Brand-blocking service plotted for porn gTLDs

MMX wants to offer a new service for trademark owners worried about cybersquatting in its four porn-themed gTLDs.
The proposed Adult Block Services would be similar to Donuts’ groundbreaking Domain Protected Marks List and the recent Trademark Sentry offering from .CLUB Domains.
The service would enable big brands to block their marks from registration across all four TLDs for less than the price of individual defensive registrations.
Prices have not been disclosed, but a more-expensive “Plus” version would also allow the blocking of variants such as typos. The registry told ICANN:

The Adult Block Services will be offered as a chance for trademark owners to quickly and easily make labels unavailable for registration in our TLDs. For those trademark owners registering domain names as a defensive measure only, the Adult Block Services offer an easy, definitive, and cost-effective method for achieving their goals by offering at-a-stroke protection for TLDs included in the program. The Adult Block Services are similar to the Donuts’ DPML, Uniregistry’s EP and EP Plus and the .Club UNBS and should be immediately understood and accepted by the trademark community.
The Adult Block will allow trademark owners to block unregistered labels in our TLDs that directly match their trademarks. The Adult Block Plus will allow trademark owners to block unregistered, confusingly similar variations of their trademarks in our TLDs.

It seems more akin to DPML, and Uniregistry’s recently launched clone, than to .CLUB’s forthcoming single-TLD offering.
The Registry Service Evaluation Process request was filed by ICM Registry, which was acquired by MMX last year.
It only covers the four porn gTLDs that ICM originally ran, and not any of the other 22 gTLDs managed by MMX (aka Minds + Machines).
This will certainly make the service appear less attractive to the IP community than something like DPML, which covers Donuts stable of 242 TLDs.
While there’s no public data about how successful blocking services have been, anecdotally I’m told they’re quite popular.
What we do have data on is how popular the ICM gTLDs have been in sunrise periods, where trademark owners showed up in higher-than-usual numbers to defensively register their marks.
.porn, .adult and .sex garnered about 2,000 sunrise regs each, more than 20 times the average for a new gTLD, making them three of the top four most-subscribed sunrise periods.
Almost one in five of the currently registered domains in each of these TLDs is likely to be a sunrise defensive.
Now that sunrise is long gone, there may be an appetite in the trademark community for less-expensive blocks.
But there have been calls for the industry to unify and offer blocking services to cover all gTLDs.
The brand-protection registrar Com Laude recently wrote:

What brands really need is for registry operators to come together and offer a universal, truly global block that applies across all the open registries and at a reasonable price that a trademark owner with multiple brands can afford.

Quite how that would happen across over 1,200 gTLDs is a bit of a mystery, unless ICANN forced such a service upon them.

.music update: I’m calling it for Costa

Amazon has pulled out of the fight for the .music gTLD, and I’m ready to call the race.
In full knowledge that this could be my “Dewey Defeats Truman” moment, it seems to me the balance of evidence right now is strongly pointing to a win for DotMusic over sole remaining rival bidder MMX.
The contention set originally had eight applicants, but six — Google, Donuts, Radix, Far Further, Domain Venture Partners and last night Amazon — have withdrawn over the last week or so.
This is a sure sign that the battle is over, and that the rights to .music have been auctioned off.
The two remaining applicants yet to withdraw are DotMusic Ltd, the Cyprus-based company founded and managed by music enthusiast and entrepreneur Constantinos Roussos, and Entertainment Names Inc, a joint venture managed by MMX (aka Minds + Machines).
One of them will withdraw its application soon, and my money’s on MMX.
Neither company will talk to me about the result.
But, as I observed Monday, DotMusic has recently substantially revamped its web site, and appears to be accepting “pre-registrations” for .music domains. These are not the actions of a loser.
MMX, on the other hand, has never shared Roussos’ public enthusiasm for .music and has never been particularly enthusiastic about winning private gTLD auctions, usually preferring instead to enjoy the proceeds of losing.
There are only two wildcard factors at play here that may soon make me look foolish.
First, the joint venture partner for Entertainment Names is an unknown quantity. Its two directors, listed in its .music application, are a pair of Hollywood entertainment lawyers with no previous strong connection to the ICANN ecosystem. I’ve no idea what their agenda is.
Second, MMX did not mention .music once in the “Post Period Highlights” of its recently filed 2018 financial results statement. It did mention the resolution of the .gay and .cpa contention sets, but not .music.
That filing came out April 3, at least a few days after the contention set had been won, but I’m assuming that the tight timing and/or non-disclosure agreements are probably to blame for the lack of a mention for .music.
So, on balance, I’m calling it for Roussos.
With a bit of luck we’ll have confirmation and maybe a bit of detail about potential launch dates before the week is out.

