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.

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.

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.

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.

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.