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.xxx boss says new gTLD registries need to “wake up”

Kevin Murphy, February 23, 2015, 07:22:33 (UTC), Domain Registries

ICM Registry president Stuart Lawley may be just weeks away from launching his second and third gTLD registries, but that doesn’t mean he has a positive outlook on new gTLDs in general.
“I think people need to wake up,” he told DI in a recent interview. “If you do the math on some of these numbers and prospective numbers, it just doesn’t stack up for a profitable business.”
“The new ‘Well Done!’ number seems to be a lot less than it was six months ago or 12 months ago,” he said.
Lawley said he’s among the most “bearish” in the industry when it comes to new gTLD prospects. And that goes for ICM’s own .porn, .sex and .adult, which are due to launch between March and September this year.
While he’s sure they’ll be profitable, and very bullish on the search engine optimization benefits that he says registrants could be able to achieve, he’s cautious about what kind of registration volumes can be expected. He said:

If you add up everybody that has ever bought a .xxx name, including the Sunrise B defensives, we have got a target market of about 250,000 names. People to go back to and say, “Look, you still have a .xxx or you had a .xxx at some stage. Therefore, we think you may be interested in buying .porn, .sex or .adult for exactly the same reasons.”
So, our expectations to sell to a whole new market outside of those quarter of a million names is probably quite limited.

Lawley said that he believes that the relatively poor volume performance of most new gTLDs over the last year will cause many registrars to question whether it’s worth their time and money to offer them.

I can see why registrars can’t be bothered. How many of these am I going to sell? Am I going to sell two hundred of them? Am I going to make five dollars per name? That’s one thousand dollars. It’s not worth it to me to put in ten thousand dollars worth of labor and effort to make one thousand dollars in revenue. So, I think that’s a challenge that many of the small lone player TLDs may face.

Lawley said he’s skeptical about the ability of major portfolio players, such as Donuts, to effectively market their hundreds of gTLDs, many of which are targeted at niche vertical markets.
He said in an ideal world a gTLD would need to spend $20 million to $30 million a year for a few years in order to do a proper PR job on a single TLD — ICM spent about $8 million to $9 million, $5.5 million of which was on US TV spots — and that’s just not economically viable given how many names are being sold.
But he added that he thinks it’s a good thing that some new gTLDs are seeing a steady and fairly linear number of daily additions, saying it might point to better long-term stability.

A lot of the TLDs that seem to be doing okay — .club for argument’s sake and several others in that ilk — seem to be doing their three hundred domains per day ADD, or 32 or 12 or whatever the number is, in a relatively linear fashion six or seven months after launch, which I think is potentially positive if one extrapolates that out.

The full interview, which also addresses SEO, dot-brands, registrar pay-for-placement and smart search, can be read by DI PRO subscribers here.

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Comments (2)

  1. KC says:
    February 23, 2015 at 8:35 am

    “$20 million to $30 million a year for a few years in order to do a proper PR job on a single TLD” That’s a lot of cash to burn. No far I have not seen any registry committed to this aggressive campaign.

    Reply
  2. Constantine Roussos (.MUSIC) says:
    February 24, 2015 at 12:52 am

    Stuart Lawley’s assessment is correct. You cannot expect registrars to be the ones taking all the financial risk of “branding” new gTLDs, especially given the confusing supply of new synonym TLD launches (e.g. .PICS, .PHOTO, .PHOTOS, .PHOTOGRAPHY etc), each competing for the same shelf space.
    The majority of the portfolio applicants have approached marketing as an afterthought, assuming that the best way to market a TLD is to commoditize it without any differentiation. This TLD marketing strategy might have worked in the past but it has no sustainable, competitive advantage anymore.
    Today, merely having a new TLD available for consumption on a registrar channel does not equal innovation, consumer choice and competition. Branding and marketing require a strong strategic plan and a real marketing budget.
    The real competition to .COM will be those new gTLDs that will become beyond meaningful, are trusted and customized to provide benefits beyond the novelty name of the extension.
    Thus far the only innovation that the new gTLD program has provided is the private auctions: win if you “pay up” millions and win if you “lose” and get “paid off.” These “private” auctions do not benefit registrants, do not benefit the public interest, nor do they do anything to create differentiation in the gTLD space which is now flooded with TLDs that are to the greatest extent launching without any real marketing and branding plans.
    In sum, the past “factory” commoditized approach of TLD marketing (that every prior TLD launches have been fortunate to enjoy) is no longer a sustainable and competitive strategy with such a supply of new gTLDs.
    New gTLDs are no different than any other brands: what is their differentiating factor and why would someone want to register them in place of .COM or .ORG or a relevant ccTLD? Or can they complement their existing TLDs in an effective manner?
    The only way to alleviate consumer confusion is through effective branding and community adoption with the right policies catering to the specific needs of those communities.
    Stuart knows what he is talking about.

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