Roland LaPlante - New TLDs: Lessons from the past

SM

New TLDs: lessons from
the past
Newdomains.org
Conference
Munich
September 26, 2011

Presented by:
Roland LaPlante
CMO, Senior Vice President, Afilias

© Afilias Limited www.afilias.info

New TLDs are not NEW!
• ICANN has hosted 2 new TLD rounds so far:
– 2000: “Proof of Concept”; 44 applications; 7 strings
awarded
• AERO, biz, coop, INFO, museum, name, pro
– 2004: “Sponsored gTLDs”; 10 applications; 8 strings
awarded
• ASIA, cat, jobs, MOBI, post, tel(2), travel, XXX (mail not approved;
post has yet to launch)
• Non-ICANN TLDS have launched too
– eu
– ME

© Afilias Limited Speaker: Roland LaPlante 2 www.afilias.info

16 launches to date
• aero • me
• asia • mobi
• biz • museum
• cat • name
• coop • pro
• eu • tel
• info • travel
• jobs • xxx

16 different business models
16 different teams
16 different investment strategies


Agenda
• Review the new TLD experience to date
• Illustrate some lessons to be learned from this
experience


Afilias supports 16 TLDs today
•We support 20M names;
•5 new gTLDs; 60% of all new TLD names!
•Experienced in ICANN’s new TLD processes
Generic & Sponsored TLDs
NEW NEW

NEW NEW NEW

Country Code TLDs
NEW

© Afilias Limited Speaker: Roland LaPlante www.afilias.info
5

Total TLD market continues to grow
• Total is now nearly 215,000,000 registrations
• 248 ccTLDs, 21 gTLDs: extremely competitive


Growth rate has been accelerating
for 18 months (see red line)
• Real growth about 12% (red)
• Even with .CN decline, growth is nearly 10% (blue)


Market Share: COM @ 45%; cc’s
@ 39%
• COM and cc’s have returned to historical levels


ccTLD growth is steady


CC growth now outpacing gTLDs
• CN collapse accounts for the dip


COM/NET remain > 50% of total

11

After 10 years, new TLD Volume is about 16M
registrations worldwide


New TLDs are 7.4% of the total market


Top 4 nTLDs dominate

14

Why are the top 4 on top?
• Broad appeal; channel friendly technology and
programs; consistent effort

Channel programming

Regional Identity

Consistent effort
Growth niche (mobile)


Bottom 11 nTLDs show mixed trends

16

Why the volume differences-1
• Market need?
– Low volume TLDs raise the question
– This does NOT mean low volume TLDs are unsuccessful


• First renewal period is the acid test
– name/asia/travel off their initial peaks; tel still a ?


• Innovation versus practicality
– Name/Pro/Tel: innovative concepts; difficult to execute
– Channel appetite for customizing is limited


nTLDs =10% of market growth
• 16M names out of about 163M names of growth
• Are nTLDs driving or riding?


Afilias supports about 60% of all nTLD
registrations today

Free INFO!!!

21

Distribution

• Distribution is critical to TLD success
• Registry Operators are REQUIRED to use ICANN
accredited registrars
– Existing registrars (with existing customer bases)
– Be your own registrar (start from scratch)
• Distribution is difficult to obtain, so you must know
the channel


New gTLD distribution trends

6 TLDs
100 - 400

7 TLDs
<50

com has
over 900

Distribution: for volume (>100)
• Early spike, then slower progress


Distribution: targeted (<50)
• Two apparent models: maintenance and growth


Distribution lessons
• Must have distribution right at the beginning!
– Distribution > awareness > sales > usage > acceptance >
SALES
– Launch is THE BEST reason to offer your TLD NOW
– If launch is slow, momentum will be hard to regain
• Channel knowledge is essential
– Who to talk to
– What to offer and when: registrars are business people
• Knowledgeable resources are scarce
– Own or outsource?


Secondary Market should be
tracked
• Secondary market is where you will sell premium
names (e.g. futbol.sport)
• Secondary market is hard to measure
– Many private sales
– Domain Name Journal is a good overall source of data
• Secondary market is dominated by com and net
• Secondary market driven by traffic and speculation
(but mostly traffic)


Total Secondary market about
$7-$8M/month
• Trending with the overall economy


Com and Net dominate

• C/N share trending down, but still over 60%


New TLDs fare poorly in
secondary markets
• Share is steady, but low at 4% (low vs 7% of volume)


Average unit sale $ is lower for
nTLDs than com
• Avg sale is $3900 vs $8900 for a com

