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.CLUB nears profitability, talks renewals and “trial” domains

Kevin Murphy, September 4, 2017, 22:03:10 (UTC), Domain Registries

.CLUB Domains is nearing profitability and poised to become a “growth engine”, despite the view that most of its current domains are not expected to renew, according to its CEO.

Colin Campbell told DI today that the company made $6.7 million in revenue last year, and is “very close” to breaking even.

The company reached one million domains under management milestone in June, but Campbell freely admits that the majority of its current domains are unlikely to renew.

Almost 700,000 of these domains are what .CLUB considers “trial accounts”, he said. These are domains that typically sold for under a dollar — .club has been seen for sale as low as $0.88 — to speculators.

The registry usually sees a 10% to 15% renewal rate on these domains, he said.

Of the remaining 300,000 “solid, regular registrations”, Campbell said he sees first-year renewals in the 68% to 70% range and subsequent years at 80% to 90%.

The company typically only discounts on its first-year registrations, so renewal rates are a much better indicator of performance.

He said .club has around 120,000 web sites (not including parked domains), some of which are showcased on its web site.

With this in mind, renewals are at the forefront of Campbell’s mind. He said a key performance indicator .CLUB uses is “average cost of acquisition per renewed domain”, which the company tracks on a per-registrar basis.

The company invested $3.3 million in marketing in 2016, he said. That does not include rebates to registrars participating in volume programs, but it does take into account acquiring prominent shelf space on key registrars, he said.

“We’re very close to break-even and we’re still going to be able to invest multi-million dollars in ad campaigns and marketing,” he said.

“We’re going to have a company that’s breaking even and is still going to be a growth engine,” he said. “We’re going to be able to sustain a path of growth. I don’t know too many TLDs who could say that. Of course, if you reduce your expenses down to nothing you can make a profit, but can you also be a growth engine?”

“That’s where I feel like a TLD needs to get to, to be a sustainable long-term presence in the market, like a .org or .net or .co,” he said.

Despite the narrowing losses and starkly higher volumes, the $6.7 million in 2016 revenue is a lower than the $7 million in 2015 revenue Campbell told Domain Name Wire about a year ago.

Campbell said today that the reason for the dip is that late 2015 saw many gTLDs (old and new, even including .com) benefit from a bump from the Chinese market. .CLUB’s top line was particularly exposed by some premium sales it made to Chinese investors during that growth spike.

Premium sales have also been performing well in 2017, Campbell said, driven by the financing options and broker program introduced in January.

.CLUB announced first-quarter premium sales totaling $505,000 and $2.5 million in Q2.

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Comments (7)

  1. gpmgroup says:

    If any new gTLD deserves to be a success for sheer effort then it has to be .club. The amount of effort Colin puts in is inspirational.

    (And no we don’t own or manage any .club domains)

  2. christopher brennan says:

    some of the new domain extensions will live on just by the law of averages, the problem is that there are so many.

    like seedlings in a mature forest, there is so little light to go around and success is not based on quality but rather by the luck of the fall.

  3. ThcNames says:

    Soooo we know .CLUB is successful, what about other extensions? How far off are they from being profitable?

  4. Ryan says:

    What about the many millions .club has taken in losses, probably over $10M at this point, investments such as 50 cent etc… getting to break even hardly seems like a feat after spending tens of millions, and in the face of more extensions coming, also having already sold many of their premium, not to mention giving away credit.club for reg fee, which was later sold for $5K, wheras they were asking $200K and then some.

  5. ThcNames says:

    “Premium sales have also been performing well in 2016,”

    Don’t you mean 2017?

  6. ada says:

    Breaking even..mhh…so basically they work for free.
    There are so many established businesses around and if you have millions put into them you are sure to be successful, you literally cannot fail.
    But those guys instead of choose what works they deiced to live on island called Maybe One Day.They just waste time, money, energy etc

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