If there’s one thing we’ve learned from the last six months of new gTLDs, it’s that predictions about massive levels of defensive registrations were way off the mark.
New gTLDs are not seeing anywhere near the same numbers of sales during sunrise periods as their predecessors.
I have managed to collate some data that I think gives a pretty accurate picture of how many sunrise registrations are being made and therefore how much new gTLDs are costing trademark owners.
About 128 gTLDs have finished their sunrise periods to date, and I have the sunrise sales figures for 101 of them. All of these numbers were provided by the respective registry operator.
The biggest sunrise, per these numbers, was for .clothing, which had 675 registrations. That’s 5.97% of the 11,301 overall names in the .clothing zone file today, over three months after launch.
At the other end of the scale is شبكة. (“.shabaka” or “.web” in Arabic), which sold just five names during its sunrise, the first of the program, which was restricted to Arabic trademarks.
The total number of sunrise sales across across all 101 gTLDs is 14,567, making for an average of 144.2 domains per new gTLD sunrise.
Sunrise currently accounts for 1.87% of all names in these 101 gTLDs, but that’s an artificially high number because some of the gTLDs I have sunrise numbers for are not yet in general availability.
But compare the real numbers to .co, which sold over 11,000 names at sunrise when it launched in summer 2010, or .xxx, which took 80,000 sunrise applications in late 2011.
Trademark owners are not defensively registering with anywhere near the same fervor as they once did.
If that 144.2 average names holds true for all 128 gTLDs that have completed sunrise, we can approximate that 18,461 names have been sold during sunrise periods to date.
I should point out that I’m assuming in these calculations that all sunrise registrations are “defensive” and that brand owners are not defensively registering during general availability.
Neither of those assumptions will be fully true.
Not all sunrise sales are made to genuine brand owners, of course. Some number of generic dictionary domains have been registered by people who obtained trademarks just in order to get the matching domain.
And only a psychic could know whether a GA registration is “defensive” or not at this stage.
But let’s assume that every sunrise reg went to a genuine brand owner. How much have they had to pay for these names?
It’s difficult to calculate a precise dollar value because each registry has a different pricing scheme and sometimes the price of a name can vary even within a specific given TLD.
I looked to the prices listed at 101domain, which has pretty exhaustive coverage of new gTLDs, for a guide.
The average first-year cost for a sunrise registration in the 75 or so new gTLDs currently being sold to trademark owners at 101domain is a little shy of $165.
Assuming that’s a good guide for pricing in sunrise periods that have already closed, we can calculate that 18,461 names at $165 a pop equals $3,046,089 out of the pockets of trademark owners in the first year.
But the sunrise fees are not the only costs, of course. In order to participate in a sunrise you must first register your mark in the Trademark Clearinghouse.
There are 30,251 marks registered in the TMCH, according to the TMCH itself. At $150 a pop — the minimum you can pay for a TMCH registration — that’s $4,537,650 spent on defensive measures.
Add in the cost of the sunrise registrations and a generous $100,000 to cover the cost of the 50 Uniform Rapid Suspension cases that have been filed to date and the total cost to brand owners so far over the first 128 new gTLDs comes to $7,683,739.
Whether this is “a lot” or not probably depends on your perspective.
It’s certainly not the billions of dollars that were being predicted by some as recently as last year.
In September the Better Business Bureau and the Coalition Against Domain Name Abuse speculated that 600 “open” new gTLDs could lead to $10 billion being spent on defensive registrations.
That statement was made in a press release calling for stronger cybersquatting legislation in the US.
But if 101 open gTLDs leads to $3,046,089 being spent, 600 such gTLDs should lead to a total cost of about $18 million, not including the fixed TMCH costs (which probably won’t grow very fast in future).
That’s not the same ballpark, not the same league, not even the same sport.
Two luxury goods companies have the honor of being the first to register domain names in a new gTLD.
Today, the first four domain names registered to actual registrants popped up in the zone file for dotShabaka Registry’s Arabic “.web” — شبكة.
شبكة. exited its mandatory Sunrise period on Sunday; the four new names appear to be the first ones to get name servers after their Sunrise applications were approved.
The two registrants, according to Whois records, are Richemont International and Rolex.
Richemont is itself a new gTLD applicant. The company has taken a strong interest in the program, with head of digital IP Richard Graham even moderating a new gTLDs conference in March.
The four names (with my best guesses at a translation) are:
- لانسيل.شبكة — seems to mean “Lancel”, Richemont’s brand of expensive leather bags.
- مونتبلان.شبكة — “Montblanc”, Richemont’s brand for selling watches, pens, cufflinks and such.
- بياجيه.شبكة — “Piaget”, another Richemont brand of watches and jewelry.
- رولكس.شبكة — seems to be the translation or transliteration of “Rolex”.
None appear to be resolving on the web yet, not even to placeholder pages, at least from where I’m sitting.
Because they’re Sunrise names, it’s possible that all four are defensive registrations that may never lead anywhere meaningful.
Richemont used Com Laude as its registrar while Rolex used Key-Systems.
The Sunrise was limited to Arabic-script trademarks.
dotShabaka said yesterday that it had “very few” Sunrise applications. Now we know that number was at least four.
The US Federal Trade Commission is still “looking at” ICANN’s new gTLD program amid concerns that most of the applicants applied defensively, it has emerged.
FTC chairman Jon Leibowitz also said today that he thinks new gTLDs will cause consumer confusion and lead to an increase in fraud.
