TLD Industry First Half 2016 Insights as posted on CircleID on July 11, 2016:

TLD Industry First Half 2016 Analysis & Insights (Infographic)

The TLD industry First Half 2016 infographic reflects some of the industry changes and highlights. The data analyzed within the infographic is based on the following:

• Revenues are based on the average retail price over four registrars (101domain, eNom, GoDaddy and United Domains) at the end of June 2016.
• Top three TLDs launched in 2016 are based on TLDs entering into General Availability after January 1st and based on volumes and not revenues
• For greater insight, the TLDs have been separated into four quartiles or ‘tiers’ with tier 1 being the top 25% and tier 4 being the bottom 25%.
• The top ten based on projected yearly revenues based on daily registration volumes
• New TLD industry First Half 2016 TLDs contained in the data set reflect open TLDs and exclude single registrants such as brands
• Initial registration upswings have been eliminated with TLDs in the data set to be in General Availability for at least 60 days
• Free or significantly low registration pricing must have had a renewal period otherwise, it has been excluded from the analysis as sufficient renewal data to form meaningful outcomes is not yet available
• Registry revenues do not include premium name sales as dependable revenues are not available
• Operational losses are based on TLD revenues with a conservative $150k in expenses

New TLD Industry First Half 2016

New TLD Industry First Half 2016 Analysis and Insights 

• Average prices were based on prices at the end of September retrieved from 101domain, eNom, GoDaddy and United Domains.  If a TLD was not found on any of these sources websites, an alternative source was used
• The data set contains 426 TLDs in general availability for at least 60 days and have had a full renewal period if they had a low-cost/free registration period
• Average number of registrations per day is 61.3
• Top 25 TLDs account for almost half of revenues and two-thirds of registration volumes
• Less than 12% of TLDs will exceed ICANN’s minimum yearly fee
• Largest group of TLDs are in the $20 to $25 retail price range
• Average revenue of all gTLDs within the data set is $405k (down 16% from Dec 2015)
• Average retail prices ($31.24 to $123.19) within each tier differ yet the median price difference is minimal ($29.49 to $33.74)
• New TLD industry First Half 2016 reflect all Tiers having a weak or very week correlation between price and volume
• Based on today’s data, 53% of TLDs are projected to operate at a loss for the next year with a conservative expenses of $150k

Tier 1:  Trailblazers – A strong pack of leading TLDs who continue to grow the gap over the other three tiers 

• Still remains true, registrants will choose and pay for a meaningful, relevant TLD which reflects the higher than average retail prices in Tier 1
• TLD industry First Half 2016 reflects a reduction in prices is not being offset with an increase in volume
• Projected yearly volume has increased quarter-over-quarter
•  Average revenues for the first time have declined by over $250k (~16.5%) when compared to Dec 2015
• Median revenues have also declined by $125k (15%) over Dec 2015
• The large volume and higher prices of TLDs in Tier 1 help ensure their financial success
• Surmise:  Strong TLDs are understood by registrants and/or have promoted the TLD so registrants recognize it.  This tier will continue to grow and will receive the biggest (and most deserved) benefits from industry growth
• Tier 1 TLDs are shorter in length than any other tier with an average of 5.35 letters
• Tier 1 TLDs include:  .loan, .sucks, .auto, .design, .global, .company, .photo, .rocks

Tier 2:  Path Finders – Finding their way

• Average and median revenues in Tier 2 have declined by 19% and 20% respectively with the average revenue of just over $200k
• Average retail price is $75.21 and a median of $29.49
• The price-volume correlation is no longer a consideration in any Tier
•  In every case of singular versus plural TLDs, the singular TLD ranks higher and in 80% of the cases is in a higher tier i.e. .photo and .rent is in tier 1, .photos and .rentals are in tier 2
•  TLD industry First Half 2016 Tier 2 TLDs have an average length of 6.11 characters
•  Similar TLDs are more likely to be in tier 2 with over 2/3 having a higher volume at a lower retail price i.e. .accountant/.accountants, .gift/.gifts, .market/.markets
•  66% of similar TLDs with a shorter length will have a higher registration volume i.e. .gift/.gifts, .review/.reviews, .market/.markets
• Average volume is down 16.5% over Dec 31th to a projected yearly volume of 7,000 registrations
• Tier 2 TLDs include:  .taxi, .tours, .school, .social, .money, .brussels, .gallery, .loans, .style

Tier 3:  Campers – Niche groups of TLDs

• Niche TLD Registries like .pizza, .vet, .rich, etc. appear to have projected the lower volume and have offset it with a higher price
• Average retail price in T3 is $72.35 and a median price of $33.74
• Registration volumes have decreased by 24% resulting in a decline in average revenues of 21.5% and a median of 22.2% over Dec 2015
• Average TLD length is up to 6.35 characters in length
• With an average retail revenues of $89k TLDs in this Tier should be calculating the financial impacts on their business and analyzing their strategic plan forward
• Tier 3 TLDs include:  .pharmacy, .build, .fans, .tax, .green, .degree, .parts, .limited, .toys, .graphics, .capetown, .camera

Tier 4:  Hikers – Determining a pathway up!

• Lowest average retail price of $35.69 (up from $31.62 in Dec 2015) and a median price of $29.74 (also up from $28.74 in Dec 2015)
• Total average/median revenues are down from Dec 2015 by 25% and 23% respectively with average retail revenues of $32k
• Projected volume has declined by a significant 38% over Dec 2015 to an average of 1,150
• With low total projected retail revenues, most if not all TLDs in Tier 4 are operating at a loss
• Similar to Dec 2015, gTLD industry First Half 2016 has 48% of IDNs are in Tier 4 (26% in Tier 1, 22% in Tier 2 and 4% in Tier 3)
• Tier 4 TLDs include:  .fish, .reisen, .glass, .villas, .fail, .town, .rip, .bargins,  .futbol, .memorial, .organic, .work,

gTLD Business Implications for first half of 2016 and the road ahead

• Average registration volumes have increased to 22,360 an average increase of 5,650 Dec 2015
• Average and median retail revenues have declined on average by 16.9% and 16.4% over Dec 2015 to $404k and $144k respectively
• Tier 1 Trailblazers continue to increase the gap from Tier 2 in revenues and registration volumes
•  Average retail prices have increased by $17.20 over Dec 2015 with no change in the median price
• Increased premium name sales will help improve the financial performance of the TLDs which has not been taken into consideration in the financial projections contained within
• Over 50% of TLDs will be operating at a loss for the next year with the current volumes & prices

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