Did Roussos pull off the impossible? Google, Donuts, Radix all drop out of .music race

Google won’t be the registry for the .music gTLD.
The company, along with pure-play registries Donuts and Radix, late last week withdrew their respective applications from the .music contention set, leaving just three possible winners in the running.
Those are Amazon, MMX, and DotMusic, the company run by long-time .music fanboy Constantinos Roussos.
As I blogged last week, applications from Domain Venture Partners and Far Further have also been withdrawn.
I suspect, but do not know for a fact, that the contention was settled with a private deal, likely an auction, recently.
The logical guess for a winner would be Amazon, if only because of the nexus of its business to the music industry and the amount of money it could throw at an auction.
But I’m beginning to suspect that DotMusic might have prevailed.
The company appears to have recently revamped its web site, almost as if it’s gearing up for a launch.
Comparing the current version of music.us to versions in Google’s cache, it appears that the site has been recently given a new look, new copy and even a new logo.
It’s even added a prominent header link inviting prospective resellers to sign up, using a form that also appears to have been added in the last few weeks.
These changes all seem to have been made after the crucial ICANN vote that threw out the last of DotMusic’s appeals, March 14.
Are those the actions of an applicant resigned to defeat, or has Roussos pulled off the apparently impossible, defeating two of the internet’s biggest companies to one of the industry’s most coveted and controversial strings?
Participants in gTLD auctions typically sign NDAs, so we’re going to have to wait a bit longer (probably no more than a few days) to find out which of the remaining three applicants actually won.

.london disaster leads to mixed 2018 for MMX

New gTLD registry MMX, aka Minds + Machines, suffered a huge net loss in 2018, largely due to its disastrous .london contract, even while its operating fundamentals improved.
For the year, MMX reported a net loss of $12.6 million, compared to a 2017 profits of $3.8 million, on revenue up 5% to $15.1 million.
The loss was almost entirely attributable to charges related to an “onerous contract” with one of its partners.
MMX has never disclosed the identity of this partner, but the only outfit that fits the profile is London & Partners, the agency with which MMX partnered to launch .london several years ago.
The registry, expecting big things from the geo-TLD, promised to pay L&P millions over the term of the contract, which expires in 2021.
But it’s been a bit of a damp squib compared to former management’s expectations, peaking at about 86,000 regs last year and shrinking ever since.
MMX says the estimated gap between the minimum revenue guarantee payable to L&P and the expected revenue is expected to bring in before 2021, is $7.2 million.
It’s recorded this as a charge on its income statement accordingly, along with another $4.2 million impairment charge related to the same contract.
The company recorded a $7.7 million accounting charge related to this contract in 2016, too.
The company says that to date it has lost about $13.7 million on the deal.
These charges, along with a few other smaller one-off expenses, were enough to push the company into the black for 2018.
But other key performance indicators showed more promise, helped along by the acquisition last year of porn-themed registry operator ICM Register, best-known for .xxx.
Notably, renewal revenue almost doubled, up 97% to $9.4 million.
Domains under management was up 37% to 1.81 million.
Operating EBITDA was $3.6 million, up 12.5%.
Looking ahead, MMX said billings for the first quarter are expected to be up 246%, due to the first impact of the ICM acquisition.
It also said it closed $500,000 of sales in .law in China in March. That would work out to over 5,000 domains, based on the retail price of about $100 a year, but those domains have yet to show up in the .law zone file, which only grew by about 200 domains last month.
MMX said it is planning to launch “a high-value defensive registration product” for corporate registrars by the third quarter.
If I had to guess, I’d say that is probably a clone of Donuts’ Domain Protected Marks List service, which offers trademark owners deep discounts when they defensively block strings across the whole Donuts gTLD portfolio.
It’s a model copied by other registries, including recently Uniregistry.

