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39 days on the road

Back home in Austin after 39 days, 7 countries/territories, 13 flights, 7 hotels, 2 rental cars, countless meetings, Ubers and taxis—and 1 carry on for the whole shootin’ match.

It’s the longest I’ve been away from home in years, although some of that time was spent working from my “second” home in Ireland, where I was a resident for five years.

All told I’ve spent nearly three months total in China alone in the past year. It’s been rewarding learning so much from my Chinese colleagues and friends.

Here are a few pics from various meetings and events with registrars and others in the domain biz in China over the past few months. Some of the friendliest and hardest working people you’ll ever meet in the domain name industry.


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Zone file size of the average new open gTLD in 2016.

Many new gTLD applicants and others have their fingers crossed that ICANN’s new gTLD program will lurch forward over the coming months, resulting in a controlled explosion of new gTLDs that will offer registrants new options to connect with Internet users and lead them to the content that they expect. I’m sure some applicants are dying to see some revenue start flowing in the door, not to mention related vendors.

Hopefully, for many of the applicants that need to turn a profit at some point, before plunking down $185K+++ just to be in the game, have carefully thought out what the market for new gTLDs might be in the future, what volume of competition and negative sentiment they might face, and what numbers they will need to be successful by a date certain.

So what kind of market share can we expect by the end of—say 2016—from the new gTLDs? What kind of monthly ‘net new create’ numbers are needed for a single new gTLD to achieve a particular number by the end of 2016, assuming they can get 36 months of selling time by launching by January 2014? No one really knows, but I’ll take an educated stab at it. 

Having the experience of being involved with the launch and ongoing management of .mobi—I’ll call it a ‘legacy’ new gTLD, or to be technically correct, a legacy sTLD (sponsored top-level domain), I’ve been thinking about how hard it really has been for a non .com TLD to get consistent volume through the channel on a global basis.

A lot was learned through the .mobi experience and I can tell you it is no small achievement to get your registrar channel onboard and with you the whole way—not just during sunrise and the heady land rush, early premium auctions and general registration phases, but for months and years down the road.  Imagine how hard that might be when you are competing against multiple new entrants in the game who are also vying for attention from the registrar channel and potential registrants. Let us not forget that existing incumbent TLDs will likely fight like hell to maintain their market share—and they already have the channel in their pocket for the most part. I believe this will be especially the case for top tier ccTLDs.

For all that was accomplished and spent in the early years of .mobi, and despite some criticism, it is today ranked in the top 30 off the roughly 268 existing TLDs worldwide with nearly 1.1 million active domains in the zone.  The .net, .org, .info and .biz TLDs have greater volume and it’s taken them years to get where they are today.  Repurposed ccTLDs such as .me and .co have carved their niches and enjoyed attention, but even with their well-executed marketing and registrar programs I’m sure they are well aware of the challenges of making a market entry splash and maintaining momentum.

If you take the 15 sponsored TLDs that have been added since 2001 (legacy ‘new TLDs’ if you will) and count their total number of registrations, they amount to less than 5% of the current total estimated number of 252 million names registered across 268 TLDs. The vast majority of that 5% is with .info, .biz and .mobi. I won’t dive in here as to their relevance or other issues for not grabbing a larger market share, just stating numerical facts.

Take away the withdrawn applications and contention sets and there is potential for an estimated 1,112 new gTLDs. Take away the IDNs, the dotBrands and ‘closed’ generics and you are left with about 256 potential ‘open generic’ new gTLDs in the marketplace, assuming contentions, objections and other delay and/or death mechanisms are resolved—but don’t count on that.

So here’s where I think we might be at the end of 2016. This is high-level. If you would like detail on my assumptions and forecast for any set of new gTLDs please contact me. Disclosure: I provide consulting services to new gTLD applicants and others.

I believe .com and legacy gTLD zone files will experience moderate but continually slowing annual growth, ending with 129.5M and 41.5M registrations respectively. ccTLDs will continue their fast annual growth, ending with 163.8M registrations.

But wait, what about the new gTLDs? Well, if applicants, the channel, and the industry as a whole do a bang-up job educating, marketing and selling their value props through existing and new channels—essentially hit the ball out of the park—we could see the global market share for new gTLDs in aggregate reach 18% by the end of 2016.  I mean they/we/you would have to *kill* it to get to that point.  That would be an achievement that means at least three times better performance in 3 years than what the legacy sponsored TLDs have achieved in the past 12 years. That would mean an additional 73.6M new registrations in the marketplace—bringing us to a total of 408.5M names in all TLDs at the end of 2016.

