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Donuts explains its premium pricing strategy

Kevin Murphy, December 17, 2013, 09:19:15 (UTC), Domain Registries

Add Donuts to the list of registries planning to use .tv-style variable pricing after their new gTLDs start to go to general availability next year.
COO Richard Tindal told DI last night that each of its upcoming registries could have “two, three, four, five, six — it varies — levels of buy-it-now pricing”.
He was referring to pricing during general availability, not any of Donuts’ special launch phases.
The actual number of registry-reserved names held for auction or future promotional purposes is likely to be quite small — often under 20 names per TLD — Tindal said.
Instead, Donuts wants to get the names it has identified as “premium” to market as quickly as possible, but with a higher annual price than the base registry fee. He said:

Let’s take .clothing, that’s coming out at the moment.
There’ll be a small — very small — number of reserved names for which we may do an auction later
The vast, vast majority of the names are first-come-first-served buy-it-now — but within Donuts TLDs, at more than one price within a TLD.
So in .clothing the standard names will be one price, then there’ll be another group of names that are premium for a higher price, and another group of names that are higher still that are premiums as well, and potentially even another group.

Tindal didn’t want to give specifics, but indicated that most premiums could carry an annual fee of under $1,000.
“Your ball-park standard name is a $10, $20, $30 name, ish, retail,” he said. “And your premium name is in the hundreds of dollars a year, typically. It varies.”
“Generally, ball-park-speaking, the vast majority of our names will be well, well under $1,000 a year,” he said.
He added that the tiers should be obvious when pre-registering names at one of Donuts’ accredited registrars.
I experimented a bit on 101domain, where the base retail price for a .clothing domain is currently $34.99 a year.
I found that and, for example, both carry a $400 price tag, and are $49.50 each, while and appear to be reserved.
Those are the retail prices, of course, which include the registrar’s mark-up. While they’re for pre-registered names, I’m not expecting the GA prices to be much different.
“These are very attractively priced names, in our view, even the premium ones we think are attractive to people,” Tindal said. “We want registrars to make some margin, we want registrants to have room for the value of the name to increase as well.”
He didn’t say how many names will be in the higher pricing tiers — it will vary by gTLD.
“We believe premiums will be a small percentage of names under management,” he said.
The tiers will be the same across all of Donuts TLDs, he said, but each given TLD may only use a subset. So if there are six possible tiers, .example may only use three of them.
Donuts does not currently plan to operate a “founders program” for its gTLDs, Tindal said.
“We just want to get these names out and in the hands of users,” he said. Donuts’ market is primarily small and medium sized enterprises.
Donuts is not the first to reveal tiered pricing for new gTLD names.
Top Level Domain Holdings recently laid out a similar pricing strategy. Its Minds + Machines registrar is already taking pre-registrations on names with renewal fees ranging into many thousands of dollars per yer for premium names.
What Box and Plan Bee have also started selling pre-registrations via their registrars that indicate tiered pricing.
Prior to new gTLDs, the only notable TLD with variable pricing was Verisign’s repurposed ccTLD, .tv.

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Comments (8)

  1. Drewbert says:

    Annual renewal fees up to 100 times that of .com
    What was that ICANN was preaching about competition being good for registrants?

    • Kevin Murphy says:

      There’s an interesting argument to be had there.
      While not defending any particular model, you could say the choice if you want a “nice” name is between high ongoing costs with a new gTLD or a high(er?) up-front fee if you want a .com from the secondary market.
      High renewals may well discourage domainers (if they’re not already scornful of the whole concept of new gTLDs), which may or may not be good for regular registrants.

      • McGaz says:

        I agree with Kevin. For a good domain, it should be MUCH cheaper than buying a good .com over a 5 year period. Maybe your renewal is $1,000 a year with a new domain, but your .com might cost you anything up to the millions.
        I also agree that domainers will be put off by the prices and they will have to change their strategy. That means that the new gTLDs will give a greater chance of getting a relevant (good) domain and a greater chance that it is not being parked by someone who has no intention of using it.

        • Rubens Kuhl says:

          The beauty of variable pricing is increasing the stock cost for domainers. In real life it’s expensive to warehouse lots of goods, now this also applies to premium domains.

  2. Kassey says:

    Now .com and even unpopular existing gTLDs look very attractive.

  3. Stigs says:

    There is no ways I will be paying their prices…
    I’ll rather wait for other tld’s to come out who make it fair for people who don’t have money, to purchase a premium name…with thousands of new tld’s coming out… donuts premiums names will look pretty standard… and at a few hundred dollars a year… people will want to give them away… more of a burden than anything else…
    Donuts is into one thing… suck out as much money as you can…

  4. Pikumaki says:

    Would the gTLD operators revoke and reprice an already registered domain name, which was available during general availability and was classified as non-premium? I think they can’t.

  5. Wenzel says:

    But where can I confirm the price before creating the domain name?

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