Donuts founder replaces Pitts as MMX’s premium guru

MMX has hired one of Donuts’ recently departed co-founders to market its premium domain name inventory, the company said today.
Dan Schindler, formerly Donuts’ executive VP, has been hired as a “special advisor”, tasked with “monetizing” premiums in the US and Europe.
He appears to be functionally replacing Victor Pitts, who was hired as director of premium sales two years ago. Pitts appears to have left the company in January.
MMX, which counts .vip, .law and .luxe among its stable of 32 gTLDs, expects to report premium sales for 2018 of around $2.3 million.
The company has also hired domain consultant Christa Taylor, founder and CEO of dottba, as its new chief marketing officer, a newly created position.
News of the appointments was released as MMX published another preliminary trading update ahead of its final 2018 financial results next month.
Here are some more nuggets from the announcement:

• Total domain registrations so far in 2019 up 38% to 1.84 million compared to a year ago.
• Billings up 129% year-on-year due to contributions from ICM Registry and a 40% increase in sales of .vip and .luxe domains in China.
• ICM’s porn-themed domains are renewing at 91%.
• Integration of .luxe into two more blockchain platforms — NameCoin and XAYA — is underway.

MMX expects to announce its full-year results April 3.

Yanks beat Aussies to accountancy gTLD

The contention set for .cpa has been resolved, clearing the way for a new accountancy-themed gTLD.
The winner is the American Institute of Certified Public Accountants, which submitted two bids for the string — one “community”, one vanilla, both overtly defensive in nature — back in 2012.
Its main rival, CPA Australia, which also applied on a community basis, withdrew its application two weeks ago.
Commercial registries Google, MMX and Donuts all have withdrawn their applications since late December, leaving only the two AICPA applications remaining.
This week, AICPA withdrew its community application, leaving its regular “single registrant” bid the winner.
AICPA is the US professional standards body for accountants, CPA Australia is the equivalent organization in Australia. ACIPA has 418,000 members, CPA Australia has 150,000.
Both groups failed their Community Priority Evaluations back in 2015 on the basis that their communities were tightly restricted to their own membership, and therefore too restrictive.
AICPA later amended its community application to permit CPAs belonging to non-US trade groups to register.
Both organizations were caught up in the CPE review that also entangled and delayed the likes of .music and .gay. They’ve also both appealed to ICANN with multiple Requests for Reconsideration and Cooperative Engagement Process engagements.
CPA Australia evidently threw in the towel after a December 14 resolution of ICANN’s Board Accountability Mechanisms Committee decision to throw out its latest RfR. It quit its CEP January 9.
It’s likely a private resolution of the set, perhaps an auction, occurred in December.
The winning application from AICPA states fairly unambiguously that the body has little appetite for actually running .cpa as a gTLD:

The main reasons for which AICPA submits this application for the .cpa gTLD is that it wants to prevent third parties from securing the TLD that is identical to AICPA’s highly distinctive and reputable trademark

So don’t get too excited if you’re an accountant champing at the bit for a .cpa domain. It’s going to be an unbelievably restrictive TLD, according to the application, with AICPA likely owning all the domains for years after delegation.

