Andee Hill from Donuts explained what the New gTLD registry’s business plan is, regarding pricing on its 200 new extensions.
Uniregistry’s planned price increase put all New gTLD registries in a tough spot. I wondered how they felt and asked a few people from the registries while some made comments on blogs and forums.
Here is what Andee Hill said on gtld.link:
“Donuts isn’t in a position to comment on a competitor’s pricing decisions. Speaking for ourselves, however, we have no plans to increase prices for existing registrants — this is not part of our business plan. We voluntarily entered into agreements with our registrars that dramatically limits our ability to increase prices for existing registrants. Case in point, in the only instance to date of an upward price adjustment (effective last October 1), we increased our prices for only unregistered names and exempted existing registrations.
We understand the negative impact that unexpected price increases have on domain investors, and we want to underline again how much we appreciate the value that domain investors bring to Donuts and to the industry.”
(BTW the forum is located on a Uniregistry extention: .link.)
Colin Campbell, CEO of .Club that “.CLUB has voluntarily signed a price protection clause with the registrars for the first 5 years which limits to inflation or 15%.”. You read all about .Club’s pricing strategy here.
Here is what GoDaddy (“Regardless of the economics, it’s an extremely poor customer experience.”), Rightside (“I want to reassure our valued customers who have invested in our TLDs that we will not be following suit.”) and Radix (“We have no immediate plans to increase our wholesale prices.”) said about this issue on DomainInvesting.com and TheDomains.com.
I think all of us have dabbled in GTLD’s, and kept an eye out for a good one if we could grab it at an affordable price to some degree.
After seeing snipets of contracts, and the what if’s, and the actions of Uniregistry with their 3000% price increase, I am cold to GTLD’s. I think you really have to invest sparingly, and at arms reach, if you can’t afford to lose it, or walk away from it, don’t bother. The issue is most of them have a huge upfront cost now.
The end users are a trickle, they simply want .com, I have done tests where I have registered my matching .com to gtld carbon copy, and offered them the gtld for 1/5th of the cost, they don’t want it.
You probably couldn’t even give them the new domain for free @Trent.
“No plans” translates into “It’s gonna happen sometime in the future.” 🙂
It may happen but there is a big difference between 10% or 20% and 3000%.
There is a big difference between 10% or 20% and 50% Konstantinos. 🙂
Konstantinos, they will do whatever makes them the most money, doesn’t matter what the PR people say now, they have no price protection for registrants, that is a fact. If there was they would come clean and release the documents.
Watch Frank’s number like a hawk because if his drop rate is less than the price increase you’ll see a flood of registries copying his lead.
I don’t care about Frank’s numbers. I bet he will make more money on these few extensions but he will lose a lot more from other parts of the Uniregistry business.
Registries with very high base renewals are dropping their prices at this point. Look at Rightside and Boston Ivy. (and some other registry I can’t remember now)
Do you think that .xyz can or will raise their prices to $100? Who will be around after a year? Even if they make some money on the 1st year it will become a zombie TLD and die off after a few years.
Uniregistry’s problem is much bigger because they are also a registrar, parking company and marketplace. This move will affect everything.
I was actually thinking of moving a big part of my portfolio to Uniregistry. I was between 2-3 registrars. Now I will certainly avoid Uniregistry probably go to Epik.
I will slowly take more of other business somewhere else. I have already be testing Efty and will soon move 2000+ names there.
It took me more than a year to move out of Moniker but I did it.
Epik has a great monthly payment plan built into their platform, with paypal payout, really easy.
They seem to get it, but left lots open to interpretation in case changes are needed. It wasn’t exactly the assurance I was looking for, as New G investor, but it helps ……They say, “We voluntarily entered into agreements with our registrars that dramatically limits our ability to increase prices for existing registrants.”
What is the limit entered into agreement?
How long is the agreement valid?
Aaron you bring up a very strong topic here, yesterday Godaddy commented how they were not happy with Uniregistry upping the 3000%, because Godaddy markets such products to real in house end users who come to them for their advice, and services in such cases.
They represent that product, and I know it’s not Godaddy’s fault, but they get the customer blow back, by getting yelled at on the phone, when someone builds a webiste, on a $23 domain, and now has a $300 annual renewal, which is not in line with cost of inflation % increases we usually see of 5-10%.
It just comes off as pure greed, and not caring about your customer. I guess that is what Uniregistry is telling us their company represents. So all you who have moved your domains over to Uniregistry, you should be aware if business is not good, be prepared for similar situations if the company needs to make changes.
I will tell them again if you are so hard up for cash, slow your roll, and over aggressive bidding at namejet for .com’s, as I once heard nobody will want them anymore ah hem.
I respect that Andee went on record. Good on you, Andee. In addition, for the peace of mind of the fast-growing universe of nTLD investors relying on Donuts TLDs, a statement probably should come from an Officer and/or Board Director. DigitalTown, the other company I lead, owns ~23,000 .CITY domains, for example. Given the strength of the Donuts balance sheet, and the efficiency of their model, I don’t see them pulling a bait and switch. Of the new registries, I have found the Donuts guys to be the ones who most consistently think long-term — not holding back inventory and strategically discounting for initiatives with vision and scale. In terms of enterprise value, Donuts has the most to gain from the broad scale adoption of descriptive TLDs.
