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Disappointing .sexy launch shows the importance of the channel

Kevin Murphy, February 27, 2014, Domain Registries

.sexy not so sexy after all?

Uniregistry’s first new gTLDs to launch, .sexy and .tattoo, have showed a poor first-day performance after the company failed to secure Go Daddy as a registrar partner.

During the 60-day sunrise period and the first 30 hours of general availability, .sexy sold just shy of 2,700 domains, judging by zone files, while .tattoo racked up a pitiful 700 registrations.

This makes .sexy the 19th most popular new gTLD. On the DI PRO league table it’s sandwiched between .holdings and .camera, and .tattoo the 28th, between .voyage and .careers.

It’s not a completely terrible performance for .sexy — .camera and .holdings have been on the market for three and four weeks respectively — but one might have expected better sales for a string that isn’t tied to a particular vertical niche and is, arguably, just intrinsically attractive.

.sexy’s first-day performance is in the same ball park as Donuts’ .gallery and .estate, hardly strings to get excited about.

For .tattoo, the story is less gray — under 1,000 domains sold is not a success in anyone’s book.

I think there are a couple reasons for the poor showing.

First, the strings themselves. While I can see .sexy proving popular with regular buyers, it doesn’t easily lend itself to domain names that are instinctively attractive to domainers.

You can put pretty much any profession or product name in front of a .guru and it is meaningful as a brand or a rather grandiose self-appointed title. Not so with .sexy.

Ironically, this appears to be Uniregistry CEO Frank Schilling’s “Toilet Paper Test” in action.

Schilling argues that the test of how generic, and by extension popular, a gTLD is should be whether toiletpaper.[tld] works. I think toiletpaper.guru works, but toiletpaper.sexy does not.

Second, Uniregistry lacked distribution.

While it had big registrars such as eNom and NameCheap (almost 50 in total) on its books, it lacked Go Daddy and 1&1 — the two companies that have been pushing pre-registrations more heavily than any other.

The reason Donuts’ gTLDs performed better in their first hours is that these companies, mainly Go Daddy, had been collecting pre-regs for weeks and spammed the registry with registration requests at the first second they were able. Day one registrations actually represent weeks of marketing and leads.

Uniregistry took an awfully big risk by demanding registrars hand over part of the customer relationship to the registry, and it seems to have impacted its sales.

The company plans to shortly launch its own registrar, and is betting hard of this being a successful sales channel.

I’m somewhat skeptical about this strategy, at least in the short term.

Go Daddy has spent tens (hundreds?) of millions of dollars on marketing over the last decade or so. It has a lot of eyeballs already and it’s going to be nigh-on impossible to replicate that degree of success.

Uniregistry is not the only new gTLD portfolio registry enthusiastically embracing vertical integration.

The trail was blazed by Minds + Machines, which launched its own registrar last November. Today, it’s difficult to tell on the company’s web site where the registrar ends and the registry begins.

What’s M+M’s launch channel going to look like? We’re not going to know for sure until its first TLDs hit the market.

Are the big registrars going to make the vertically integrated business model difficult to carry off successfully? While registries are obliged to give access to any registrar that wants to sell their names, registrars have no obligations to carry any TLD they don’t want to.

Afilias wants registrar ownership ban lifted on .mobi and .pro

Afilias has applied to ICANN to have its ban on owning registrars in two of its own gTLDs, .mobi and .pro, lifted.

With requests to ICANN a few days ago (here and here), the company said it wants to be able to own more than 15% of an ICANN-accredited registrar that sells both TLDs, which is currently forbidden by the two Registry Agreements in question.

Afilias’ proposed new .info contract, which was renegotiated this year (because it expired) and closed for public comment last week, would also enable the company to vertically integrate with a .info registrar.

A process for relaxing the cross-ownership rules on a per-TLD basis was approved by ICANN’s board of directors last October.

The only registry so far to have its contractual ban lifted is puntCat, the .cat registry operator.

When an ICANN working group was discussing the vertical integration issue a couple of years ago, Afilias was one of the participants that held fast against any relaxation of the 15% ownership cap, eventually driving the working group into stalemate and forcing the ICANN board’s hand.

New .org contract could make registrars sign up to 2013 RAA

Registrars risk losing their right to sell .org domain names unless they sign up to the new 2013 Registrar Accreditation Agreement.

The change is among several proposed to Public Interest Registry’s .org Registry Agreement with ICANN, which was published for public comment over the weekend.