“We have been very, very concerned about ICANN and their dramatic expansion of the domain names, which we think will cause consumer confusion and even worse lead to more areas where malefactors can hide from the law while defrauding consumers,” Leibowitz said.
“A lot of companies that have plunked down $185,000 per domain name — and there have been hundreds of companies that have done it — have mostly done it for defensive purposes,” he added.
Most new gTLDs are not dot-brands, so Leibowitz probably misspoke when he said that “most” applications are defensive. Within the subset of bids that are dot-brands, he may be on firmer ground.
His comments came during a press conference to discuss the FTC’s settlement of its competition probe of Google, which has itself applied for almost 100 new gTLDs.
The settlement agreement relates to Google’s search practices and not its gTLD applications.
Leibowitz said that the FTC is “not looking that issue [new gTLDs] with respect to Google, we’re looking at that issue with respect to ICANN”.
The FTC’s concerns about the program are not new, but it has not publicly expressed them recently.
In December 2011 the agency said the program could “magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters.”
Why is ICANN so misunderstood?
That’s the question at the heart of a public comment period into concerns about “defensive” new generic top-level domain applications that the organization opened up last night.
ICANN wants to know why so many companies seem to think they’ll need to apply for a dot-brand gTLD even though they don’t want one.
there are reports that parties believe that they will need to submit defensive gTLD applications to protect their trademarks, regardless of whether they are interested in using or developing a gTLD.
ICANN seeks public comment on the sources of this perception and how it can be addressed.
The comment period serves three purposes — it’s designed to raise awareness about rights protection mechanisms as well as soliciting input about defensive applications.
It will also let ICANN show the US Congress, which is worried about this kind of thing, that it’s doing something to address the problem.
So why are so many people worried about the perceived need to defensively apply for dot-brands?
The main answer, I think, is pretty straightforward:
The Applicant Guidebook is 349 pages long.
Hardly anybody has read the damn thing, not even some of the “experts” that persist on appearing in the media to complain about numeric gTLDs or to confidently predict GE and LG will apply for dot-brands.
So what do people do? They get somebody else who has read it to explain what it means.
These somebody elses are either consultants and registry providers, which are financially incentivized to get companies to apply, or they’re organizations that want the whole program stopped, which are not above deliberately misrepresenting the rules in order to whip up outrage.
I’m not casting every consultant in the same light here, of course. Many will turn away business if it’s not a good fit, but let’s not pretend that there hasn’t been scaremongering.
And let’s remember that for most regular companies registering a domain name is not an opportunity, it’s a headache. It’s at best a minor irritation and at worst a costly shakedown.
That thinking has clearly translated into the new gTLD space.
Poorly informed people think they’re being asked to register a very expensive domain name, and in their experience registering a domain name is a defensive measure 99% of the time.
Because ICANN has spent the last six months painstakingly avoiding saying anything positive about new gTLDs, it’s been left to the consultants and registries to try to explain the opportunities.
They’re understandably looked on with suspicion, and not only because of the aforementioned distrust of the industry – this new gTLD thing is unproven and there’s a perception that previous gTLDs have “failed” because you don’t see a .biz every time you turn on the TV.
Anyway, speaking of shakedowns, DomainIncite PRO subscribers have access to an in-depth analysis of scenarios in which “defensive” applications may and may not be appropriate. Read it here.
The Association of National Advertisers is threatening legal action unless ICANN “abandons” its recently approved new generic top-level domains program.
Its CEO, Robert Liodice, has written to his ICANN counterpart Rod Beckstrom outlining its litany of concerns about new gTLDs.
ANA’s strongly worded arguments will be familiar territory for anyone who has been following development of the program for the last few years.
It’s worried about cybersquatting, typosquatting, phishing, as well as the cost of defensive registrations and post-launch trademark enforcement.
The organization represents 400 companies that collectively spend $250 billion every year on their brands, according to the letter.
It also claims that ICANN shirked its duties by failing to adequately consider the economic impact of the program, and that it failed to develop it in a transparent, bottom-up manner.
Liodice wrote (pdf), with my emphasis:
ICANN must not ignore the legitimate concerns of brand owners and the debilitating effect on consumer protection and healthy markets its unsupervised actions will cause. Should ICANN refuse to reconsider and adopt a program that takes into account the ANA’s concerns expressed in this letter, ICANN and the Program present the ANA and its members no choice but to do whatever is necessary to prevent implementation of the Program and raise the issues in appropriate forums that can consider the wisdom, propriety and legality of the program.
The letter ends with a bunch of legal blah about ANA’s rights and remedies, a pretty obvious indication that it’s considering its legal position.
ICANN should “abandon” the program until ANA’s concerns have been addressed, Liodice wrote.
That’s not going to happen, of course.
There’s no way ICANN can put a halt to the program without basically admitting ANA’s analysis of it has merit.
If ANA wants to stop new gTLDs from going ahead, it’s going to need to do more than send a letter.
The letter is CC’d to the US Department of Commerce and several Congressmen, which suggests that we may see another Congressional hearing into the program before too long.
But will we see a lawsuit as well?
ICANN, at least, has anticipated the likelihood of having to defend itself in court for some time.
About 30% of the the $185,000 application fee – $30 million in a 500-application round – is allocated to various “risks”, of which a legal defense fund is one component.
I’d be surprised if ICANN’s legal team hasn’t war-gamed potential claims and defenses every time the Applicant Guidebook has been updated.
The next five months are going to be very interesting times.