ICANN has dramatically reduced the amount of revenue it expects to see from new gTLDs in its fiscal 2015.
According to a draft 2016 budget published this morning, the organization now reckons it will get just $300,000 from new gTLD registry transaction fees in the year ending June 30, 2015.
That’s down 75% from the $1.2 million predicted by its FY 2015 budget, which was approved in December.
Transaction fees are paid on new registrations, transfers and renewals, but only by gTLDs with over 50,000 billable transactions per year.
Today, only 14 of the 522 delegated new gTLDs have added more than 50,000 names. ICANN says that only 17 registries are currently paying transaction fees.
It’s not only the transaction fees where ICANN has scaled back its expectations, however.
The organization also expects its fixed new gTLD registry fees — the $6,250 each registry must pay per quarter regardless of volume — to come in way below targets.
The new budget anticipates $12.7 million from fixed registry fees in FY15, down 24% from the $16.7 million in its adopted FY15 budget.
This is presumably due to larger than expected numbers of would-be registries either withdrawing or dragging their feet in the path to delegation.
Registrar transaction fees are now anticipated at $1.1 million, compared to $2 million and $3.2 million predicted by the adopted and draft FY15 budgets respectively.
Taking all three revenue sources together, ICANN now expects new gTLDs to contribute just $14.1 million to its fiscal 2015 revenue, down 29% from the $19.8 million forecast in its adopted FY15 budget.
That’s down 57% from the $32.7 million in the original draft budget for the period.
The current budget assumes 15 million new gTLD registrations in the 12-month period, revised down from the 33 million domains predicted in its draft FY15 budget a year ago.
With just a few months left until the end of the fiscal year, there are currently fewer than 4.5 million domains in published new gTLD zone files.
ICANN plainly no longer expects new gTLDs to get anywhere close to 15 million domains.
Renewals expected to be weak, weak, weak
The organization is taking a conservative view about renewals for 2016.
The 2016 budget expects renewals at just 50% for regular gTLDs and 25% for registries — presumably ICANN has .xyz in mind — that gave away domains for free at launch.
That 50% is both ICANN’s “best” and “high” estimate. Its “low” estimate is 35% for non-free domains.
Obviously, 50% is a very low renewal number for any registry (70%+ is the norm). Even شبكة. (.shabaka) told us recently that 55% of its registrants are renewing before their domains expire.
Conversely, 25% may be a very optimistic number for free domains (when Afilias gave away free .info names a decade ago, almost all of them dropped rather than being renewed).
For fiscal 2016, which begins July 1, 2015, ICANN expects new gTLD revenue to be $24.1 million — about a quarter off its original plan for 2015.
That breaks down as $19.9 million from registry fixed fees, $2 million from registry transaction fees, and $2.3 million from registrar transaction fees.
ICANN said it is is assuming that it will start the year with 602 registries and end it with 945.
The proposed FY16 budget, now open for comment, can be found here.
The US government has put its feelers out for information about a possible successor to Verisign as manager of the .gov TLD.
A formal Request For Information — potentially a precursor to a Request For Proposals — was was issued by the General Services Administration on March 9.
The GSA, which is the sponsor of the .gov gTLD, seems to be looking for information about all aspects of running a registry back-end and the secure dotgov.gov registrar front-end.
Those functions have been carried out by Verisign since it took them over from the GSA itself in December 2010.
Its five-year contract expires in September this year.
Because it’s restricted to US government entities, .gov is not a large gTLD — the RFI says it has about 5,000 domains and grows at about 5% a year — but it does carry a certain prestige.
It also carries a not inconsiderable fee. According to the September 2010 award page, the deal is worth $3,325,000 to Verisign.
It’s quite possible that the RFI is just a case of the US government going through the necessary motions prescribed by its procurement policies; Verisign may well be a shoo-in.
But the company’s record with .gov isn’t as great as its record with .com and .net.
In August 2013, Verisign screwed up a DNSSEC key rollover in the .gov zone, causing resolution failures on the small number of networks that rigorously enforce DNSSEC.
The deadline for RFI responses is March 23.