Amendments to the .org RA, which came to the end of its six-year term in April, are very similar to those put forward for the .info and .biz contracts last month.

But .org is a far larger and more popular TLD, putting more pressure on more registrars to sign up to the 2013 RAA, with its new Whois verification and privacy service obligations.

For registrars on the 2009 and 2001 RAAs, the clock would start ticking the day that registrars representing two thirds of all .org registrations sign the 2013 RAA.

That threshold could be met in .org if the top eight or nine registrars make the switch.

PIR would then get 60 days to tell its remaining registrars that they have 270 days to move to the new RAA. Any registrar that failed to adopt it in that time would lose its right to sell .org domain names.

As with the .info and .biz contracts, the provisions related to the 2013 RAA would only kick in if Verisign asks for the same changes for its .com and .net agreements, which may never happen.

Other changes proposed for the .org contract include:

  • Cross-ownership restrictions. PIR will be able to own a registrar under the new deal, lifting the long-standing ban on gTLD registries selling domains in their own TLD.
  • Price increases. PIR will be able to raise its .org registry fee by 10% per year, from its current level of $8.25.
  • Code of Conduct. PIR will have to abide by the same registry Code of Conduct as new gTLD operators, which contains provisions mainly related to equal registrar access.

The propose .org contract is open for public comment until August 12.

PuntCAT cross-ownership ban lifted

PuntCAT has become the first gTLD registry operator to have a ban on owning an affiliated registrar lifted.

The change means the company will be able to directly market its .cat domain names to registrants via a registrar that it owns.

An amendment to its ICANN contract posted yesterday deletes the clause that prevents the company owning more than 15% of an ICANN-accredited registrar. The change follows a December request.

PuntCAT is the first to take advantage of ICANN’s liberalization of rules on registry-registrar cross ownership.

Afilias and Neustar will benefit from the same changes, but their respective .info and .biz registry agreements are currently in public comment periods and not yet signed.

Huge registrar shake-up coming to .biz and .info

Afilias and Neustar will be soon able to sell .biz and .info domains direct, and may have to shut down registrars that refuse to sign up to the new 2013 Registrar Accreditation Agreement.

Those are two of the biggest changes proposed to the companies’ ICANN contracts, drafts of which were published this morning six months after their last registry agreements expired.

The new .biz and .info deals would allow both companies to vertically integrate — that is, own a controlling position in a registrar that sells domains in their respective gTLDs.

This would remove unwanted friction from their sales and marketing efforts, but would mean both registries would start competing with their own registrar channel in the retail market.

That’s currently not allowed in almost all gTLD contracts, but is expected to become commonplace in the era of new gTLDs, which have no such ownership restrictions.

These new vertical integration clauses were not unexpected; it’s been envisaged for a couple of years that the restrictions would be dropped in legacy gTLDs.

What is surprising are newly proposed clauses that would oblige Neustar and Afilias to terminate accredited registrars’ access to their TLDs if they don’t sign up to the 2013 RAA.

Under the process set out in the contracts, when registrars representing 67% of the domains in each given TLD have signed up to the 2013 RAA, all the other registrars would have between 270 and 330 days to also sign up to it or lose their ability to access the .biz/.info registries.

That would mean no selling new names and no accepting inbound transfers — a growth death sentence in the affected TLDs.

In the case of .info, in which Go Daddy has a 45% market share, it would only take the top four registrars to sign up to the 2013 RAA before the clock started ticking for the others.

However, this 67% rule would only kick in for Afilias and Neustar if Public Interest Registry and Verisign also voluntarily agree to the same rules for their .org, .com and .net gTLDs.

It’s a pretty aggressive move by ICANN to push the 2013 RAA onto registrars via its contracts with registries, but not the first.

In the separately proposed base New gTLD Registry Agreement, expected to be finalized in the next few weeks, registrars can only sell new gTLD domains if they’re on the 2013 RAA.

Other changes to the .biz and .info contracts include giving the registries the ability to block certain domains from registration to deal with security threats. Registries have been doing this since Conficker, but now they’ll be explicitly allowed to under their contracts.

They’ll also now be subject to the same emergency back-end transition provisions as new gTLDs, in the event of a catastrophic failure.

Both companies will also get to keep their ability to raise registry fees by 10% a year.

Presumably, given that the US Department of Commerce is not party to the .biz and .info deals, neither registry will get the same nasty surprise that Verisign got last year when Commerce froze its prices.

Both proposed contracts are now open for public comment at ICANN, here and here.