The internet is about to get a lot gayer

Seven years after four companies applied for the .gay top-level domain, we finally have a winner.
Three applicants, including the community-driven bid that has been fighting ICANN for exclusive recognition for years, this week withdrew their applications, leaving Top Level Design the prevailing bidder.
Top Level Design is the Portland, Oregon registry that already runs .ink, .design and .wiki.
The withdrawing applicants are fellow portfolio registries Donuts and MMX, and community applicant dotgay LLC, which had been the main holdout preventing the contention set being resolved.
I do not yet know how the settlement was reached, but it smells very much like a private auction.
As a contention set only goes to auction with consent of all the applicants, it seems rather like it came about after dotgay finally threw in the towel.
dotgay was the only applicant to apply as a formal “community”, a special class of applicant under ICANN rules that gives a no-auction path to delegation if a rigorous set of tests can be surmounted.
Under dotgay’s plan, registrants would have to have been verified gay or gay-friendly before they could register a .gay domain, which never sat right with me.
The other applicants, Top Level Design included, all proposed open, unrestricted TLDs.
dotgay, which had huge amounts of support from gay rights groups, failed its Community Priority Evaluation in late 2014. The panel of Economist Intelligence Unit experts awarded it 10 out the 16 available points, short of the 14-point prevailing threshold.
Basically, the EIU said dotgay’s applicant wasn’t gay enough, largely because its definition of “gay” was considered overly broad, comprising the entire LGBTQIA+ community, including non-gay people.
After dotgay appealed, ICANN a few months later overturned the CPE ruling on a technicality.
A rerun of the CPE in October 2015 led to dotgay’s bid being awarded exactly the same failing score as a year earlier, leading to more dotgay appeals.
The .gay set was also held up by an ICANN investigation into the fairness of the CPE process as carried out by the EIU, which unsurprisingly found that everything was just hunky-dory.
The company in 2016 tried crowdfunding to raise $360,000 to fund its appeal, but after a few weeks had raised little more than a hundred bucks.
Since October 2017, dotgay has been in ICANN’s Cooperative Engagement Process, a form of negotiation designed to avert a formal, expensive, Independent Review Process appeal, and the contention set had been on hold.
The company evidently decided it made more sense to cut its losses by submitting to an auction it had little chance of winning, rather than spend six or seven figures on a lengthy IRP in which it had no guarantee of prevailing.
Top Level Design, in its application, says it wants to create “the most safe, secure, and prideful .gay TLD possible” and that it is largely targeting “gay and queer people as well as those individuals that are involved in supporting gay cultures, such as advocacy, outreach, and civil rights.”
But, let’s face it, there’s going to be a hell of a lot of porn in there too.
There’s no mention in the winning bid of any specific policies to counter the abuse, such as cyberbullying or overt homophobia, that .gay is very likely to attract.
Top Level Design is likely to take .gay to launch in the back end of the year.
The settlement of the contention set is also good news for two publicly traded London companies.
MMX presumably stands to get a one-off revenue boost (I’m guessing in seven figures) from losing another auction, while CentralNic, Top Level Design’s chosen back-end registry provider, will see the benefits on an ongoing basis.

DNS inventor says .luxe first innovation in a decade

DNS inventor Paul Mockapetris has endorsed MMX’s foray into the blockchain as “the first genuine piece of DNS related innovation that I have seen in the last decade”.
The quote came in an MMX press release this morning, which provided an update on the launch of .luxe as the first gTLD that publishes information to the Ethereum blockchain as well as the DNS.
As I attempted to describe a few months ago, .luxe is being sold as an alternative way to address blockchain assets such as cryptocurrency wallets, which currently use nonsense, immemorable 40-character hashes.
MMX has built an API that allows registrars to automatically associate .luxe domains with Ethereum addresses.
The registry said today it now has 11 registrars signed up to use this API, along with 60 more selling vanilla .luxe domains.
In addition to its launch distribution partner, the wallet provider imToken, MMX said it has also signed up Bitxbank, BeeNews, BEPAL, Hillstone Partners, Math Wallet, MTC Mesh Network, Qufen, Fbee, and ChainDD, which all appear to be Asian blockchain software companies.
It expects to announce support for two non-Ethereum blockchains in the first half of next year.
Judging by zone files, .luxe names have not exactly been flying off the shelves since launch.
It had around 2,600 names in its zone file yesterday, having entered general availability about a month ago.
Despite this, CEO Toby Hall said in this morning’s press release that MMX’s initial investment in .luxe (I assume he’s referring to the R&D investment rather than the cost of applying for the gTLD) has already been recouped.

