Domain Registrations Face An Uncertain Future But Opportunities Are There: Domain Pulse Panel

DomainPulse2017_logoDomain name registrations are in a state of flux around the world. While registrations in the more than 1,200 new generic Top Level Domains (gTLDs) continue to grow strongly, registrations in the legacy gTLDs such as .com are declining and among country code Top Level Domains (ccTLDs) registrations are growing very slowly. And the trend is only likely to continue.

These are the findings of research conducted by CENTR and presented by Patrick Myles, CENTR Data Analyst, on day one of the Domain Pulse conference in Vienna last Thursday 16 February, attended by around 300 people. Domain Pulse is the annual conference of the registries for the German-speaking countries – Austria (.at), Switzerland (.ch) and Germany (.de).

Among European ccTLDs, the focus of CENTR’s research, Myles noted how growth rates (not registrations) have been declining for several years with an apparent stabilisation in the last few years.

So is it possible to arrest this decline in TLDs apart from the new gTLDs, and even in the new gTLDs will their growth rates come to a halt sometime soon?

Domain Pulse panel on "What's the solution? Marketing - Diversification - or...?" with, from right to left, Kevin Murphy (host), Neal McPherson, Katrin Ohlmer, Toby Hall and Michiel Henneke

Domain Pulse panel on “What’s the solution? Marketing – Diversification – or…?” with, from right to left, Kevin Murphy (host), Neal McPherson, Katrin Ohlmer, Toby Hall and Michiel Henneke

In a following panel session, Michiel Henneke from SIDN said the .nl registry is particularly worried. In a country with 17 million people and 5.7 million registrations, and now the .amsterdam new gTLD, they have to focus on a probable saturation and face a future of low, if any, growth in .nl. The Netherlands also has less of a profile, Henneke said, than Amsterdam, making the city new gTLD appealing in international markets.

Even the rise of new gTLDs poses something of a threat to ccTLDs. Henneke noted that a few major Dutch companies have established their own TLDs and others, along with some regions, are interested in future applications. This could easily result in a decline in registrations in other areas as major brands often have hundreds, if not thousands, of registrations and small business may find a regional gTLD more appealing.

Even SIDN’s own research shows a worrying trend. Usage of websites is increasing but Google and Facebook are taking out an ever larger piece of the pie and it’s ambiguous as to whether young people are interested in domains.

But there is a bright spot – whenever EURid conducts a promotional campaign, .nl registrations rise!

Looking to the future, Henneke said “diversification not an option for every ccTLD as they’re answerable to government bodies. But SIDN has been experimenting with opportunities in similar areas. “DNS is required for e-billing so SIDN became a co-creator of a DNS billing service in the Netherlands, but there are few other markets that are as attractive when it comes to revenue as domain names and the e-billing service is just a small part of revenue. We’ve also taken over an e-identity company with 12 million users, so we believe this will be a significant contributor to future revenue.”

For Toby Hall, CEO of MMX who operates 26 new gTLDs, they have a focus on China where there are huge opportunities. But this is an opportunity that many ccTLDs don’t have. In a number of cultures where there’s an entrepreneurial spirit and energy that could have a positive outcome for all in the industry. Hall has found that the younger generation are wanting to use TLDs for other reasons than simply for a website or email, and that kids often relate to email as something in school.

“For the long term integrity of any domain name it has to resonate and have something of value,” Hall said. “We should be wanting to encourage new ways of thinking for new gTLDs”

For .berlin, they have had their own experiences. In a bid to stimulate registration growth in the early days, they gave away or sold cheaply around 90,000 domains in the early days, but they didn’t gain anything long term as many of these didn’t renew. Three years on from the launch of General Availability, registrations have now stabilised and are gradually increasing, now sitting at 59,000. These days the registry has even increased their registration fee with no detrimental impact on registrations.

Even MMX has had their own learning experiences. In the early days MMX set up a registrar to sell the registry’s own domains but they found this was “a wrong turn” as it created tension when doing deals with key registrars, and it was expensive. “It doesn’t make sense to create a distribution channel one will be competing with.”

Katrin Ohlmer, CEO of Dotzon, said it’s “not about the number of registrations but the usage and addressing the right target group. One of the main tasks for registries is to get message across is that a domain name is useful for a number of reasons, not just web and email.”

For .berlin which Ohlmer has been involved in from the start, 50% to 60% of .berlin domains are in active use.

On the threat to ccTLDs. Ohlmer observed that Audi has been setting up domain names for each of its dealers in Germany. Ohlmer also believes that with usage by brands, awareness of new gTLDs will increase and result in more registrations.

To drive registrations, Ohlmer wants to see it made easier for people to use their domains.

“For kids, it’s more about how easy is it to use for websites. If getting a website was as easy as getting a Facebook page, many more would have their own website and domain name,” she said.

“We need to change a lot of the language associate with domain names to appeal to a wider audience,” said Hall.