Two technology start-up companies that use .io domain name are to campaign on behalf of the exiled natives of the islands represented by the ccTLD.
As you’re no doubt aware, in recent years .io became a popular TLD among young tech firms squeezed out of .com by the lack of decent available names.
It could be understood to mean “input/output”, but the ccTLD actually represents the British Indian Ocean Territory, an archipelago in the Indian Ocean with a storied past.
It’s managed by UK-based Internet Computer Bureau, which runs several obscure overseas ccTLDs.
Over the last year or so, there’s been increasing awareness among .io registrants of BIOT’s recent history, which isn’t great.
The biggest island in the territory is Diego Garcia. In the 1960s, about 1,800 people — known as Chagossians — lived there.
But they were all forced to leave by the UK government in the early 1970s as part of a move to lease essentially the entire island to the US military.
This was at the height of the Cold War, when the US believed the islands were strategically important.
According to the UK Chagos Support Association, the exile was carried out covertly and many of those kicked off the islands were forced to live in “utmost poverty” in nearby Mauritius.
Now, Diego Garcia is populated by about 3,000 military personnel, mostly Americans, who staff the air and naval bases that were established following the Chagossians’ exile.
But the US lease is due to expire next year, so those backing the Chagossian cause reckon they’ve got an unprecedented opportunity to get the UK government to let them return.
You can read about the campaign here.
How does this all relate to domain names?
Two .io-using start-ups — Seats.io and BigBoards.io — said late last week that they have pledged their support to the cause.
In a press release, Seats.io’s “Chief Everything Officer” Ben Verbeken said the company will soon launch a web site at thedarksideof.io, “where companies can pledge to match the cost of registering their .io domain name with a donation to a Chagossian group or charity.”
.io names currently cost about $100 for the first year and about $50 a year thereafter.
Verbeken said: “When we learned about the Chagossian people’s story, we had two choices. We could give up our domain name and change the name of our business. But we would just be running away from the problem. So we decided to accept our social responsibility and actually help the Chagossian people a bit.”
The domain thedarksideof.io currently leads to a placeholder.
You can read more of the political back-story at The Guardian
Donuts has launched its first ad campaign, part of its plan to raise awareness about new gTLDs as a category.
It’s a digital-only video campaign, expected to run on sites including YouTube, the New York Times, Forbes, Mashable and Fast Company.
The theme is “freedom of choice”, using the slogan “Welcome to the not com revolution”.
“It’s going to be a lot of digital, a lot of online marketing, and it’s going to be about choice and the fact that this new product category represents an opportunity to grab an identity on the internet, that really reflects what it is you are and what you do,” COO Richard Tindal told DI in a recent interview.
The ad campaign going to be US-only, which chimes with what Tindal said as he laid out some of Donuts’ vision and marketing plans for 2015.
“I think that level of awareness is very low at sort of five to ten percent,” he said in the January interview. “It varies from country to country. Probably in the US it is even a little lower than other places.”
Tindal told us that Donuts is primarily concerned with marketing the “category” of new gTLDs, rather than any specific TLD.
“Our mission in 2015 is to have those people be aware of the category before they turn up at the registrar,” he said. “They are still going to get the story from the registrar, but we want them to know all about this new thing before they turn up.”
Donuts says that the new ad campaign will drive traffic to Your.domains.
That domain actually redirects to Domainr — a sparse, but quite smart, name-spinner app developed by the little-known nb.io.
That site, which appears to be monetized with affiliate links, quickly presents relevant domains based on user keywords and sends leads to a selection of registrars.
Such “smart search” is an important part of Donuts’ strategy, but one where the new gTLD industry as a whole is failing to make much of an impact at the moment.
Here in the UK, it’s pretty obvious from Go Daddy’s advertising that the market-leading registrar would sooner take the Verisign shilling and plug .com rather than risk promoting the largest expansion of inventory in its history.
Tindal said in our interview that Donuts’ aim in 2015 is to promote smart search over paid placement.
