Report On ‘Registrar New gTLD Market Share’ Attacks .XYZ and Network Solutions

“Perhaps it is better to be the leader on a few high-potential TLDs than to be in “pole position” on a TLD artificially inflated by short-term promotional tactics.” OUCH!

This is a conclusion of the September 2014 edition of the Afnic Industry Report on Domain Names, that focuses on the representativeness of some of the main registrars in the newgTLD “Top 10” and the efficiency of some of the other registrars of lesser size on these new markets.

Four of the first registrars in the world are not part of the nTLD « Top 10 ». More agile challengers are taking advantage of this situation.

This study focuses on the top 10 registrars worldwide to assess how they are positioned with respect to the new TLDs. By contrast, it seemed interesting to note some of the factors that have allowed four “challengers” to move up into the “TOP 10” on new TLDs.

Data are based on ICANN reports as at 30/04/14 and Ntldstats.com statistics as at 31/08/14.

The study identifies four categories:

• #1 Ratio less than 0.5: weak positioning
• #2 Ratio between 0.5 and 1: moderate positioning, with no emphasis on nTLDs
• #3 Ratio between 1 and 2: strong positioning, with an emphasis on nTLDs
• #4 Ratio higher than 2: strong positioning

Here are some interesting parts of the report:

“Surprisingly, because it is the leader on a fairly large number of nTLDs, GoDaddy is in this (#2) category. The explanation is that the registrar is well positioned on a large number of “small and medium” TLDs, which is reflected in 12% of the .guru, but not on some nTLDs that have achieved very high volumes.

Note that these two registrars are also part of the “TOP 10″ in terms of nTLDs. Their market power is such that their relatively moderate performance on the nTLDs does not prevent them from obtaining first place in terms of market share. This infers that these registrars have not yet tapped their full potential in the nTLD segment.”

“As a result, the decision by a registrar to position itself on a given nTLD may condition to a relatively decisive degree its acquisition of additional market share. This being said, the financial terms of the gains in market share are sometimes extreme (free or systematic “distribution” of nTLDs to customers who have not requested them). Today’s dazzling ratios therefore remain highly scalable, the portfolios they form being much more exposed to non-renewals than smaller portfolios, but for which holders have paid to obtain their domain names.

Sheer volume is not enough to account for success in the medium to long term, and “positioning” ratios of this kind, while they quantify a situation at a time T, does not enable forecasts about the future performance of the various stakeholders. Their performance depends on their ability to keep holders and convince them to actually use the names they have registered, a problem common to registers and registrars alike.

The “positioning” ratio, therefore, merely reflects a level of performance against a given potential. This level does not necessarily correspond to the ambitions of the registrars when they chose to propose a given nTLD to their customers. A large number of factors may be involved, such as insufficient promotional campaigns on the site of the registrar, a lack of enthusiasm among resellers, or simply a customer base that is unresponsive to nTLDs because they are insufficiently aware of their arrival on the market. None of these factors being insurmountable, registrars with moderate results today have every chance of improving their positioning if they give themselves the means.

A bias in the ratio, which can be verified for GoDaddy, is that it considers the overall situation, regardless of the rank of the registrars in each TLD market. Perhaps it is better to be the leader on a few high-potential TLDs than to be in “pole position” on a TLD artificially inflated by short-term promotional tactics.”

AFNIC is the French Registry for the .fr (France), .re (Reunion Island), .yt (Mayotte), .wf (Wallis and Futuna), .tf (French Southern Territories), .pm (Saint-Pierre and Miquelon). AFNIC is also positioned as a provider of technical solutions and services for registries and registrars. AFNIC (the French Network Information Centre) comprises public and private stakeholders, including government authorities, users, and Internet service providers (Registrars). It is a non-profit organisation.