I believe the vast majority of the growth in global registration will come from open generics, as in 94% of that 18% market share.  I will admit there are some unknown factors that could change all this—especially as it relates to what brands could do with their TLD assets—but that’s a post for another day. So if you are an *average* new open gTLD, my estimate points to about 270K registrations in your zone at the end of 2016.  Of course some will do better than average. If you do at least 5 times better than the average you’d be the next .co or .mobi.  If you do at least THIRTY-SEVEN times better than the average you could be the next .org, .de or .co.uk.

No one in this business wants to be average, but to even get to my estimated average you’d have to sell 7,500 net new registrations every month for 36 months to get to 270K in my forecast model.  So do the math and get cracking with your marketing and sales plan if you want to be at least average or better with your channel and end user targets.


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Support the growth and development of the Internet domain name industry.

For many of us in the domain name industry it seems that ICANN’s new gTLD program has been moving along slower than a snail on tranquilizers for the past few years.  That’s all about to change as we seem to be on the cusp of dozens, if not hundreds of new gTLDs hitting the streets before the end of this year and into 2014.

Trouble is, that as ICANN moves from rolling out these new gTLDs at what may be an old-school dial-up pace at first, to likely a fibre-power broadband delegation pace later, the public at large seems to know nothing about all this.

Don’t take my word for it, read the research posted by SEDO earlier today that said “More Than 60 Percent of Small and Mid-Size Businesses are Unaware of New gTLDs.”  We all know that Internet users might get confused by new gTLDs. This has got to change.

And change will be possible if folks such as domain registries and registrars, applicants for new top level domains, and domain related service providers manage to get organized via a new trade association that’s just now getting off the ground.

Thanks to Google’s new gTLD team, a bunch of old (like me) and new faces in the industry got together alongside the ICANN regional meeting in Amsterdam last January.  We talked about setting up a domain name industry trade association to help educate the world on the coming changes in the domain landscape and to support the interests of the domain name industry.

Thanks again to Google, and those that attended that January meeting, volunteers are now working towards getting things going to the point where the trade organization is launched and operating.  It’s very early days and much work remains. So far a very basic informational site has been set up at whatdomain.org.

As stated on the site: “This is an opportunity for your organization to collaborate with your peers involved in the domain name industry to define how the industry works together to promote and ensure success through a period of major change.”

If you are interested in joining, I encourage you to visit whatdomain.org to learn more.  Even if you are unsure of how you might participate you should submit the interest form and the organization will work with you to help you decide.

All in all I believe this initiative is worthwhile and very important. It needs support and execution to ensure the growth and development of the Internet domain name industry.


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New gTLD Target date is April 23? Or is it?

I detect some delight in the domain name community today resulting from the latest posted video interview with ICANN CEO Fadi Chehadé. In that interview Chehadé states “We are now targeting to be able to recommend for delegation the first new gTLD as early as the 23rd of April…”

On the surface this sounds like very good news.  No doubt by stating a date that Fadi said could slip a few days or weeks, but not months, is a sweet sound to many—at least there is a date.

While the entire interview clearly reinforces to me that Fadi is in control and that ICANN will move forward with implementing the program, I am not entirely convinced that the timeline for actual delegation and start of a sunrise period for an average not-in-contention-or-objection new gTLD applicant could move forward (by my calculations as much as 3 1/2 months) unless we hear more about the other processes that must fall in to line.  Fadi did say that various processes are being aligned or are now in alignment, so that is good to hear.

One process that I’m now assuming is on target is the GAC delivery of advice. That’s a bit surprising given the history, but then reading recent GAC statements and seeing how Fadi has reached out to various stakeholders in the short time he has been in control makes it seem plausible.  For example, he states that there has been more progress in his leadership roundtables and discussions with registries and registrars in the past weeks than there has been in the past two years.

So what does the date of April 23 mean for the Priority Draw #1 (IDN) applicant and the average not-in-contention-or -objection applicants that follow?  Well one thing that I didn’t hear are the words ‘requested for delegation.’  I heard ‘recommended.’  Does ‘recommend’ actually mean that ICANN will submit a root zone delegation request to IANA for the Priority Draw #1 applicant on April 23rd? And will they request delegation at a rate of up to 100 per week until they reach the limit of 1,000 for the year?