The previous contracts actually expired last December but were extended for six months due to ICANN’s focus on new gTLDs and the fact that it wanted to bring both agreements closer to the new gTLD contract.

.cat wants to ditch registrar ban

Kevin Murphy, December 27, 2012, Domain Registries

PuntCAT, the .cat registry, has become the first gTLD operator to apply to ICANN for the right to dump the registrar ownership ban in its contract.

If the request is approved by ICANN, the company will be able to own an ICANN-accredited registrar and start selling .cat domain names more or less directly to registrants.

The company has proposed several amendments to its existing contract that would allow it to become an “affiliate” of — ie own — a registrar with respect to its own gTLD.

ICANN believes the request, which is open for public comment until February 13, will not create any competition problems.

ICANN approved the rules for enabling cross-ownership in October, after competition concerns from the European Commission and US Department of Commerce appeared to disappear.

The .cat request was handled via the Process for Handling Requests for Removal of Cross-Ownership Restrictions on Operators of Existing gTLDs, which absolutely nobody is calling PFHRFROCOROOOEG.

Under the rules, the alternative to amending an existing contract is adopting the standard new gTLDs registry agreement wholesale, but I’m not expecting any incumbent registries to do that.

PuntCAT is pretty much unique among “sponsored” gTLD operators in that it’s experienced steady growth, not subject to the same degree of speculation-related spikes as others, since launching in 2006.

It currently has roughly 60,000 domains under management, growing at about 10,000 names a year. Three Spanish registrars hold over half of the market between them, led by Nominalia.

But the gTLD faces an uncertain future.

The Catalonia region of Spain, which .cat represents, is set for an independence referendum in 2014. If it were to split off into a new country, it would get its own potentially competing ccTLD.

Sales could benefit from the imminent delegation of .dog, which three companies have applied for as a gTLD, but PuntCAT’s rules state that all .cat sites must have Catalan-language content.

Soon Verisign could sell .com domains direct

Kevin Murphy, October 22, 2012, Domain Registries

With little fanfare, ICANN last week formally approved new rules that could allow incumbent registry operators to own registrars that sell domains in their own gTLDs.

The policy would give the likes of Verisign, Neustar and Afilias the right to become affiliated with registrars that sell .com, .biz and .info names respectively.

These registries would have to sign up to the standard new gTLD registry agreement first, or submit to contract renegotiation in order to drop their current cross-ownership bans.

In either case, they would become bound by the new registry Code of Conduct, preventing them from offering preferential terms to their affiliated registrars.

The new rule came into effect following the ICANN board meeting on Thursday, at which this resolution was passed.

ICANN had already dropped cross-ownership restrictions for new gTLD registry operators, but held back from bringing in the same rules for incumbents due to concerns from competition authorities.

After exchanges of letters with the European Commission and US Department of Commerce, these concerns appear to have dried up, however. ICANN said in its resolution:

it appears that there is no longer any reason against extending the approved process to existing registry operators for their own TLDs.

This action will be an advantage for the ICANN community, as it will provide the opportunity for treating all registry operators equally with respect to cross-ownership restrictions.

Registries would have their requests for contract changes referred to competition authorities for comment before ICANN would approve them.

Based on previous comments, Verisign might have a struggle with respect to .com but the other incumbents might have an easier time renegotiating their deals.

Neustar has been particularly outspoken in its desire to get rid of the contractual language preventing it owning a .biz registrar, so we might see that company first to get into talks.

Both .biz and .info contracts are up for renewal before the end of the year.

Hot topics for ICANN Singapore

Kevin Murphy, June 17, 2011, Domain Policy

ICANN’s 41st public meeting kicks off in Singapore on Monday, and as usual there are a whole array of controversial topics set to be debated.

As is becoming customary, the US government has filed its eleventh-hour saber-rattling surprises, undermining ICANN’s authority before its delegates’ feet have even touched the tarmac.

Here’s a high-level overview of what’s going down.

The new gTLD program

ICANN and the Governmental Advisory Committee are meeting on Sunday to see if they can reach some kind of agreement on the stickiest parts of the Applicant Guidebook.

They will fail to do so, and ICANN’s board will be forced into discussing an unfinished Guidebook, which does not have full GAC backing, during its Monday-morning special meeting.

It’s Peter Dengate Thrush’s final meeting as chairman, and many observers believe he will push through some kind of new gTLDs resolution to act as his “legacy”, as well as to fulfill the promise he made in San Francisco of a big party in Singapore.

