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Registry bosses to talk ICANN “tax cuts” at private meeting

Kevin Murphy, September 5, 2017, Domain Registries

The CEOs of 20 or more gTLD registries are due to meet privately this month to discuss, among other things, the possibility of a reduction in their ICANN fees.

The Registry CEO Summit is being held in Seattle at the end of September, I’m told.

Jay Westerdal of Top Level Spectrum (.feedback etc) and Ray King of Top Level Design (.design etc) are organizing the event.

“It’s a small, informal gathering, where the agenda will be set by the participants, most likely around best practices for running a new registry,” Westerdal said.

“It’s not an official group like the RySG, and we don’t expect to be putting out any statements or ‘work product’,” he said.

He said he expects 20 to 25 registry CEOs to attend.

.CLUB Domains CEO Colin Campbell, who said he will attend, said he intends to bring proposals to the meeting around persuading ICANN to support the industry with marketing support and fee reductions.

Campbell wants ICANN to commit to spend $4 million on marketing new gTLDs at trade shows and conferences.

He also wants ICANN to reduce its $0.25 per-domain registry fee, which he referred to as a “tax”, to $0.18 for three years (which would match the $0.18 registrars pay ICANN per transaction).

He said the money would ideally flow through into the pockets of registrants, rather than the industry.

“I’m not suggesting that it be permanent, I’m suggesting that in order to support the fledgling new gTLD industry that they offer a small reduction and hope registries will pass that on to registrars and hopefully registrars will pass that on to consumers,” Campbell said.

The reduction would also help raise awareness of new gTLDs, he said.

The $0.25 fee only kicks in when a registry tops 50,000 billable transactions per year, so the reduction would at first only affect the roughly 50 to 60 new gTLDs that are already over that milestone.

The $0.07 per-domain reduction is so small that even a registry as large as .club, with about a million domains, would only see its fees reduced by about $70,000 per year.

Over all the affected TLDs, it would come out to a cost to ICANN of about $1.2 million per year if current volumes hold.

“It’s a very small amount but I still believe the benefit goes to end users,” Campbell said.

For registrants, it’s difficult to imagine $0.07 making a huge difference, unless they’re a high-volume buyer (which are not always the buyers you want). Generally, the cheaper domains get the more they attract abusive registrants.

Whether the ideas will get any traction among other registry CEOs remains to be seen, but it’s not the first idea for reduced ICANN fees to come out of the registry community recently.

In March, the RySG formally asked ICANN to tap into its war chest of excess new gTLD application fees to waive 75% of its fixed $25,000 annual per-TLD fee, a move that would affect all new gTLDs rather than just the larger ones.

The rebate would have cost ICANN $17 million.

But ICANN knocked that idea back last week, saying it still does not know how much of this $96 million cash pile it will have to spend on unexpected events stemming from the program.

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Another auDA director quit in secret

Kevin Murphy, September 5, 2017, Domain Registries

Australian ccTLD registry auDA, in the midst of a transparency controversy, reportedly lost another of its directors last month.

According to a report in Australia’s Financial Review newspaper, Leonie Walsh stepped down August 14.

The paper cited Australian Securities and Investments Commission documents as its source.

Embattled auDA did not disclose her departure at the time, despite the fact that it did disclose that fellow director Michaella Richards had also quit the same week.

Richards had been accused by some auDA members, noting her previous professional relationship with CEO Cameron Boardman, of lacking experience in the domain industry.

No reason for Walsh’s departure has been given.

The two directors left just a couple of weeks after chairman Stuart Benjamin, who was facing a member vote of no-confidence he did not think he could win, quit.

auDA has come under criticism from members, such as those organized at Grumpy.com.au, for several policy shifts that seemed to make the organization more secretive and less responsive to members’ interests.

The organization has since done U-turns on most of controversial policies.

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

Kevin Murphy, September 4, 2017, 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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Deutsch and Doria to join ICANN board

Kevin Murphy, September 4, 2017, Domain Policy

Veteran ICANN community members Avri Doria and Sarah Deutsch are to join ICANN’s board of directors in November.

Both have been selected by ICANN’s Nominating Committee to serve three-year terms starting at the end of the public meeting in Abu Dhabi, which wraps up November 3.

They replace current chair Steve Crocker, who is leaving after his maximum three terms on the board, and Asha Hemrajani, who is leaving after one term. Both take seats reserved for North Americans.

Doria, an independent consultant, is a 12-year member of the community and tireless working group volunteer, most closely associated with the Non-Commercial Users Constituency. Her clients include Public Interest Registry.

Deutsch is an intellectual property attorney perhaps best known as a 23-year employee of Verizon. She currently works at Mayer Brown in Washington DC.

Both new directors have been knocking about ICANN for ages in various leadership positions.

This contrasts with previous years, in which NomCom has gone outside of the community for board expertise.

NomCom also selected new members of the ccNSO, GNSO and ALAC, listed here.

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Afnic appoints Pierre Bonis new CEO

Kevin Murphy, September 1, 2017, Domain Registries

French ccTLD registry Afnic has named Pierre Bonis its new CEO.

Bonis officially started his new job today, but he’s been in the role on an interim basis since May 1, when he replaced Mathieu Weill.

Weill had abruptly quit after 12 years at Afnic in order to join the Digital Economy Department of the French government’s Directorate-General for Enterprise.

Bonis was Weill’s deputy for five years, so being kicked up the ladder by the Afnic board of trustees was perhaps not unexpected.

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