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New gTLDs will cost $155 billion, honest

Kevin Murphy, April 6, 2010, 21:14:26 (UTC), Domain Registries

A report out from the Coalition Against Domain Name Abuse, which pegs the cost of first-round new gTLD defensive registrations at $746 million, has set eyes rolling this evening.
CircleID rather oddly compares it to a recent Minds + Machines study, “predicting new gTLDs will only cost $.10 per trademark worldwide.”
Apples and oranges, in my view.
But numbers are fun.
My own estimate, using data from both CADNA and M+M, puts the total cost of new gTLDs defensive registrations at $155.85 billion.
For the avoidance of doubt, you should take the following calculations with a surplus mountain of salt. I worked this out on the back of the box that the envelopes came in.
I’m not trying to make a serious estimate. Got it?
How do we figure out how many domains will be defensively registered by brand owners?
Minds + Machines released a study on this in February. I don’t really buy its numbers, but let’s use them anyway.
It found that “only” 67% of brands are currently registered in .info and .biz, and “only” 29% are registered in another eight newish gTLDS.
Let’s split the difference and say that 48% of brands will be registered, one way or the other, in the next round of gTLDs
M+M’s survey included both defensive registrations and cybersquatting, as well as plenty of other use cases such as where the “brand” was also a generic term.
For no reason at all, let’s assume that half of the domains were registered by the brand owners and the other half were not. I suspect I’m being generous.
So, bearing in mind that we’re making assumptions, 24% of brands will be registered by their owners in next new gTLD round.
How many unique brands does that equate to?
I refer once again to M+M, specifically its report which concluded that the UDRP cost of new gTLDs will be $0.10 per trademark.
That claim was based on the fact that there are 1.97 million registered trademarks in the US, 2.4 million in China and 825,000 in Europe.
M+M uses this number to arrive at its headline $0.10 estimate, so I get to use it too.
With 5,195,000 international trademarks, and a 24% defensive registration rate, we get to 1,246,800 defensive registrations in any given gTLD.
But that’s just one gTLD. ICANN estimates there could be 400 new gTLDs in the first round. For our purposes, let’s just say that there’ll only be 250 successful applications.
Multiply our two numbers together, and we get 311.7 million unique defensive registrations.
CADNA reckons it will cost $500 for each registration, if they’re registered during a sunrise period.
Let’s say it will actually only cost $29 a year, around about the price of a non-sunrise new .co domain from Go Daddy.
We’re looking at a $9.04 billion cost to the brand-owning community.
Per year.
And if CADNA is right about the average sunrise costs, it’s more like $155.85 billion in the first year.
About the same as the GDP of Chile.
See, numbers are fun.

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