gTLD Statistics and Business Implications Q3 2015

October 7, 2015 Christa Taylor

The associated article can be found on CircleID

Top Level Domain Statistics and Business Implications Q3 2015 Overview

Average prices were based on prices at the end of September retrieved from GoDaddy, United Domains and 101 Domains. If a TLD was not found on any of these three websites, an alternative source was used
Average number of registrations per day is the same as in Q2 at 33
.club continues to lead the market in both volume and revenue
Top 25 TLDs account for over a third of revenue and volume
Largest group of TLDs have between 1 to 5 daily registrations
Number of TLDs that will exceed ICANN’s minimum yearly fee is 8 plus a couple exceeding dataset (low-price in exchange to future renewals)
Largest group of TLDs are in the $ to $75 retail price range
Average revenue of all gTLDs within the dataset is $365k
Average retail prices ($35.16 to $83.82) within each tier differ yet the median price difference is minimal ($31.74 to $35.99)
Tier 2 is the only tier with a strong correlation between price and volume
Based on today’s data, 75% of TLDs are projected to operate at a loss for the next year, conservatively

Gap from Tier 1 and all other TLD tiers is growing

Price is not propelling the volume, the caliber of the TLD is reflecting that registrants will choose and pay for a meaningful, relevant TLD
Over two-thirds of geographic TLDs are in tier 1 and 2
Yearly volume has increased quarter-over-quarter in both percentage and in volume
Strong registration volumes along with price
Surmise: Tier 1 TLDs value are understood by registrants and/or the registries have promoted the TLD so its value proposition is understood

Price is a factor in determining the TLDs volume
Difficulty is having registrants understand the value of the TLD and willing to pay for it. Tier 1 TLDs have this figured out
TLDs that are similar and are first to market are 75% more likely to be in a higher tier
Overall volume of transactions have declined from Q1 and Q2
Average retail price of TLDs in this tier have declined in value
Surmise: Tier 2 TLDs will need to put in a significant amount of work to become a Tier 1 TLD

A lot of niche TLDs where registries projected a lower volume and rightfully, increased price to make the TLD financially viable – expect that this will work
Small increase in the number of registrations
Big jump in the average retails prices as Tier 4 TLDs move upwards due to increased revenues again reflecting that registrants will purchase a meaningful, relevant TLD
Surmise: Niche TLDs will be financially viable but those TLDs that are not niche focused have a lot of work ahead of them to be financially viable over the long-term and as more TLDs enter the market the work to move up will increase

Low daily volumes and retail registration prices
Only tier with clusters of TLDs with Political TLDs such as .democrat, .republican, .vote, .voting and Military TLDs such as .army, .navy, .airforce
Registration volume has increased
Average retail price has declined
Higher priced TLDs who have provided additional benefits or value add to registrants have moved to a higher tier
Surmise: this tier is full of potential yet it needs to be acted upon. Adding additional benefits/platform may be beneficial. Also, with a note of caution, consideration of a low-price in exchange for volume may be a business model to be considered by TLDs in their tier

gTLD Business Implications Q3 2015 and the road ahead

Revenues and volumes will continue to increase
Volume of premium names will also grow in both volume and number of transactions
75% of TLDs will not be profitable for the next year based on today’s numbers
More TLDs are still entering the market increasing competition and the need for registries to be more creative with a solid value proposition
Tipping point has not been reached requiring the entire TLD industry to work together to bridge the gap to the outside world!

Please do not hesitate to contact us for any questions, insight or items to consider for future analysis.