EU/MOBI/ME Launches


nTLD values reflect traffic and use


Avg nTLD sale is ~ $4K

• Share is steady, but low at 4% (low vs 7% of volume)
Avg Sale ($)
.mobi $7,509
.me $5,234
.asia $4,165
.pro $3,962
.eu $3,732
.travel $3,130
.info $2,968
.biz $2,507
.tel $1,832
.name $1,290
Total $3,928
Thru Jul2011

Secondary market lessons

• There is new TLD money to be made in the
secondary market
– …but not much (total nTLD sales are about $350K/month;
avg sale is $4K)
– Multiple launches will fragment the market further
– There will be exceptions
• Premium and Reserve names offer real potential, if
they fuel specific uses for specific buyers
• Consult an expert
– This is a combination of art and science


Tracking Usage

• Registrant Adoption metric
• Internet user Acceptance metric
• Usage is a leading indicator of renewal
• Afilias tracks various types of usage:
– Dedicated: apparent new and unique content
• A new entity chooses your TLD for its main address
– Monetization/Referral: driven by traffic
– Redirects (to main current site, typically .com)
– Non-usage (e.g. trademark protection)


Usage tracking example: INFO

• Industry averages about 66% active; 34% inactive


Lessons: 1
• Volume / Market learnings
– Large volume is difficult to achieve…and takes a long time
– Only 4 of 16 launches have achieved over 1M names
– 6 are between 100-500K
– 6 are well under 100K
– …be conservative: heed the history
• Adoption takes time
– New TLDs are new product introductions
– Consumer behavior is difficult to change
• Unfamiliarity undermines trust
– Remember: unless you have a truly unique and better
name, alternatives exist

Lessons: 2
• Distribution
– Distribution is essential to your success
– Registrar support is not guaranteed, and ICANN cannot
compel registrars to carry your TLD
• Need a business case to take to registrars
– Each registrar is unique—they have different business
models and different strengths and weaknesses
• Know how many you need and who to use
– Must have distribution right at the beginning!
• Distribution > awareness > sales > usage > acceptance > SALES
• Launch is THE BEST reason to offer your TLD NOW
• If launch is slow, momentum will be hard to regain


Lessons: 3
• Secondary market
– If your plan relies on premium name sales, do two things:
• Look at the data
• Consult an expert
• Usage tracking
– Track usage to help assess acceptance and predict
renewals


Lessons: 4
• Other areas:
– Policy:
• Do it right once: set clear rules and follow them with no
exceptions
– Eligibility definitions
– Verification
• Leverage industry experience on what works
– Recognize that change from current involves risk
• Confusing or inconsistent policies = rejection / lawsuits
– System Acceptability (email, forms, etc)
• Acceptance of your TLD as legit will be slow
• There are still entities who do not accept .INFO addresses!
• Need to resource for calling webmasters and CTOs, etc
• ICANN is NOT responsible for this

Data Sources
• ICANN Registry Operator Reports
– http://www.icann.org/en/tlds/monthly-reports/
• ICANN Archives for new TLDS
– http://www.icann.org/en/tlds/app-index.htm
– In resources section of ICANN’s new site
• www.Zooknic.com: Volume by TLD over time
• Domain Name Journal: secondary market
– www.Dnjournal.com
• Registrar sales/volume data: www.webhosting.info


Advice for applicants
• Start NOW! (Jan 12 is tomorrow)
• Team up with experienced players
– Policy and channel expertise
– Technical experts--don’t build your own registry system
– Insist on a proven track record with ICANN new TLDs
– Be sure your team has ICANN gTLD experience
– Find a team that fits with yours
• Keep your plan as SIMPLE as possible
• Talk to the experts—take advantage of the
experience around you
42

How Afilias can help YOU
• “Registry Services”: Proven, turnkey registry system
complete with DNS supporting 16 TLDs today
• 10 years of meeting all ICANN technical requirements
– Questions 23-44 in the Guidebook
– Pre-delegation technical testing
• New TLD experience to help you qualify, launch, run
your new TLD
– 5 ICANN nTLD launches
– Technology
– Links to registrars
– Sunrise/landrush/etc
43

Free Webinar: Columbia Business School’s
Center on Global Brand Leadership
Who Should Invest in a dotBRAND?
Evaluating the Business Case for a Top-Level Domain Name

October 19, 2011 10:00am-12:00pm (EST)
Panelists:
William Barrett, Global Communications, Deloitte (dot Deloitte)
Karl Isaac, Executive Director, Digital Branding, Landor
Roland LaPlante, Chief Marketing Officer, Afilias
Paul Twomey, Managing Director, Argo P@cific (former ICANN CEO)

Moderator:
David Rogers, Executive Director, Columbia Business School’s Center on Global Brand
Leadership

Diamond Sponsor
© Afilias Limited www.afilias.info

SM

The Expert in New TLDs

Thank You and
Good Luck
NEW NEW

NEW NEW NEW

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