So Rob if Donuts only has to increase the price to $300 per .city domain, and you will owe them $7,000,000 annually. That is a big liability in the wild wild west, one bad investment, and that strong balance sheet goes out the window.
Rob, let’s be honest… Andee Hill’s assurances mean nothing in the long run.
Epik is a great registrar and you seem like an honest businessman. You best bet is to drop all those .CITY domains. Put the money toward better extensions .COM, .ORG, or ccTLDs. 🙂
He can’t he has setup a whole new business to run around them.
@Trent is right. DigitalTown is a bet on SmartWeb, among other things. More here in case you missed it:
As for DigitalTown’s exposure to .CITY, I am betting on the integrity of Donuts as the registry operator. I believe this trust is not misplaced. They are still highly dependent on the registrar channel. They have a small but capable marketing and corporate development team. Donuts can continue to scale their 198 registries by partnering strategically with channel partners like DigitalTown that gave them scale with .CITY. Even at $13/year per domain, they have a fine business. Mission accomplished and a sustainable win-win They need more partners with vision and resources that can create value around name spaces.
By contrast, what Uniregistry did this week is obviously disappointing. I actually believe it sealed their fate as a registry in terms of the domainer and registrar channels. Going forward, I doubt that Epik will be adding any new Uniregistry TLDs going forward.
As it was, the volume of business we do with Uniregistry was so immaterial it hardly matters. In fact, as I reflect on the last couple of years, I really don’t even think Uniregistry had a sincere plan to rely on the registrar channel in the first place, other than perhaps a few really large registrars. Now it all makes sense. Has Uniregistry placed their strategic bet entirely on the end-user? Perhaps:
1. Underserve the registrar channel – check
2. Underserve/Exploit high volume domain investors – check
3. Pursue lots of end-users that won’t know better – check
Really, the jump to #3 is a big bet. While Frank is famous among domain investors, there is no “cult of Frank” among consumers. I wish Frank all the best with that move. Professional domain investors have been ardent acolytes of Frank for many years. Epik will be delighted to fill the gap among domain investors and now with Undeveloped in the Epik fold, we’ll help domain investors sell through to end-users. It is going to take a lot of marketing money, and with very large gross margin on each domain, it just might work. Or not.
As for Epik, here is the bottom line for domain investors:
We are one company: Epik Holdings Inc, run by yours truly.
We operate as multiple brands: Epik.com (Full-service Registrar and Host), Undeveloped.com (Marketplace for Digital Brands), Anonymize.com (free privacy), Masterbucks.com (tax-free payment).
We are united by one promise: We will not screw you. Ever.
Drop them as quick as you can, why would you even want, 23k .city domains? In 10 years they’ll still be worthless and they’ll probably have $100 renewals.
@Andee Hill, on this comment: “We understand the negative impact that unexpected price increases have on domain investors, and we want to underline again how much we appreciate the value that domain investors bring to Donuts and to the industry.”
Very nicely put, and much appreciated. As far as investors dollars go, most investors will deliberately go with the people & companies that walk-the-walk and who demonstrate consistent integrity in their daily business dealings.
Donuts should keep the credibility and stability level the same as that of COM. Then it will be loved by both domainers and end-users. Luckily all my new GTLDS (although not many) are Donuts extensions.
They can’t because the US government doesn’t given a damn about any new tld. The problem is you can never trust the registry, nor can you trust ICANN, they’ll sell you down the river. It needs government oversight to keep things in check, that is the only reason .com and major cctlds are stable.
Yes, agreed. However, an extension like BIZ has shown a long proven record of credibility and stability, hasnt t?
I like Paul Stahura’s accounting method for the Donuts strings, whereby all their strings are profitable. Following is part of a comment he made in late 2015 on TheDomains (“Donuts: We are not Going To Delete New gTLD Extensions”):
“…Donuts is profitable. We think of all the TLDs as one big registry. Its profitable, so all our TLDs are profitable…”
This issue of unregulated price increases is exactly why I didn’t buy any new gTLDs. And I’m not re-assured by assurances of no price increases for five years – or limits of 15%. Five years is a darn good holding period, just ask Mike Mann.
ICANN should have mandated a system similar to that of dot com.
My math skills are pretty bad, but 15% compounded for just five years looks like this (based on a $10 starting point):
10 11.50 13.22 15.20 17.49 20.11
So theoretically the price could double every five years, which would be significant in a big portfolio.
I hope Verisign considers addressing this issue before the dot web launch.
“We voluntarily entered into agreements with our registrars that dramatically limits.”
If you can share details, that might help consumer confidence. Questions arise not only when a domainer buys a domain for the first time but also during later negotiations to sell it on to an end user. Not all end users think to ask, but some already do. Meanwhile, it’s hard for consultants – or even web designers, for that matter – to advise their clients to adopt an nTLD unless they feel there’s reasonable pricing stability. When a client gets a nasty surprise down the road, it’s our reputation at stake.
Transparency helps stability. Stability helps ease buyers toward the unfamiliar. Ultimately, Transparency means Stability means Sales. Other registry operators may not follow Uniregistry’s example; but they’re perceived as more risky now, in the absence of any guarantee. nTLDs remain unfamiliar. Buyers are skeptical or hesitate. Any increased risk tilts the scales away from Yes.
I almost lost a deal this past week on a .glass domain name because the buyer asked GoDaddy and was told that the domain has a premium price without further details.
The renewal was actually $22. After I provided some more pricing info to the buyer the transaction was completed.