The document discusses the early outcomes and perspectives on new generic top-level domains (gTLDs) following their launch, revealing that expectations from brands and registrars were largely unmet, with slow adoption and mixed results. It highlights pricing challenges, marketing effectiveness, and a shifting landscape for registrars, indicating that traditional metrics for measuring success may no longer apply. The document concludes with observations on the necessity for registrars to adapt their strategies in a changing market environment.

1. 1
©
2014
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and/or
its
affiliates.
All
rights
reserved.
Myths & Facts
New gTLDs, Registries &
Registrars
www.architelos.com
September 30, 2014

2. Agenda
1. Se<ng
the
Stage
2. Prior
gTLD
Launch
Models
3. New
gTLD
Myths
&
Facts
• Pricing
• Brands
• MarkeJng
• Technical
IntegraJon
• New
Entrants
• Market
Share
Myths:
What
were
generally
held
beliefs
going
into
the
program
circa
2012
Facts:
Nine
months
into
the
new
gTLD
program
what
data
is
emerging
Premise
of
the
Discussion:
We
Encourage
Dialogue…
Alexa
Raad,
CEO
John
Matson,
COO

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3
Ex: “What was your
2013 DUM growth?”
Ex:
“What
impact
will
new
gTLDs
have
on
your
business?”
Source
of
greatest
threat
or
opportunity.
Its
what:
• makes
new
companies,
or
makes
others
obsolete
• brings
unanGcipated
OR
unintended
consequences
What you
know
What you know
you don’t know
What you don’t know
You don’t know
Setting the Stage

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4
What you
know
What you know
you don’t know
What you don’t know
You don’t know
Setting the Stage
Sources:
• New
and/or
disrupGve
tech
• New
compeGtors
• Regulatory
forces
• Geo-­‐poliGcal
forces
• Economic
factors
• Changing
Consumer
tastes,
trends
and
behavior
• Customer
driven
changes

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5
What you
know
What you know
you don’t know
What you don’t know
You don’t know
Reduce
uncertainGes
Ideal Outcome
Expand
&
Monitor

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6
New gTLD Launch Profile Differs from Past
0"
500,000"
1,000,000"
1,500,000"
2,000,000"
2,500,000"
'4" '3" '2" '1" 1" 2" 3" 4" 5" 6" 7" 8"
Comparison*of*gTLD*Prior*Launches*&*New*gTLD*Program*(DUM)*
.biz"(2002)" .mobi"(2006)" .guru"(2014)" All"New"gTLD" Donuts"

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7
Circa 2002 Registry Revenue Model
SpeculaJve
Defensive
ProducJve
Immediate
Secondary
Market
Source
Registry:
All
domains
–
single
price
Lost
Registry
Value
(Cash)

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8
Circa 2006 Registry Revenue Model
Premium
Names
Sunrise
Brand
Defensive
ProducJve
Delayed
Secondary
Market
Premium
Names
Captured
More
Cash
Value
Earlier
for
the
Registry
Renewals
at
GA
Price
regardless
of
value
SpeculaJve
Similar
Business
Over
Time

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9
Circa 2014 Registry Revenue Model
Tiered
Names
Minimal
Brands
All
Names
Released
with
Higher
Pricing
via
Permanent
Tiers
or
Early
Premium
?
Secondary
Market
Unclear
Significantly
Less
Cash
Early
More
&
Different
Pricing
Models

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10
“Brand Registrars will Sell Lots of Defensive Registrations”
General
Market
ExpectaJon
Before
Launch:
• Brands
would
have
to
spend
billions
of
dollars
to
protect
in
new
gTLDs
• ANA,
Fairwinds/CADNA
&
IP
lawyers
waged
campaign
to
delay/stop
new
g’s
• Trade
Mark
Clearing
House
planned
for
millions
of
registraJons
• Few
brand
new
gTLD
applicaJons
Results
aier
9
months:
• Brands
did
not
show
up
to
purchase
large
numbers
of
new
gTLD
names
• TMCH
registraJons
at
~30,000
and
significantly
below
expectaJons
• Brands
are
conscious
that
traffic
drives
value
–
no
need
to
purchase
• CSC
ranks
25th
(0.48%)
&
Markmonitor
28th
(0.44%)
market
share
• Average
of
30-­‐35
names
sold
per
TLD
with
~300
TLDs
acJve
• Over
600
brands
applied
for
new
gTLDs
–
many
in
wait
mode
• Donuts
DPML
–
gave
brands
ability
to
block
names
in
all
150+
TLDs

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11
Slow Uptake of New gTLDs by Brands
!"!!!!
!20!!
!40!!
!60!!
!80!!
!100!!
!120!!
DUM/TLD!(100)! DUM/TLD!(200)!
Average'Brand'Domians'Sold/New'gTLD'for'CSC'&'MM'
CSC!(10,447!DUM)! Markmonitor!(9,578!DUM)!