MMX waving goodbye to .london? Boss puts focus on renewal profits, China

MMX’s revenue from domain renewals could cover all of its expenses within the next 24 months, if everything goes to plan, according to CEO Toby Hall.
Hall was speaking to DI this evening after the company reported its first-half financial results, which saw revenue up 22% to $6.4 million and a net loss of $14.7 million, which compared to a loss of $526,000 a year earlier.
MMX’s huge loss for the period was largely — to the tune of $11.8 million — attributable to the restructuring of an “onerous” contract with one of its gTLD partners.
Hall refuses point blank to name that partner, but for reasons I discussed last year, I believe it is .london sponsor London & Partners, which is affiliated with the office of the Mayor of London.
When L&P selected MMX to be its registry partner for .london back in 2012, I understand a key reason was MMX’s promise to pay L&P a fixed annual fee and commit to a certain amount of marketing spend.
But two years ago, after it became clear that .london sales were coming in waaaay below previous management’s expectations, MMX renegotiated the deal.
Under the new deal, instead of committing to spend $10.8 million on marketing the TLD itself, MMX agreed to give half that amount to L&P for L&P to do its own marketing.
It appears that L&P has already spunked much of that cash ineffectively, or, as MMX put it:

a significant portion of that marketing budget has been spent by the partner with minimal impact on revenues in the current year and no expectation of any material uplift in future periods

MMX seems to have basically written off the .london deal as a bad call, and now that MMX is no longer in the registry back-end or registrar businesses, it seems unlikely that the .london partnership will be extended when it expires in three years.
Again, Hall would not confirm this bad contract was for .london — I’m making an informed guess — but the alternatives are limited. The only other TLDs MMX runs in partnership currently are .review and .country, and not even 2012 MMX management would have bet the farm on those turkeys.
Another $2.1 million of the company’s H1 net loss is for “bad debt provisions” relating the possibility that certain US-based registrar partners may not pay their dues, but this provision is apparently related to a new accounting standard rather than known deadbeats threatening to withhold payments.
If you throw aside all of this accountancy and look at the “operating EBITDA” line, profit was up 176% to $661,000 compared to H1 2017.
While the loss may have cast a cloud over the first half, Hall is upbeat about MMX’s prospects, and it’s all about the renewals.
“Renewal revenue will be more than all the costs of business within 24 months,” he said. To get there, it needs to cross the $12 million mark.
He told DI tonight that “an increasing percentage of our business is based on renewals… just on renewal revenue alone we’ll be over $10 million this year”.
Renewal revenue was $4.7 million in 2017 and $2.4 million in 2016, he said. In the first half, it was was up 40% to $3.4 million.
MMX’s acquisition of porn domain specialist ICM Registry, which has renewal fees of over $60 per year, will certainly help the company towards its 2018 goal in the second half. ICM only contributed two weeks of revenue — $250,000 — in H1.
Remarkably, and somewhat counter-intuitively, the company is also seeing renewal strength in China.
Its .vip gTLD, which sells almost exclusively in China, saw extremely respectable renewals of 76% in the first half, which runs against the conventional wisdom that China is a volatile market
Hall said that .vip renewals run in the $5 to $10 range, so apparently TLD volume is not being propped up by cheap wholesale renewal fees. The TLD accounts for about 30% of MMX’s renewal revenue, Hall said.
About 60% of .vip’s domains under management are with Chinese registrar Alibaba. The biggest non-Chinese registrar is GoDaddy, with about 3% of the namespace.
More exposure to China, and specifically Alibaba, is expected to come soon due to MMX’s repurposing of the 2012-logic gTLD .luxe, which is being integrated into the Ethereum blockchain.
MMX said last week that some six million (mostly Chinese) users of the imToken Ethereum wallet will in November get the ability to register .luxe domains via imToken and easily integrate them with their Ethereum assets.
The announcement was made at the Alibaba Cloud Computing Conference in China last week, so you can probably guess imToken’s registrar of choice.

