On 24/09/2020 20:32, mail@christopherwilkinson.eu CW wrote:

Thankyou, Evin:  In general, my earlier input has been taken into account. However, under. CCT Recommendations, the fifth bullet is far too weak:

...

. Make a decision about competition objectives, and therefore, required metrics (¿?)

Well, No. Competition is already ICANN's responsibility, and was the primary

justification for the CCT Review in the first place.

1.  This should be the first bullet.

2.  Delete 'Take a decision'. I trust that the decision has already been taken.

3.  Proposed competition metrics:

-   Evolution of market shares:  Legacy, ccTLDs, new 2012 entrants, by region and by year 1998-2019.

Apologies for the late reply. Ironically, I was busy working on domain name and usage statistics and missed the meeting. With point 3 above, a lot of the data on market shares is highly fragmented due to ccTLD registries publishing little or partial registration statistics until quite recently. The 2000s round of new gTLDs had requirements that the registry reports would include statistics on country level registrations and a few of these old reports still exist. The requirement was dropped along the way and there is no registrations by country breakdown in current registry reports. Some of the new gTLDs (2012 round) have developed their own geography of registrations and a few of the NGTs have become pseudo-ccTLDs. There has also been a major problem with demand. The demand for the 2012 NGTs might have been there prior to 2008 but after large-scale Domain Tasting ended, much of that demand effectively disappeared. Many NGTs are struggling to get a few thousand new registrations per month. Renewal rates in some of the NGTs are not good. This has lead to some registries indulging in discounting to drive registrations. Discounting is like crack cocaine for registries in that it is highly addictive, difficult to stop using and quite destructive. Once a gTLD starts to use massive discounting, it destroys the credibility of the gTLD, drives out good registrations and kills development. On a country basis, the legacy gTLDs are in trouble. Outside .COM, they are surviving on the renewal of brand protection registrations. The market in countries with a strong ccTLD is typically over 80% .ccTLD/.COM and even .COM is struggling against the local ccTLDs. It maintains its market position because it is still the top global TLD and it has market awareness. But ccTLD growth has generally outstripped gTLD growth (legacy and new) in most markets. This is a market shift. With new markets, people are looking to sell globally. With mature markets people sell more locally and there's nothing quite as local as the local ccTLD. The regional issue is a major problem for ICANN and or the gTLDs. The number of registrars in the continent of Africa is extremely low. The number of registrars in Latin America is also low but it has one of the strongest ccTLDs (.BR) in North and South America. ICANN's registry/registrar model was adequate for the late 1990s but it is completely broken for the 2020s. The number of US registrars, according to the May 2020 ICANN reports is 1,931. The second place goes to China with 63. The majority of ICANN registars are drop catchers. They exist only to register deleting domain names and are not retail registrars. (The table for the breakdowns by country/COM/NET/ORG/BIZ/INFO/MOBI/ASIA are on the front page of HosterStats.) This is what the top 10 countries by gTLDs looks like: Place - Country - Registrars - AMBIONIC - COM - NET - ORG - BIZ - INFO - - MOBI -ASIA 1 United States 1,931 115,344,679 96,254,119 7,980,423 7,120,955 780,752 2,870,507 256,022 81,901 2 China 63 16,164,053 14,737,181 1,089,888 169,985 35,989 36,189 49,594 45,227 3 Germany 20 10,702,418 7,876,179 1,135,195 871,438 165,140 604,423 29,441 20,602 4 Canada 17 10,351,574 8,634,615 802,159 664,688 83,773 147,261 13,615 5,463 5 India 60 4,553,671 3,832,946 309,943 287,343 49,457 58,859 6,815 8,308 6 Japan 15 3,929,366 2,922,285 516,577 125,096 160,395 185,236 8,749 11,028 7 France 16 3,508,658 2,649,808 360,933 293,906 64,387 122,975 11,386 5,263 8 United Kingdom 21 2,634,699 2,052,407 234,152 192,976 44,067 99,922 6,827 4,348 9 Hong Kong 53 1,732,305 1,605,868 65,757 1,987 56,910 682 77 1,024 10 Spain 13 1,482,705 1,189,114 133,519 99,738 13,342 41,188 4,882 922

-  Indicators of industry concentration and its evolution: by Registries, by Registrars, by RSPs, by portfolio investors.