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12
“Domain Prices will Have to be Similar or Less than .com to Compete”
General
Market
ExpectaJon
Before
Launch:
• TLDs
would
follow
prior
gTLD
launches
with
1
wholesale
price
for
all
names
• Pricing
would
be
low
to
compete
with
.com
–
the
market
leader
• Premium
name
programs
would
aucJon
some,
hold
back
other
for
later
Results
aier
9
months:
• Some
pricing
very
high:
.luxury
@
$999
&
.shijie
@
$200,000
• Tiered
pricing
introduced
that
keeps
renewal
price
higher
• Early
purchase
pricing
rather
than
premium
name
model
• Mostly
all
name
inventory
released
for
market
to
decide
–
RAR’s
pleased
• Premium
name
aucJons
show
poor
results:
.global
~$60K
for
xx
names
• Pricing
complexity
requires
new
technical
soluJons
between
REG-­‐RAR
• EPP
command
holds
only
one
value
for
price
of
all
names
Myth:
Renewals
follow
previous
rates.
Current
facts
have
yet
to
be
determined,
but
as
current
ccTLD
renewals
are
generally
under
pressure,
they
will
likely
not
follow
the
past.

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13
Case Example: Minds+Machines Pricing Tiers
• M+M
ignored
the
one
price
for
all
GA
&
premium
name
aucJons
• Created
8
Jers
of
names
• Manually
sorted
over
100,000
names
into
the
8
Jers
• Registrar
gets
20%
of
Tier
pricing
plus
any
markup
• E.g.
$500
price
Jer
• Registrar
sells
name
for
$650
• Registrar
gets
20%
of
$500
plus
margin
over
$500
• $100
plus
$150
for
$250
out
of
$650
• Requires
registrars
to
be
able
to
handle
new
pricing
methods
• Renewal
occurs
at
Tier
price
so
future
revenue
is
maintained
• All
names
are
released
to
market
so
no
inventory
held
back

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14
CENTR Member Survey
1)
Have
new
gTLD
sales:
a. fell
far
short
of
your
expectaJons
b. fell
short
of
your
expectaJons
c. about
what
I
expected
d. exceeded
my
expectaJons
e. far
exceeded
my
expectaJons
2)
Five
years
from
now
how
will
this
round
of
new
gTLDs
be
remembered:
a. An
user
failure
b. An
interesJng
experiment,
nothing
more
c. Introduced
confusion
at
first,
but
gained
awareness
and
moderate
success
d. Was
the
start
of
something
big,
many
thriving
niche
TLDs
e. Changed
the
industry
fundamentally

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Results….
6%
19%
45%
10%
19%
Fell
far
short
of
my
expectaGons
Fell
short
of
my
expectaGons
About
what
I
expected
Exceeded
my
expectaGons
Not
sure
or
too
early
to
say
New gTLDs Sales have:
31
responses
6%
16%
59%
6%
6%
6%
An
uZer
failure
An
interesGng
experiment,
nothing
more
Introduced
confusion
at
first,
but
gained
awareness
and
moderate
success
Was
the
start
of
something
big,
many
thriving
niche
TLDs
Changed
the
industry
fundamentally
Other
5 years from now, new gTLDs will be remembered... 32
responses

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16
“The Path to Market is Through Us (Registrars)"
General
Market
ExpectaJon
Before
Launch:
• Registrars
are
THE
path
to
market
–
registries
will
have
to
accept
terms
• Registrars
will
be
able
to
pick
and
choose
who
they
list
• “Pay
to
play”
to
be
on
a
registrar’s
first
page
• Large
registrars
will
carry
all
TLDs
–
Some
smaller
registrars
are
choosey
Results
aier
9
months:
• Mixed
results
• Strong
basle
between
parJes
on
terms
–
slight
nod
to
registries
on
pricing
• Larger
registrars
are
more
choosey:
Tier
1,
Tier
2,
Tier
3
slo<ng
• Smaller
registrars
seem
to
be
chasing
everything
–
lack
of
focus
• Not
much
“pay
to
play”
–
big
discounts
expected
for
GoDaddy
page
1
• Registries
pursuing
much
more
direct
markeJng
to
target
registrants
• Registrars
are
not
able
to
effecJvely
target
narrow
segments

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17
GoDaddy-­‐
Homepage

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18
GoDaddy-­‐
Domain
Search

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19
1&1

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20
EnCirca
–
Example
of
Smaller
Registrar

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21
“Registrars will Market New gTLDs Effectively"
General
Market
ExpectaJon
Before
Launch:
• Registrars
have
been
selling
domain
names
for
over
15
years
• Registrars
have
hosJng
&
other
services
dependent
upon
name
sales
• Registrars
will
invest
in
some
strings
like
GoDaddy
did
with
.co
• VerJcal
integraJon
to
be
an
opportunity
for
Registrars
Results
aier
9
months:
• 1&1
had
generic
television
adds
pre-­‐new
gTLD
program
–
now
ceased
• Lisle
to
no
custom
markeJng
for
new
gTLDs
by
registrars
• Registries
creaJng
their
own
registrars
to
market
strings
• Keep
more
margin
for
the
contract
holder
• Developing
niche
markeJng
programs
based
upon
narrow
segments
• Equal
access
rules
sJll
apply
• Registrars
did
not
fully
appreciate
that
registries
would
exploit
opportunity
offered
by
their
own
registrars