My guess is that the resolution will approve the program in general, lay down some kind of timetable for its launch, and acknowledge that the Guidebook needs more work before it is rubber-stamped.

I think it’s likely that the days of seemingly endless cycles of redrafting and comment are over for good, however, which will come as a relief to many.

Developing nations

A big sticking point for the GAC is the price that new gTLD applicants from developing nations will have to pay – it wants eligible, needy applicants to get a 76% discount, from $185,000 to $44,000.

The GAC has called this issue something that needs sorting out “as a matter of urgency”, but ICANN’s policy is currently a flimsy draft in desperate need of work.

The so-called JAS working group, tasked with creating the policy, currently wants governmental entities excluded from the support program, which has made the GAC, predictably, unhappy.

The JAS has proven controversial in other quarters too, particularly the GNSO Council.

Most recently, ICANN director Katim Touray, who’s from Gambia, said the Council had been “rather slow” to approve the JAS’s latest milestone report, which, he said:

might well be construed by many as an effort by the GNSO to scuttle the entire process of seeking ways and means to provide support to needy new gTLD applicants

This irked Council chair Stephane Van Gelder, who rattled off a response pointing out that the GNSO had painstakingly followed its procedures as required under the ICANN bylaws.

Watch out for friction there.

Simply, there’s no way this matter can be put to bed in Singapore, but it will be the topic of intense discussions because the new gTLD program cannot sensibly launch without it.

The IANA contract

The US National Telecommunications and Information Administration wants to beef up the IANA contract to make ICANN more accountable to the NTIA and, implicitly, the GAC.

Basically, IANA is being leveraged as a way to make sure that .porn and .gay (and any other TLD not acceptable to the world’s most miserable regimes) never make it onto the internet.

If at least one person does not stand up during the public forum on Thursday to complain that ICANN is nothing more than a lackey of the United States, I’d be surprised. My money’s on Khaled Fattal.

Vertical integration

The eleventh hour surprise I referred to earlier.

The US Department of Justice, Antitrust Division, informed ICANN this week that its plan to allow gTLD registries such as VeriSign, Neustar and Afilias to own affiliated registrars was “misguided”.

I found the letter (pdf) utterly baffling. It seems to say that the DoJ would not be able to advise ICANN on competition matters, despite the fact that the letter itself contains a whole bunch of such advice.

The letter has basically scuppered VeriSign’s chances of ever buying a registrar, but I don’t think anybody thought that would happen anyway.

Neustar is likely to be the most publicly annoyed by this, given how vocally it has pursued its vertical integration plans, but I expect Afilias and others will be bugged by this development too.

The DoJ’s position is likely to be backed up by Europe, now that the NTIA’s Larry Strickling and European Commissioner Neelie Kroes are BFFs.

Cybercrime

Cybercrime is huge at the moment, what with governments arming themselves with legions of hackers and groups such as LulzSec and Anonymous knocking down sites like dominoes.

The DNS abuse forum during ICANN meetings, slated for Monday, is usually populated by pissed-off cops demanding stricter enforcement of Whois accuracy.

They’ve been getting louder during recent meetings, a trend I expect to continue until somebody listens.

This is known as “engaging”.

Geek stuff

IPv6, DNSSEC and Internationalized Domain Names, in other words. There are sessions on all three of these important topics, but they rarely gather much attention from the policy wonks.

With IPv6 and DNSSEC, we’re basically looking at problems of adoption. With IDNs, there’s impenetrably technical stuff to discuss relating to code tables and variant strings.

The DNSSEC session is usually worth a listen if you’re into that kind of thing.

The board meeting

Unusually, the board’s discussion of the Guidebook has been bounced to Monday, leading to a Friday board meeting with not very much to excite.

VeriSign will get its .net contract renewed, no doubt.

The report from the GAC-board joint working group, which may reveal how the two can work together less painfully in future, also could be interesting.

Anyway…

Enough of this blather, I’ve got a plane to catch.

.brand TLDs still face barriers

Kevin Murphy, May 16, 2011, Domain Policy

Companies planning to apply for “.brand” top-level domains still have concerns that ICANN’s new gTLD program does not adequately cater to their unique requirements.

ICANN has so far resisted calls from the likes of the Coalition for Online Accountability to create clearly delineated categories of gTLD, instead favoring the one-size-fits-all approach.

But one type of gTLD where the Applicant Guidebook has started to introduce exceptions to the rules is the so-called “.brand”.