On the domain name registrations side of the industry, it is massively concentrated. One of the portfolio and reseller statistics reports that I was working on shows that Godaddy's main registrars and hosters portfolio has 25.22% of the .COM market. It also has smaller portfolios which focus on PPC, brand protection and ccTLD markets. Endurance International Group is in second place with 5.44%. The market concentration is staggering. Approximately 94% of the AMBIONIC (Asia/Mobi/Biz/Org/Net/Info/Com) market is on just 1.29% operators (registrars/resellers/hosters). Of the hosters in that market, 650,340 are one hit wonders in that they only host one domain name (typically their own). This is often due to automated control panel setup for domain names. The registrations by registrars metric is obsolete and completely unreliable. There has been a wave of acquistions that have seen registrars and hosters change hands. Some of the larger portfolio operators have webhosters which act as resellers and it is not unusual to see some of the top ten positions in various country level markets being occupied by the registrars and resellers of various portfolio operators. This often the portfolio operator's registrars and hosters competing with themselves. The line between registrars and resellers has also become somewhat blurred due to the common ownership of registrars and resellers by portfolio operators. While the gTLD market can be described by registrar market share, there is not a one to one registar to reseller mapping and some resellers (not owned by the portfolio operators) will have registrations from multiple registrars for historical reasons. Even the Registrars/Resellers model has some complexity because many resellers are not "resellers". There are different types of hosters. Some of these are small businesses hosting their own domain names and they are not really resellers as such. They are often brand protection registrations in that they businesses protecting their own brands. At ICANN level, small businesses don't really appear because the IP constituency is focused on trademark and other IP rights. The bulk of brand protection registrations are small businesses, often without any registered trademarks or service markets protecting their own brand across the "must register" TLDs. The next layer is made up of web developers. They host the domain names of their clients and develop websites for them but they are not primarily in the business of domain name registrations. Some of them can have a few thousand registrations. They may evolve into domain name registration/hosting businesses. Once a hosting business has enough registrations, it may make the leap from being a hoster to being a registrar. With gTLDs, that generally meant becoming an accredited ICANN registrar. As country level mrkets have become increasingly dominated by their local ccTLDs in the last fifteen years, hosters are more likely to become ccTLD registrars for their local ccTLD rather than ICANN registrars. This shift was caused primarily by ICANN's failure to take action against large-scale Domain Tasting in the mid 2000s. People (including some of those that ALAC is meant to represent) found they could no longer get the domain name they wanted in .COM but could in their local ccTLD. Since then, the ccTLD has replaced .COM as the first choice TLD in most countries. The US market is the powerhouse of .COM and the legacy gTLDs. If it ever shifts towards .US ccTLD, then the legacy gTLDs will be in serious trouble. When it comes to portfolio registrations and domain name investment, the percentage of these registations in most gTLDs is much smaller than people expect. This because people don't typically rely upon statistical data. As a group, the "for sale" domain names in a TLD have a high non-renewal rate. The auctions and resale part of the market has a few large players but there is a blurring of the lines between registars that park expired domain names on PPC with a "may be for sale" notice and genuine auction/sales operations. One of the larger auction/sales operations has 1.35% of the .COM market. Contrary to the purist view, having auction/sales sites in a TLD is an indication of the health of a TLD. While it is a source of friction, it shows which TLDs that end users are in adopting. The NGTs have been a bit of a disaster in terms of secondary market sales.

-  Effects of vertical integration on industry concentration. Compare degree of concentration in each of the  Regions.

Concentration by region is also problematic due to ICANN's broken registrars model. The top of the market is dominated by portfolio operators that operate in mutiple country/regional markets (Transnationals like Godaddy, EIG, United Internet, CentralNic etc). One of Godaddy's acquisitions was the Host Europe Group and that operator had been buying up hosting businesses and registrars throughout the European market. Other players like United Internet and CentralNic had also been acquiring smaller players. When it comes to regions like Latin America/Carribean or Africa, they may not even move the needle when it comes to ICANN registrar marketshare but some of the countries will have their own thriving ccTLD markets. The markets in Africa seem to have skipped much of the Desktop Internet phase of development and moved instead to the Mobile Internet phase. It also means that many gTLD registrations will be hosted outside the registrant's country. This is often a function of economics and infrastructure development.