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“Registrars will Enforce Standard Technical Integration of New gTLD"
General
Market
ExpectaJon
Before
Launch:
• Registrar
technical
onboarding
of
registries
clearly
defined
• Registries
will
work
with
registrars
to
conform
to
exisJng
EPP
protocols
• Registrars
hold
the
power
and
registries
will
conform
Results
aier
9
months:
• New
pricing
models
by
gTLDs
have
challenged
registrar
technical
systems
• Primary
issue
has
been
one
price
per
TLD
• EPP
command
passed
one
price
for
all
General
Availability
names
• Out
of
band
pricing
tables
&
caching
soluJons
to
handle
new
pricing
• Nexus
requirements
require
addiJonal
steps
in
registraJon
flow
• Some
but
limited
standardizaJon
of
new
pracJces
• More
collaboraJon
needed
to
define
“new
standards”

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23
“New Registrars will Emerge – Mostly Niche"
General
Market
ExpectaJon
Before
Launch:
• There
will
be
some
niche
registrars
but
no
big
compeJJon
to
large
• Technical
&
markeJng
requirements
lei
for
later
• New
registrar
soluJons
being
developed
to
add
new
gTLD
inventory
(Fly9)
Results
aier
9
months:
• Google
enters
the
market
as
a
full
funcJon
registrar
–
impact
sJll
TBD
• Has
access
to
the
largest
billboard
ever
known
to
man:
google.com
• New
registrar
front
end
soluJons
emerged
for
brand
registries
• E.g.
Brandshield,
AuthenJcWeb
• Niche
registrars
sJll
have
not
emerged,
but
major
strings
yet
to
come
• E.g.
.music,
.realtor,
.broker,
.art

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24
“New gTLD Market Share will Follow Industry"
General
Market
ExpectaJon
Before
Launch:
• Registrar
market
share
of
global
industry
will
be
reflected
in
New
gTLDs
• Difficult
for
smaller
registrars
to
integrate
many
new
gTLDs
Results
aier
9
months:
• Although
the
top
3
registrars
sJll
dominate,
the
ranking
has
changed
GoDaddy
is
#2
• Uniregistrar
(New)
is
in
#8
spot,
but
it
is
the
registrar
procurement
arm
of
Uniregistry
and
thus
focused
on
buying
Uniregistry
names
• We
are
seeing
smaller
exisJng
Registrars
taking
more
new
gTLD
market
share

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25
“New gTLD Market Share will Follow Industry"
Source:
Architelos
analysis
of
ntldstats.com
data
9/8/2014
Registrar C/N/O New.gTLD Registrar New.gTLD C/N/O
GoDaddy 1 2 NetSol 1 3
eNom 2 3 GoDaddy 2 1
NetSol 3 1 eNom 3 2
TUCOWS 4 11 1&1 4 5
1&1 5 4 United 5 Not:in:Top:15
MIT 6 Not:in:Top:15 PSI 6 Not:in:Top:15
Wild:West 7 Not:in:Top:15 GMO 7 Not:in:Top:15
Register.com 8 Not:in:Top:15 Uniregistrar 8 Not:in:Top:15
Resellerclub 9 Not:in:Top:15 Hexonet 9 Not:in:Top:15
KeyNSystems 10 Not:in:Top:15 XinNet 10 Not:in:Top:15
Moniker 11 Not:in:Top:15 TUCOWS 11 4
FastDomain 12 Not:in:Top:15 RESERVED 12 Not:in:Top:15
Strato:AG 13 Not:in:Top:15 Name.com 13 Not:in:Top:15
Onamae 14 Not:in:Top:15 Mesh 14 Not:in:Top:15
OVH 15 Not:in:Top:15 101Domain 15 Not:in:Top:15

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26
Summary Observations: Market Still in Flux…
• Old
success
metrics
(e.g.
pure
DUM
volume)
are
misleading
• Registrars
will
need
to
update
their
focus
and
approach
• Focus
on
selling
soluJon
packages
vs.
domain
inventory
• Specialize
in
a
demographic
or
industry
niche
• (ex:
Godaddy
now
focusing
on
soluJon
packages
for
SMEs)
• Adjust
expectaJons:
• Most
new
gTLDs
are
hard
pressed
to
invest
in
a
lot
of
markeJng
$$
• Less
willing
to
pay
for
placement
• More
willing
to
pay
for
sales
(i.e.
pay
for
eyeballs
vs.
commission)
• Already
seeing
evidence
of
the
1st
wave
of
new
gTLD
failures
• Will
not
go
to
EBERO
but
rather
to
public
aucJon/sale
• Expect
aucJons
and
M&A
acJvity/consolidaJon
• Will
create
fallout
especially
for
retail
registrars