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How much are new gTLDs really costing trademark owners? We have some numbers.

Kevin Murphy, May 29, 2014, 18:26:45 (UTC), Domain Registries

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.

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Comments (15)

  1. Simonetta says:
    May 29, 2014 at 7:48 pm

    You also assume that every single Sunrise application is done as a defensive registration, rather than a way for you to secure your legal access to a domain name you might genuinely want to use because the extension fits with your brand or product.

    Reply
  2. NameYouNeed says:
    May 29, 2014 at 9:33 pm

    The reason? Most company execs are asking, “What is a new gTLD?” By the time you finish explaining, they don’t care! 😀

    Reply
  3. Rubens Kuhl says:
    May 29, 2014 at 11:10 pm

    $165 * 144.2 = $23793 per gTLD or 13% of the application fee. Not as much as a lot of applicants mentioned in their business plans…

    Reply
  4. Jacob says:
    May 30, 2014 at 7:43 am

    I’m just curious; are the numbers of Sunrise applications falling as we get deeper into this? It seems like I am seeing <100/TLD lately.

    Reply
  5. John says:
    May 30, 2014 at 10:37 am

    I wonder though, how many brands have registered DPML blocks in Donuts and Rightside.
    Their TLD’s are making up a good proportion of all new gTLD’s already released. Could be a reason for the “low turnout” in sunrises so far

    Reply
    • Kevin Murphy says:
      May 30, 2014 at 11:06 am

      I considered that, but fact is the Donuts/Rightside gTLDs are showing higher numbers of sunrise registrations than gTLDs that *don’t* have DPML.

      Reply
  6. Konstantinos Zournas says:
    May 30, 2014 at 1:38 pm

    Kevin,
    the numbers are pretty much right.
    But you forgot to say that trademark holders sometimes have to pay for premium renewals as well for some domains.
    I have seen sunrise domains with renewals up to $400/year.

    Reply
  7. Brad Newberg says:
    May 30, 2014 at 7:33 pm

    From my discussions with brand owners–I’m a trademark attorney–three things are at play here.
    1) The vast majority of trademark owners have decided that they cannot possibly afford to properly defensively register, and therefore it makes better sense not to do it at all with the possible exception of a block like Donuts’ DPML (that should probably have been in your costs).
    2) “NameYouNeed” is exactly right. Try going into a Starbucks or supermarket and asking a random person if they know what a gTLD is or that new ones have been launching. I won’t hold my breath until you find a person that says yes. No one expected market awareness to be practically zero. Try being an in house lawyer and asking company execs for millions of dollars to defend against something they’ve never heard of.
    3) There is a general feeling that gTLDs were relying on defensive registrations to succeed and if trademark owners take their ball and go home, the whole thing might go away. Plus, in conjunction with #1 and #2 if someone squats on your brand but no one is there to hear it, does it make a sound?

    Reply
    • Kevin Murphy says:
      May 30, 2014 at 7:36 pm

      Unfortunately I wasn’t able to include DPML in my costs because Donuts won’t say how many registrations the service has attracted.

      Reply
      • Konstantinos Zournas says:
        May 31, 2014 at 12:11 am

        I have scanned a lot of keywords and a few trademarks and have not found more than 100 DPML blocks. Even if I have missed A LOT it shouldn’t be more than 300.
        At $3000/5 years that is $180,000 per year.

        Reply
    • Rubens Kuhl says:
      May 30, 2014 at 9:23 pm

      Although these 3 things looks like bad news for registries, they are actually very good news for the program. It implies that only real end-users will be interested in registering new gTLDs. Slower growth curves and less revenue, but stronger relevance.

      Reply
      • Kevin Murphy says:
        May 31, 2014 at 12:10 am

        That would be true if the majority of registrants to date were end users, but I don’t think that’s the case either.

        Reply

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