-  effects of new IDN Registries on market shares in the relevant language areas.

IDNs seemed to be a good solution but their uptake has not, even in the Chinese market, been spectacular or on anything like the scale that their proponents expected. What is interesting is that there has been a trend to use numbers in registrations in the Chinese market as the pronounciation of the numbers will be phonetically similar to that of various words. One of the big problems with the CCT was that many of the metrics suggestions were from people who were unaware how difficult it was to get data for these metrics. ICANN's Domain Name Marketplace Indicators group has been working on developing usable metrics and it might be better to look at some of this work rather than indulging in a Golgafrincham-like effort on what colour to paint the wheels on the next round of new gTLDs. 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 **********************************************************

https://www.dropcatch.com/ check out how that business model works. Theo On Fri, Sep 25, 2020, at 3:11 PM, Olivier MJ Crépin-Leblond wrote:

Dear John,

thank you for this very interesting contribution. I wondered about one paragraph:

On 25/09/2020 04:34, John McCormac wrote:

...

The number of US registrars, according to the May 2020 ICANN reports is 1,931. The second place goes to China with 63. The majority of ICANN registars are drop catchers. They exist only to register deleting domain names and are not retail registrars. (The table for the breakdowns by country/COM/NET/ORG/BIZ/INFO/MOBI/ASIA are on the front page of HosterStats.)

Could you please explain this? They register deleted domain names - for themselves? - and are *not* retail registrars? I thought the function of a registrar is to sell to domain name registrants either directly or through agents? Kindest regards,

Olivier

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From John McCormac: Gesendet: Freitag, 25. September 2020 15:43 On 25/09/2020 14:11, Olivier MJ Crépin-Leblond wrote:

...

Could you please explain this? They register deleted domain names - for themselves? - and are *not* retail registrars? I thought the function of a registrar is to sell to domain name registrants either directly or through agents?

Deleting domain names have some value, Olivier, Some of that value is in their search engine backlink profile and then there's the value of the domain name for resale purposes.

The drop catchers/auction sites take pre-orders on domain names and then they try to register these deleting domain names. The domain names will then either go to the person who placed the order or to auction if there are multiple back orders or the domain name is considered to be of high value.

The main purpose of registering deleted domain names is to resell them to a previous owners, which missed the renewal dates of the registry. Recovering a accidentally lost domain name is paid very well by those who want to stay in business. Just saying.

On 25/09/2020 16:26, Lutz Donnerhacke wrote:

The main purpose of registering deleted domain names is to resell them to a previous owners, which missed the renewal dates of the registry. Recovering a accidentally lost domain name is paid very well by those who want to stay in business.

That might have been the business model twenty years ago before the various grace periods. The reality is that some of the deleted domain names are valuable because they are generic high value keyword domain names or short domain names. Most domain names that are deleted are not reregistered or targeted by dropcatchers as they are often one year wonders registrations that are registered for one year and not renewed. There is a natural attrition in domain names that most people never see. Businesses close and domain name owners leave domain names drop. The bloodtrails on domain names that are likely to delete can appear months, or even over a year before the deletion date. It is easy to confuse this with accidential deletion but many of these businesses have already closed long before the domain name is deleted. The Secondary Market is quite large and many of these reregistered domain names are valuable because of their link profile or type-in traffic. People will still visit some of the deleted/reregistered domain names expecting the same website but instead getting a page full of PPC advertising. A few PPC clicks can cover the cost of a year's registration. Domain Tasting still occurs on a much smaller scale. Then there are private blog networks that snap up deleted domain names to promote various sites in search engines. Some people just want to buy a domain name that had been previously registered and is a good fit for their business or brand. Many of the domain names that go to auction do so through the auction site's affiliated registrars. This is done by breaking the natural domain name lifecycle and instead of allowing a domain name with a strong backlink profile or traffic to delete normally, the registrar will send it to auction. The millions of domain names on auction and sales sites would indicate that the days of dropcatching being mainly about the recovery of accidentally expired domain names are long gone. There are some registrars that specialise in domain name recovery but they are eclipsed by the auctions/sales operators. 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. 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 **********************************************************

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 **********************************************************

On 27/09/2020 02:50, Greg Shatan wrote:

Very thoughtful and informative.

