New gTLD Madness?

Back in 2014 I was sharing the platform with a couple of the new gTLD registry representatives at a TRAFFIC conference (one of the last). Both of them were telling everyone at the conference that they needed to buy what they were selling before it was too late. I had a decision....should I gag myself or not?

Escrow.com

I listened as they both told the audience that the new gTLDs were the most awesome thing to ever occur on the Internet. To get into the gold rush all the conference attendees needed to do was secure their stake in the future of domaining!

After all the huff and puff I decided it was time for someone to bring some sanity to the debate and remove the self-imposed gag of politeness. So I waded in and attempted to pour a bucket of hard cold reality over the audience. A summary of what I said was, “There is no business model for investors in the new gTLDs.”

I then ticked off the business models. Do they have traffic? Nope. Can I buy one for $10 and sell it for $2,000? In a market of massive supply….unlikely. Can I buy a premium domain for $10,000 and sell it for $100,000? Nope. Can I build them out? I may as well build out the many .com domains I have.

Have some investors made money selling the new gTLDs? Yes. Just like some people win the lottery….but as a rule there is no sustainable business model for investors.

I then stated that I believed that as investors we were on at least a seven-year journey while the market decided which extension would succeed and which would fail. It would also provide some time to see which of the three major investment business models would become viable.

As I spoke a hush descended over the audience. I then said that some in them would ignore my advice and mortgage their houses to buy some of the new gTLDs. As their cash ran out I would likely pick up some of the domains for registration cost, post seven-years.

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mgilmour
Completely agree with your comments about the demand also the work dotCLUB and dotSHOP have done in their marketing efforts. The p... Read More
05 July 2018
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What’s new with the new gTLDs?

I’ve recently been reviewing a number of new gTLDs to better understand the trends and which ones will potentially be of greater value than others. In my opinion, this regular practice is crucial for any investor that is wanting to gauge when is the best time to stomp down their cash and invest in an extension.

Escrow.com

Overall, the new gTLDs have not had a spectacularly good year. The number of registrations peaked in April at just over 29.5 million but since then there has been a sharp decline to just over 23 million. To better understand what’s going on I dug into some good and bad examples of new gTLDs.

new gTLDs

.CLUB has been the poster child of the new gTLDs and in many respects, rightly so. Backed by a solid team their focused marketing has meant they’ve built what appears to be a good solid base of registrants that are using the extension.

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Interview with Colin Campbell from .CLUB

As a part of the 10th Anniversary celebrations I’m talking with Colin Campbell from .CLUB. Colin is the CEO and one of the founders of .CLUB, and in the video he discusses what's been happening with .CLUB over the past year.

Escrow.com

Colin then shares his thoughts on the controversial pricing increases that some registries have implemented. More importantly for .CLUB domain investors, he talks about why .CLUB is contractually and commercially bound not to follow suit.

This is quickly followed-up by the new startup initiative where .CLUB has purchased a building in Fort Lauderdale Florida for the startup community. They are in the process up fitting the building out and within the next 12 months plan on supporting over 30 startups both with investment and facilities.

I hope you enjoy the easy banter back and forth as Colin and I discuss a wide range of domain investment topics.

Battleframe

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Why .CLUB Is So Successful

I’ve been reflecting on some of the great companies that are being built in the domain industry and I couldn’t go past .CLUB. When you consider the new gTLD have only been in the marketplace for a couple of years it’s remarkable what .CLUB has achieved. There are so many new extensions launched and yet everyone seems to hold .CLUB in high regard. So the question I have is why?

Every company is not built on an excellent team and I just want to highlight a number of the team members that I regularly catch-up with at all the different domain shows around the world. I think that their attitudes and focus really provide a valuable insight into the .CLUB success story.

Colin Campbell (CEO)
Colin CampbellThere are a number of things that strike me about Colin and the first is passion. He’s passionate about .CLUB and provides such a focused drive to see it succeed. That being said, I’ve watched from the sidelines as he’s conducted deals that are beneficial for both parties. He isn’t a scorched earth CEO that has a win at all costs mentality but rather a collaborative one that wants to see others be successful as well.

Dirk Bhagat (CTO)
Dirk BhagatThe first time I met Dirk we were sitting around a fire pit at a hotel somewhere (can’t remember where). Underneath his easy going exterior ticks an incredibly smart individual that, like Colin, has seen the ebbs and flows of the technology industry across many years.

 

Jeff Sass (CMO)
Jeff SassAs chief marketing officers are concerned Jeff would have to be right up there with the most frequent milers ever clocked up. He’s everywhere! We recently chatted in Fort Lauderdale and he headed immediately to Cologne, Germany and we met up a few days later in Hong Kong. Not only does Jeff clock up the miles but he brings an incredibly creative mind to promote .CLUB to so many different cultures.

Michele Van Tilborg (VP Bus. Development, COO)
Michele Van TilborgLike the rest of the .CLUB team, Michele, clocks up the air miles as she makes sure that things happen in one country after another. To understand how dedicated she is to the .CLUB cause, while at DomainFest.Asia in Hong Kong, I watched as she had meeting after meeting, when she really should have been in bed due to being sick. She's a real powerhouse that gets things done.

There are other’s in the .CLUB team that also contribute but the above four are the people I have had the pleasure of interacting with directly. What I’m highlighting is the fact that a great, passionate, focused team is what’s driving the .CLUB brand. At .CLUB's core there is one particular value that seems to stand out more than everything else and that’s generosity.