Asked whether registrars’ economic interests are aligned with new gTLD registries’, he said he’s convinced that for all the domains sold in 2014, new gTLDs have better metrics for registrars than .com. The only problem is volume.
If you look at the metrics of those .com names, under every criteria the registrar is better off selling one of ours.
The customer finds a name more quickly. It’s got more margin for the registrar, because they’re better quality names. They’re going to buy more. The problem, as you’ve just noted is of course just the volume. At the moment, there’s so much volume for them in .com that they tend to stick to that, and so we’re seeing the sort of behaviors, if you like, that are sort of clouding what we would like to see.
Awareness-raising is important, therefore, to get customers actively looking for more relevant domains, rather than being served up .com by default at registrars unwilling to take a risk on new TLDs.
Donuts’ announcement can be found here.
The full interview with Tindal, which also covers topics such as SEO and dot-brands, can be read by DI PRO subscribers here.
If you register a .sucks domain matching a brand, could you survive a subsequent UDRP complaint? Opinion is mixed.
In my view, how UDRP treats .sucks registrants will be a crucial test of Vox Populi Registry’s business model.
Vox Populi Registry clearly envisages — and is actively encouraging with its policies — genuine critics, commentators and consumer advocates to register .sucks domains that match famous trademarks.
I really like this idea. Power to the people and all that.
But will UDRP panelists agree with me and Vox Pop? Cybersquatting case law under UDRP says, very firmly: “It depends.”
Statistics generally favor mark owners
To date, there have been exactly 100 resolved UDRP complaints against domains that end in “sucks.com”.
Of those, 47 cases ended up with a full transfer of the domain to the trademark owner. Only 30 resulted in a the complaint being denied.
Another 19 cases were withdrawn or terminated; the remainder were split decisions.
So it seems, based on historical “sucks” cases, that the odds favor trademark owners.
But each case is, theoretically at least, judged on its merits. So it does not necessarily hold that most .sucks UDRP complaints will be successful.
What does WIPO say?
The World Intellectual Property Association, which administers most UDRP cases, published a set of guidelines for its panelists.
Some guidelines specifically addresses “sucks” sites, but the advice is not always clear-cut.
There are three elements to UDRP. First, the complainant must show that the domain name in question is identical or confusingly similar to its trademark.
According to WIPO, it’s the “consensus view” of UDRP panelists that adding “sucks” to a trademark at the second level does NOT stop a domain being confusiningly similar. WIPO says:
Generally, a domain name consisting of a trademark and a negative or pejorative term (such as [trademark]sucks.com) would be considered confusingly similar to the complainant’s trademark for the purpose of satisfying the standing requirement under the first element of the UDRP (with the merits of such cases typically falling to be decided under subsequent elements). Panels have recognized that inclusion of a subsidiary word to the dominant feature of a mark at issue typically does not serve to obviate confusion for purposes of the UDRP’s first element threshold requirement, and/or that there may be a particular risk of confusion among Internet users whose first language is not the language of the domain name
Some panels have disagreed with this prevailing view, however.
It remains to be seen whether moving the string “sucks” to the right of the dot would affect the outcome, but it’s established UDRP case law that the dot in a domain can be pretty much ignored when testing for similarity.
The TLD a domain uses can be taken into account if it’s relevant or disregarded if it is not, according to precedent.
The second test under UDRP is whether the registrant of the domain has legitimate rights or interests.
Panelists disagree on this point. WIPO says:
The right to criticize does not necessarily extend to registering and using a domain name that is identical or confusingly similar to the complainant’s trademark. That is especially the case if the respondent is using the trademark alone as the domain name (i.e., [trademark.tld]) as that may be understood by Internet users as impersonating the trademark owner.
That view would seem to apply specifically to the use cases Vox Pop has in mind — the registry wants critics to own [trademark].sucks domains in order to criticize the trademark owner.
Respondents’ can very well achieve their objective of criticism by adopting a domain name that is not identical or substantially similar to Complainants’ marks. Given the free nature of the media which is the Internet and the chaotic spamming that has become epidemic, it does not appear that one can be at full liberty to use someone else’s trade name or trademark by simply claiming the right to exercise a right to freedom of expression”.