My brain explodes trying to understand MMX’s new blockchain deal for .luxe

Minds + Machines has abandoned plans to launch .luxe as a gTLD for luxury goods and instead made a deal to sell it as an address for cryptocurrency wallets.
If you thought it was a silly move marketing .ws as meaning “web site” or .pw as “professional web”, you’re probably not going to like the backronym MMX has in mind for .luxe:
“Lets U Xchange Easily”.
Really.
Tenuous though that marketing angle may be, the concept behind the newly repurposed TLD is actually quite interesting and probably rises to the level of “innovation”.
MMX has inked a deal with Ethereum Name Service, an offshoot of Ethereum, an open-source blockchain project.
Ethereum is largely used as a cryptocurrency, like BitCoin, enabling people to transfer monetary value to each other using “wallet” applications, though it has other uses.
I’m just going to come right out and say it: I don’t understand how any of this blockchain stuff works.
I’ve just spent an hour on the phone with MMX CEO Toby Hall and I’m still not 100% clear how it integrates with domains and whether the .luxe value proposition is really, really cool or really, really stupid.
I’ll just tell you what I do understand.
Currently, when two Ethereum users want to transfer currency between each other, the sender needs to know the recipient’s wallet address. This is a 40-character nonsense hash that makes an IPv6 address look memorable.
It obviously would be a lot better if each user had a human-readable, memorable address, a bit like a domain name.
Ethereum developers thought so, so they created the Ethereum Name Service. ENS allowed people to use “.eth” domains, like john.eth, as a shorthand address for their wallets. I don’t know how it works, but I know .eth isn’t an official TLD in the authoritative root.
About 300,000 people acquired .eth domains via some kind of cryptographic auction process that I also don’t understand. Let’s just call it magic.
Under the deal with MMX, some 26 million Ethereum wallet owners will be able use .luxe domains, dumping their .eth names if they have them.
The names will be sold through registrars as usual, at a price Hall said will be a little bit more than .com.
Registrants will then be able to associate their domains with their 40-character wallet addresses, so they can say “Send $50 to john.luxe” and other crypto-nerds will instantly know what to do. Ethereum wallets will apparently support this at launch.
Registrars will need to do a bit of implementation work, however. Hall said there’ll be an API that allows them to associate their customers’ domains with their wallets, and to disassociate the two should the domain be transferred to somebody else.
This is not available yet, but it will be before general availability this November, he said.
What this API does is beyond my comprehension.
What I do understand is that at no point is DNS used. I thought perhaps the 40-char hash was being stored in the TXT field of a DNS record, but no, that’s not it. It’s being stored cryptographically in the blockchain. Or something. Let’s just say it’s magic, again.
The value of having a memorable address for a wallet is very clear to me, but what’s not at all clear to me is why, if DNS is not being queried at any part of the Ethereum transaction, this memorable address has to be a domain name.
You don’t need a domain name to find somebody on Twitter, or Instagram, or Grindr. You just need a user name. Why that model couldn’t apply here is beyond me.
Hall offered that people are familiar with domain names, adding that merchants could use the same .luxe domain for their web site as they use for their Ethereum wallets, which makes sense from a branding perspective.
The drawback, of course, is that you’d have to have your web site on a .luxe domain.
The launch plan for .luxe sees sunrise begin August 9, running for 60 days. Then there’ll be two weeks for .eth name holders to claim their matching .luxe names. Then an early access period. GA starts November 6.
While it should be obvious by now I don’t fully “get” what’s going on here, it strikes me as a hell of a lot more interesting way to use .luxe than its originally intended purpose as a venue for luxury goods and services.
Let’s face it, depending on pricing it would have turned out either as a haven for spammers, a barely-breaking-even also-ran, or a profitable business propped up by a couple thousand trademark owners paying five grand a year on unused defensive regs.