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Industry outlook gloomy for next year, predicts ICANN

Kevin Murphy, December 16, 2022, 15:13:03 (UTC), Domain Policy

ICANN is forecasting a downturn of the domain industry’s fortunes over the coming year according to its draft fiscal 2024 budget, published today.

The Org’s beancounters are budgeting for slumps in both legacy and new gTLD transactions, along with declines in the number of contracted registries and registrars.

Global economic conditions, such as the post-Covid recessions and high inflation being experienced by many nations, are blamed for the poor outlook.

Overall, ICANN expects to have a couple million bucks less to play with in FY24, which runs from July 2023 to June 2024.

It’s planning to receive $145.3 million, down from the $147.7 million it expects to receive in the current fiscal year, which is only half-way through.

Most of ICANN’s money comes from transaction fees on legacy gTLDs — mainly Verisign’s .com — and that’s where it’s predicting a 1% decline, from $88.3 million to $87.1 million, or 185.8 million transactions compared to 187.9 million.

ICANN receives transaction fees on every domain added, renewed or transferred between registrars.

Verisign has been lowering its financial outlook all year, as .com shrinks. Fewer .com renewals means less money for ICANN.

ICANN also thinks new gTLD sales are going down, from 25.7 transactions in the current year to 24.2 million in FY24, taking about $600,000 from ICANN’s top line.

The number of contracted registries is also predicted to decline by 19, from 1,146 to 1,127 by the end of the year, while the number of registrars is expected to increase from 2,447 to 2,452.

Other funding sources, such as ccTLD contributions and sponsorships, are expected to remain unchanged.

The draft budget is open for public comment and could well change before it is finally approved, which usually comes in May or June.

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