In other words: you may have a right to free speech on the internet, but you do not have the right to exercise it simply by adding “sucks” to a famous trademark.
But other UDRP panelists have disagreed. WIPO says that some panelists have found:
Irrespective of whether the domain name as such connotes criticism, the respondent has a legitimate interest in using the trademark as part of the domain name of a criticism site if such use is fair and noncommercial.
The third element of UDRP is bad faith. Complainants have to show that the registrant is up to something dodgy.
Some panelists have a pretty low threshold for what constitutes bad faith. Merely having the page parked — even if you did not park it yourself — can point to bad faith, especially in “sucks” cases.
WIPO says that “tarnishment” of a trademark — such as posting porn, which is banned under Vox Pop’s AUP anyway — can be bad faith, but legitimate criticism would not usually:
While it would not normally extend to the mere posting of information about a complainant, or to the posting of genuine, non-commercial criticism regarding the trademark holder, it may extend to commercially motivated criticism by (or likely on behalf of) a competitor of such trademark holder.
So, with all that in mind, here are some tips for improving your odds of surviving a .sucks UDRP.
How to beat a .sucks UDRP
Poring over dozens of “sucks.com” decisions, it quickly becomes clear that there are certain things you should definitely do and not do if you want to keep a hold of your brand-match .sucks domain.
Given the volume of precedent, you’ll have a hard time showing that your domain is not identical or confusingly similar to the trademark in question — strike one — but there are ways to show legitimate interests and rebut claims of bad faith.
To show you lack legitimate interests, the complainant only needs to make a face-value argument that you do not. Then the burden of proof to show rights switches to you.
If you don’t respond to the UDRP, the panel will find you lack rights. Panelists rarely try to fight the corner of a registrant who has not responded.
That’s strike two.
2. Don’t allow your domain to be parked
If a domain is parked, UDRP panelists in “sucks.com” cases invariably find that the registrant lacks legitimate interests and has shown bad faith.
Parking is considered a commercial activity, so you won’t be able to argue convincingly that you’re exercising your right to non-commercial free speech if your domain is splashed with links to the trademark owner’s competitors.
This holds true even if the domain was automatically parked by your registrar.
Dozens (hundreds?) of UDRP cases have been lost because Go Daddy parked the newly registered domain automatically, enabling the complainant to show commercial use.
Panelists are usually happy to overlook the lack of direct bad faith action by the registrant in such cases.
Parking will usually lead to strikes two and three.
In the case of .sucks, parking is actually banned by Vox Populi’s acceptable use policies (pdf).
But the registry will only enforce this policy if it receives a complaint. I don’t know if the Registry-Registrar Agreement, which isn’t public, prohibits registrars auto-parking new domains.
3. Develop a site as soon as possible
In some “sucks.com” cases, respondents have argued that they had intended to put up a criticism site, but could not provide evidence to back up the claims.
If you register a .sucks matching a trademark, you’ll want to put up some kind of site ASAP.
In the case of kohlersucks.com, the registrant had merely framed a Better Business Bureau web page, which was found to show non-commercial criticism use.
4. Don’t offer to sell the domain
It should go without saying that offering to sell the domain to the trademark owner shows bad faith; it looks like extortion.
Panelists regularly also find that registrants give up their legitimate rights to a domain as soon as they make it available to buy.
5. Don’t make any money whatsoever
The second you start making money from a domain that matches a trademark, you’re venturing into the territory of commercial use and are much more likely to fail the WIPO test of “genuine, non-commercial criticism”.
6. Be American
Depressingly, you stand a better chance of fighting off a UDRP on free speech grounds if both the case involves US-based parties and a US-based panelist.
Panelists are more likely to draw on the US Constitution’s First Amendment and associated non-UDRP case law when determining rights or legitimate interests, when the registrant is American.
Merely registering with a US-based registrar is not enough to confer First Amendment rights to a registrant living outside of the US, according to UDRP panels.
Even though freedom of speech is a right in most of the world, in the universe of UDRP it seems the rest of us are second-class citizens compared to the yanks.