In its latest draft, for example, the Guidebook’s Code of Conduct for vertically integrated registries/registrars does not apply to single-registrant TLDs such as .brands.

The Guidebook also makes it mostly clear that ICANN does not intend to re-assign .brands to different registry operators in the event that the brand decides to discontinue the TLD.

But those who are working with potential .brand applicants still have concerns.

Co-existence

Arguably biggest outstanding problem to emerge from the latest set of comments filed with ICANN is the notion of “co-existence”, raised by the likes of Valideus, ECTA and the Business Constituency.

The Guidebook currently calls for TLDs that are potentially confusing in meaning or appearance to be lumped into the same “contention sets” from which only one winner will emerge.

The worry is that this will capture companies with similar sounding brands. ECTA called for a mechanism to exclude .brands from these requirements:

The Draft Applicant Guidebook 6 does not take into account either co‐existence agreements or natural co‐existence. Currently a successful application from NBC in round one would preclude ABC or BBC or NBA in future years. Equally, should both EMI, the music company and ENI, the energy company apply, they would be placed in a Contention Set and could in theory face each other in an auction. In the real world these companies co‐exist.

It’s an interesting point, and not one that’s received a great deal of airplay in recent discussions.

There’s also the problem that companies with two-letter brands, such as HP or BP, are essentially banned from getting their .brand, because there’s a three-letter minimum on new TLDs.

Geographic name protections

The ICANN Governmental Advisory Committee has pushed hard for the protection of geographical terms at the second level in new gTLDs, and has won significant concessions.

One of the results of this is that if Canon, say, has .canon approved, it will be unable to immediately use usa.canon or japan.canon domains names – one of the most logical uses of a .brand.

ICANN plans to enable registries to loosen up these restrictions, but the Guidebook does not currently spell out how this will happen, which leaves a significant question mark over the value of a .brand.

ECTA wrote in its comments to ICANN:

This prohibition severely limits brand owners unnecessarily. On the contrary a .brand domain should provide clients with an intuitive replacement for ccTLDs. It would seem to be more logical if Internet users could replace www.mycompany.de with www.de.mycompany rather than having to type www.mycompany/de.

Registrar discrimination

The BC has called for the Guidebook to be rephrased to made it clear that .brand TLDs should not have to offer their domains through a multitude of registrars on “non-discriminatory” terms.

The BC wants this language adding to the rules: “Single-Registrant TLDs may establish discriminatory criteria for registrars qualified to register names in the TLD.”

Given .brands will have essentially one customer, it would be a pretty crazy situation if more than one registrar was approved to sell them. It may be a hypothetical risk, but this is a strange industry.

UDRP

All new gTLD registries will have to abide by the Uniform Dispute Resolution Process. The problem is that successful UDRP cases generally result in a domain name being transferred to the complainant.

This could result in a situation where a third-party trademark holder manages to win control a domain name in a competitor’s .brand TLD, which would be intolerable for any brand owner.

The BC suggests that domains won in this way should be allowed to be set to “reserved and non-resolving” instead of changing hands.

Rules for registry-registrar mergers proposed

ICANN has revealed how it intends to enable incumbent domain name registries to also become registrars, ending a decade of cross-ownership restrictions.

The industry shake-up could allow companies such as VeriSign, Neustar and Afilias to become accredited registrars in their own top-level domains later this year.

Hypothetically, before long you could be able to go directly to VeriSign for your .com domains, to Afilias and Public Interest Registry for .info and .org, or to Neustar for .biz.

The changes could potentially also kick off a wave of consolidation in the industry, with registry operators buying previously independent registrars.

ICANN’s proposed process is straightforward, requiring just a few amendments to the registries’ existing contracts, but it could also call for governmental competition reviews.

Registries will have to agree to abide by a Code of Conduct substantially the same as the one binding on wannabe registries applying later this year under the new gTLD program.

The Code is designed to stop registries giving their affiliated registrars unfair advantages, such as lower prices or preferential access to data, over other ICANN-accredited registrars.

Registries would also have the option to adopt the registry contract from the new gTLD Applicant Guidebook wholesale, although I expect in practice this is unlikely to happen.

ICANN would be able to refer vertical integration requests to national competition authorities if it determined that cross-ownership could cause “significant competition issues”.

VeriSign would be the most likely to be hit by such a review, but it’s also the only registry that does not appear to have been particularly hamstrung over the years by the forced separation rules.

The proposed process for registries to request the contract changes has been posted to the ICANN web site and is now open for public comment.