So why are we doing another round of New gTLDs?

People want to make money and justify their salaries. Others haven't learned from the mistakes of the 2000s and the 2012 rounds. Then there is the "this time it will be different" contingent who are well-intentioned but unaware of the dynamics that drive the domain name business. Domain names, for registrants and resellers, are a means to upsell the customer to a more expensive product. The domain name market isn't a stable one. The 2020 market isn't the same as the 2019 market just as the 2019 market isn't the same as the 2018 market. The 2012 round was an answer to the artifical scarcity created by Domain Tasting and ICANN's dithering response over the years 2005 to 2008. It took external action from Dell (legal action against a number of registrars) and Google (demonetisation of PPC advertising on AGP domain names) to solve it. ICANN eventually got around to implementing some rules about AGP abuse but the legal actions and demonetisation had been far more effective. ICANN was at a disadvantage because it is a reactive/stakeholder organisation with a long decision making process. By the time that the 2012 round gTLDs launched in late 2013, it was a completely different economic landscape to that of 2005-2008. The demand that had existed in 2005-2008 no longer existed and the fragmentation of the domain name market along geographic lines had accelerated. This fragmentation meant that there was a shift away from the legacy gTLDs to the ccTLDs and the growth rate of the ccTLDs is still better than that of the legacy gTLDs. It was similar to what happened to .BIZ when the DotCom bubble burst. Like many of the 2012 round new gTLDs, it had a great model for a market where there was a scarcity of "good" domain names. Then the bubble burst and all the domain names that had been registered and not used flooded back into the market. The .BIZ gTLD and its business model never recovered. The shift to ccTLDs was the equivalent for the legacy gTLDs (apart from .CAT and .XXX which are not quite gTLDs). In a gTLD-only market, the new gTLDs of the 2012 round should, theoretically, have picked up the demand from those who couldn't get their domain name in the legacy gTLDs (really .COM). The problem was that the ICANN management was completely focused on the gTLDs and they missed what was happening with the ccTLDs. One of the reports that I publish each month deals with renewal rates. The renewal rates for some gTLDs are quite terrifying. The use of discounting has led to gTLDs where as much as 80% of a zone from September 2019 from will have disappeared by September 2020. This Quick Delta metric is a way of keeping track of TLD health. The worst, apart from the terminated gTLDs, was .LOAN with 94.95% deleted. This Quick Delta metric is simply comparing one zone with a subsequent zone. The .COM only has 18.84% deleted for Sep19/Sep20. The ironic thing is that the best performing gTLD with this highly simplistic metric is actually .XXX gTLD. It only had 1.85% deleted. But .XXX is not so much a TLD as a brand protection operation. If the same model had been applied to the 2012 round (instead of the various trademark clearing house approaches), then the brand protection element might have helped some of the new gTLDs. Without a signficant level of brand protection registrations, many new gTLD registries were faced with having a small gTLD with high registration/renewal fees or indulging in heavy discounting with minimal renewals. As was shown with the attempted purchase of the .ORG gTLD, there will always be those who think that money can be made from domain names. Purchasing an already successful registry/gTLD is quite different from starting up a new TLD. The risks won't stop people trying and there will, as had been seen with the 2012 round, be people looking to make money from selling them the picks and shovels for the next gold rush. And there will be "consultants" looking to make a profit from the gullibility of prospective gTLD operators who think that the "Field Of Dreams" business model works. To extend the domain names as real estate idea, there are people and companies who believe that they can build cities where people will want to live and work. Perhaps they will be successful but at the moment, there many ghost towns in the 2012 round gTLDs. 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 **********************************************************