I’m not yet seeing April 23 a date that the Priority #1 Draw (IDN) Applicant could be live in the DNS, or even requested to be delegated, unless somehow someway the other processes have been changed or greatly accelerated. For example, ICANN has stated that no contracting activity would take place until after the Beijing meeting in mid-April.

Such processes include, for example, the all-important metering rate per week for PDT and Delegation Processing, # of days for contracting, # of days to process PDT, # of days for ICANN to submit root zone delegation request after the applicant passes PDT, # of days for IANA to process the root zone delegation request, # of days after Delegation before Sunrise Period begins.

Using my New gTLD Delegation Date Calculator and changing around a few assumptions, such as reducing the ‘Fudge Factor’ from 110 to 30 days, assuming a metering rate of 100 gTLDs per week instead of 20, slashing in half the time it takes ICANN to submit delegation requests and for IANA to process them, we could be looking at a first actual delegation date of June 3rd with a first assumed sunrise start date of July 3rd, give or take a few days. Holy moly that’s a full 3 1/2 months earlier than my previous calculation.  In theory Draw #1000 (or in sequence but not in contention or objection) could then be delegated by September 27 of this year.  But wow that would take a lot of aligning, pushing and shoving, and assumes no formal objections, no negative GAC advice, lawsuits, etc.

In any event Fadi and ICANN seem to be saying that the new gTLD program is going to happen, and that it is going to happen faster, by possibly as much as 3 1/2 months sooner than some might have previously thought.  If that’s the case, and you have not done so yet, it’s time to start thinking about your target market, your competition, your messaging, your channel, and executing your plan. Is it time to get the party started?


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I’m impressed by Fadi.

I could have ignored today’s ICANN New gTLD Applicant Update Webinar and just read summaries from the usual respected news and industry sources. However, with three hours slotted and likely questions regarding ICANN CEO Fadi Chehadé’s somewhat eyebrow-raising comments at the regional ICANN Registry-Registrar meeting in Amsterdam last week—led me wanting to hear it all myself.

I’m glad I tuned in. The initial odd item was that there was not the usual participant chat-room function. ICANN mentioned this specifically at the start of the webinar. Some folks seemed annoyed but actually I found it refreshing. I think it helped the presenters and audience focus on the content and Q&A without the usual noise—good or bad. Now of course there is controversy and criticism that needs to be heard; but if everyone had been in a real physical room they would not be interrupting the presenter and would not be able to speak at more than a whisper. They’d have to resort to Skype or some other external chat function which we all know goes on at every ICANN meeting. So maybe that’s one reason the webinar ended after 1:50 instead of 3 hours—after anyone who wanted to ask a question was seemingly given the chance to do so—and live on the phone so everyone could hear the question straight from the participant’s mouth.

The welcome surprise was Fadi’s participation and remarks. He discussed ‘Sector Maturity.’  He talked about a possible ‘registrant bill of rights’ and the need to manage ourselves as an industry…or we will be managed.  He talked about opportunities and responsibilities that we need to embrace.  He said we must be mature, responsible, and ‘take care of ourselves.’  He urged us to “rise above our unique or individual issues or lenses” and try to see the bigger picture. It was a bit of a rehash of what he said in Amsterdam but I think it was important that today’s webinar participants heard it straight from his mouth, with all the inflection and tone—and not from an online news report.

Fadi’s remarks demonstrated to me that he is trying to lead a multi-stakeholder organization to fully grasp the high-level purpose and direction to take while also tackling head-on the minutiae and massive undertaking of the new gTLD program—let alone the incredible change management challenges it is heaving upon the ICANN staff.

I won’t get into all the real challenges that we all know still need addressing, but what I did hear at a macro level from Fadi and the others made me shift from negative to neutral at this stage on the prospects of the first new gTLDs being delegated into the root before this year is done. Unfortunately I can’t shift to positive until I actually see ICANN adhering to deadlines. There are several coming down the pipe in the next 90 days so let’s see what happens.

