs (.COM and the ccTLDs). There was a boost in some of the ccTLDs earlier this year as people who had lost their jobs decided to try building online businesses. That was mainly in the ccTLDs. The Eurid, the.EU ccTLD registry, made a rather poor decision to discount registrations in Portugal and that massively inflated the number of Portugese .EU domain names. Most of those will probaby be deleted next year. Eurid has also been heavily discounting registrations in an attempt to stave off a natural decline that is affecting all non-core TLDs. Covid in most countries with strong ccTLDs is increasing focus on the .ccTLD/.COM axis and registrations on the other TLDs in those markets has slowed. There was a similar spike on .COM earlier this year. A rule of thumb for the health of a TLD would be to watch the number of domain names on sale and the number of domain name sales. This is a far better indicator than the awareness opinion polls used by CCT. The .COM sale prices are linked to the US market. That's one where the local ccTLD has been unable to compete with .COM and .COM has become the de-facto US ccTLD. The new gTLDs have been in decline for the last few months and there is a massive drop of a few million heavily discounted registrations that will occur over the next six months. The .UK ccTLD has seen a block of deletions of the .uk domain names that had been "reserved" by large registrars for their clients. The .uk second level registrations did not really take off and was a management reaction to the launch of the new gTLDs. Some of the high value keyword/short .uk domain names are being drop caught and reregistered. The ccTLDs with strong local markets and development are likely to see the secondary market value increase. The .COM might remain relatively stable as long as the US market does not adopt the .US ccTLD in large nubmers. (That is something that could occur over a ten year timeframe as Godaddy is now the .US registry and it has significant market power.) Many of the non-portfolio operator new gTLD registries are going to find the next year or so quite difficult. The portfolio operators may benefit from having their risk spread over a number of new gTLDs in different markets. The wildcard is the .WEB gTLD. If it ever manages to launch, it will take a lot of the optional registration money away from the new gTLDs and some of the legacy gTLDs. The Covid effect on domain name markets, if it continues, is likely to accelerate the shift to ccTLDs. (More business being local and selling locally.) That means that some ccTLD domain names will increase in value. However, ccTLD resale dynamics are quite different to that of .COM because people identify with their local ccTLD in that it is "their" TLD. The right of the dot becomes invisible because people assume that a new website or domain name is in the local ccTLD. Based on the statistics, the new gTLDs are not competing with the .ccTLD/.COM axis in most markets and unless a lot of development and usage occurs, they are unlikely to compete in terms of secondary market prices and sales. I included a chapter in the Domnomics book on the "all of the good domain names are taken" fallacy (Chapter 9) along with estimated regregistration percentages for .COM/NET/ORG over 2004 to 2019. The scarcity argument only really applies to a very small set of domain domain names in any TLD. When some of these domain names are sold for large prices, they make headlines and convince people that there is a problem with domain names being held back from ordinary registrants. The vast majority of domain names are registered and will delete without ever being reregistered. Regards...jmcc -- ********************************************************** John McCormac * e-mail: jmcc@hosterstats.com MC2 * web: http://www.hosterstats.com/ 22 Viewmount * Domain Registrations Statistics Waterford * Domnomics - the business of domain names Ireland * https://amzn.to/2OPtEIO IE * Skype: hosterstats.com **********************************************************