It’s not often that you can call a business generous….after all, isn’t the goal to make money? When I look from the outside, .CLUB is generous (not stupid) in everything they do. They support the industry through their many sponsorship activities and are very generous with their time. They do whatever they can to help promote up and coming .CLUB based businesses.

For example, they are getting right behind George Verdugo (awesome, fun guy btw) in his plans for hotels.club. George has some incredible ideas for the website and with some of the rates he showed me it won’t be long before he climbs the travel websites ladder of success!

Another example of generosity, is one evening during “The Domain Conference” in Fort Lauderdale, Colin and his wife invited about sixty people to their home for dinner. The food was exceptional, conversation awesome and getting to know Colin’s wife was terrific…..you can really see the real power behind .CLUB :-)

.CLUB is inspirational on many fronts and I’m sure that over a few drinks the team will also share about the many mistakes they’ve also made. Which brings up a last point I would like to make…..they are a fun group to just hang out with. I think this last ingredient is what makes them a very special company…..they all individually and as a team seem to be having a great time expanding .CLUB to the world. Well done!

I thought that it was about time that I wrote about .CLUB as they are really and truly a real beacon of success for the new gTLDs. I really do believe that it's early days for the registry and it won't be long before .CLUB domain extensions are being used everywhere.

I want to state up front that I was not asked to write this article by anyone and that no one has twisted my arm in any manner whatsoever. I believe that great companies should be lauded and .CLUB is one of them.

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Kassey
Very strong management team with years of experience. I see great future for .club in China.
04 October 2016
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Analysis of .CLUB and the New gTLDs

With the crossing over the 10 million mark for the total number of new gTLDs registered I thought that it would be worthwhile conducting an analysis of what is happening in this new market. As is typical of any new market, quite a number of new gTLDs are struggling but as registrations increase, time is on the side of those that have the cash to survive.

Escrow.com

The first chart shows the total number of new gTLDs that have been registered month on month since Feb 2014. As can be seen from the graph it’s basically been a linear growth rate until the last month, where it has taken a definite turn upwards. It will be interesting to see if this recent trend will continue moving forward.

new gtld growth in registrations

 

When we look at the growth rate per month chart there has been a rapid downward slide that has stabilised around the 10% per month mark. This is not unexpected as the initial numbers were small and any growth off a small base will be quite large.

 

What is interesting is the fact that the trend line is flattening out to just over 7% growth. According to a recent report the overall global domain growth is around 6.5% so trending down to just over 7% isn’t surprising. Once again, the uptick in Nov is a bit of an aberration so it will be interesting to see if the trend continues.

Now here’s the challenge for the new gTLDs. According to nTLDstats.com (where this data comes from) just over 8 million domains are parked (ie. 77%) or not being used in the “wild”. What this suggests is that the majority of the growth is coming from the domain investor community.

Why is this a problem? For a start, this means that the majority of domains are not being seen by the general public in more traditional forms of advertising. Hopefully this will change as some of the global brands that have their own extension will begin advertising with it.

Secondly, domain investors are after a return based upon the value of the domain sales that they achieve. Given the massive influx of domain supply this value is unlikely to be realised in the near term. This means that there won’t be as much money to reinvest into the new gTLDs from the domain investor community and it’s very likely that over the next couple of years a lot of the domains will be dropped.

Here’s the other issue. Other than November the number of domains registered per month is basically linear BUT the number of extensions available to register has been growing rapidly! This essentially means that there are more and more new gTLDs fighting over the same sized pie. What this suggests is the new gTLDs have been largely unsuccessful in enticing new money into the domain space and are totally reliant upon a finite domain investor pool of investment funds.

Now let’s take a look at .club as they are often regarded as the poster child of what to do right in this space. Since they were launched they have been growing month on month in a roughly linear fashion until July where growth essentially stopped and then resumed at a more modest rate until October and then skyrocketed in November.

.club domain registrations

Given the northern hemisphere summer period a slowdown in growth for July and August should be expected but the rapid surge into October and November is staggering. I would like to claim that the rapid increase was a direct result of readers seeing the .club banner advertisement on my blog but sadly, this is unlikely to be true…..although I cross my fingers.

Percentage growth in .club domains

I actually believe the team at .club have been really smart in laying the ground work to tap into the Chinese domain market. This became particularly focused since the beginning of September when they attended DomainFest Macau. It was clear that they were on a mission to evangelise .club to the Chinese marketplace.

The recent release of a slew of premium domain names into two auctions has created a huge amount of interest in the extension. This has clearly spilled over outside the auction domains into the wider .club inventory and has resulted in a rapid increase in registrations. It’s being smart about how to leverage these publicity events that has made .club a standout in the industry.

Given the recent surge in registrations, a back of the envelope calculation would immediately indicate that .club is a profitable extension. The entire industry should celebrate any extension getting over the line and this will hopefully spur those that are struggling onwards.

I would not be surprised if Colin and the team at .club are casting their eye over a few of these struggling extensions and considering an acquisition or two. With their proven marketing muscle this would almost be a no brainer. It will be interesting to see what happens in the months ahead.

In the meantime, I'm going to be keeping my eye on the industry as I believe there are a lot more acts to this play before the final curtain is raised.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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mgilmour
Sadly I don't have that information as it's privy to the domain owners. I have seen some new gTLD domains that are with ParkLogic ... Read More
04 December 2015
Mr. Dotdot
I was of the opinion that dot online would thrive but till date I am yet to hear of a single mention of its sale. Could it be that... Read More
04 December 2015
mgilmour
I personally try and go with extensions that make sense. Despite their numbers (sold or otherwise) I really don't understand .xyz ... Read More
05 December 2015
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