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How much money will ICM make from .xxx blocks?

Kevin Murphy, September 13, 2011, 12:57:20 (UTC), Domain Registries

There’s a pretty ludicrous report in the Australian media today, claiming that Aussie businesses are being forced to pay AUD $400 million to ICM Registry to protect their brands in .xxx.

The laughable number ($411 million) appears to have been fabricated from whole cloth. The report in the Murdoch-owned Herald Sun does not even bother trying to source or justify it.

But it’s becoming increasingly clear that ICM is going to make some money out of its .xxx sunrise, including from Sunrise B – the one-time defensive “blocks” that do not result in a domain registration.

The company priced Sunrise B at $162 per domain based on an assumption that it would see 10,000 of them. Any fewer and it would lose money, any more and it would profit.

According to official registry reports, no TLD launched in the last five years – .asia, .co, .jobs, .mobi – saw more than about 10,000 domains defensively registered during its sunrise period.

But my hunch is that .xxx will blow those out of the water. I would not be at all surprised if the final number tops 20,000 names.

It’s just a hunch at this point, based on a comparison to the .co launch – which had a reported 11,000 sunrise applications last year – and four main assumptions:

First, that 10,000 was a conservative estimate. I don’t think ICM would have risked making a big loss.

Second, based on a very small number of conversations, I think that some companies are not taking any chances. They’re applying for blocks in more second-tier brands that maybe they strictly need to.

Third, ICM has a much larger registrar channel than .co enjoyed, and much more aggressively FUDdy registrar marketing tactics.

ICM has approved about 70 registrars, compared to the 10 that .CO Internet had at launch, and a lot of registrar promotion has focused on the “Protect Your Brand!” angle, which was discouraged by .co.

Fourth, the vast amount of mainstream media attention the .xxx sunrise has been receiving, most which has doggedly followed the same line as the registrar FUD.

While the value of defending against typosquatting during the .co sunrise last year was probably more important to trademark holders from a security and traffic loss perspective, the brand protection angle did not receive nearly the same amount of press as .xxx has.

ICM president Stuart Lawley has done dozens of media interviews since the sunrise kicked off last week. I even heard him on a UK radio news show aimed at teenagers.

And this press has been going on for over six years, remember. ICANN first approved .xxx in 2005, and the story has been in and out of the media ever since.

It’s worth noting that a Sunrise B block, with its one-time fee, basically denies ICM Registry a bunch of recurring revenue events forever.

Nike is going to be paying $20 to .CO Internet for its defensively registered nike.co domain name every year until the end of time, in addition to the up-front sunrise fee.

If it blocks nike.xxx, it will pay $162 to ICM now but it will also deny the registry its $60 fee for every year it could have been a renewing domain. In three years, ICM’s losing revenue.

But Sunrise B is very probably going to be profitable for ICM. At 20,000 applications, its top line would be $3.24 million, with profit probably pushing seven figures.

Nowhere near $411 million, obviously, but not a bad payday for selling domain names that will never resolve.

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Comments (1)

  1. Trey biggs says:

    Extortionists all of you
    Death to cybersquatters!

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