Fadi also remarked that “we will not jeopardize the stability of the DNS,” and are doing everything they can to keep the new gTLD program on track. He said, “to be super clear,” that ICANN is doing the work that is expected of them and that dates for the new gTLD program discussed in Toronto are on track. “We will not change it, unless there are DNS stability reasons for doing so.” OK, so that’s an out that could be applied in a variety of theoretical situations, but his further statements that he intends to increase the volume of communication on new gTLD operational issues and plans to attend future webinars leads me to believe we have a capable and likeable leader at ICANN.

Leaders continually guide, assert and clarify common goals in the big overall picture while getting their hands dirty.  Fadi seems to be doing such things and to that I offer a toast: “May we see deadlines met and new gTLDs delegated this year with no stability issues at all to the DNS.”

 


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The inside track to TLD success

I originally posted these thoughts via the DomainDiction blog in June of 2012.  I believe they still hold true today.

So perhaps you have survived reading the Applicant Guidebook, paid your fees and waded through the TAS process. Assuming your application is successful, how are you going to engage your channel(s)? What will you need to do to garner their attention? Why should they care about your TLD? What will you need to do to make them choose to work with you? Or will it be the other way around—in that YOU will need to decide who to target and YOU will need to decide who you want to work with?

I think some new TLDs will need to look beyond the traditional registrar channel, but many others will depend on the established global distribution network to help them quickly build essential new “create” revenue. Most new TLD business models will absolutely have to have this revenue just to survive year one, so let us focus on the registrar channel in this first blog post.

One need not look too far beyond the introduction of the older “original” new TLDs sanctioned by ICANN such as .info, .biz, .mobi, .tel, .asia, .museum, .jobs, .pro, .xxx etc. and “repurposed” ccTLDs such as .tv, .me, .co, .cc to learn what seems to have worked and what does not work.

Here are some things that I know that work:

Relationships. You must have them in the registry/registrar world and the domain investor (domainer) world. As digitally connected as we all are, nothing beats old-fashioned relationships.

Trust. Do what you say you are going to do. Registrars don’t like surprises and they do talk to each other. Your reputation alone may determine whether you can even get in the door.

Plan ahead. Way ahead. Registrars that matter don’t like doing things last minute.

You better have a plan that makes sense, even if you have the relationship–with-the-registrar part down. Flush it out. Twist it around a little with a few test cases, but in the end it better be spot on. Otherwise you are probably toast. You need to communicate how you are different, how your domain will work. Define the problem and what you are doing to solve it, how the registrar and end-user registrant will benefit AND of course how much money the registrar can make!

You must inform registrars of key sunrise, landrush and general registration dates/deadlines/policies well in advance. Registrars must clearly understand your application, technical and OT&E procedures. They must understand payment procedures and all fees.

BD. BD. BD. Market. Market. Market. Sell, sell, sell. If you are not doing all three you are not going to capture revenue. You must first get to the registrar and then, even if they buy your story and your deal, you will have force feed many of them with your messaging/value proposition along with other critical integration information that won’t make them choke on their morning coffee and croissant vs. all the other stuff they have to do that day/week/month/quarter/year.

What doesn’t work:

Registration restrictions. The more you have the more I can guarantee you will lose in new creates and the fewer registrars you will have in your distribution channel. It creates confusion. Besides, registrars don’t like it when they get more support calls and their costs go up. The history of the DNS is littered with restrictive policy TLDs. If you want to join me for a beer sometime I could easily discuss how much money has been made and lost in this industry with overly restrictive TLDs.

Not talking directly and often to prospective and existing end-user registrants. Those who have studied the history of the DNS know of the wall that is supposed to exist between registries, registrars and the registrar’s customers. We all know that has changed and will change again moving forward, but beyond just offering your TLD in a registrar’s storefront you must establish a relationship and build trust with your end user base. That relationship must not end a few months after launch. It must go on, for years.

Marketing and PR programs with no clearly defined goals. How will you gauge success? How will you know you are on track to achieve that success? How many registrations do you need on a daily basis to achieve your goal with your top 10 accredited registrars? Do you even know who your top 10 partners should be?

I’m simplyfing here based on past experience at dotMobi. How the TLD game is played with registrars moving forward is changing and will likely change quite a bit with the introduction of new TLDs.

The introduction of new TLDs, to the scale being contemplated at this time, represents an incredible opportunity for those that understand their market and the channel opportunities to make a difference and ultimately profit to a great extent. I look forward to examining issues in greater detail and to your feedback to get the conversation going!