Verisign loses .art contract to CentralNic

CentralNic has been awarded the back-end contract for the forthcoming .art gTLD, usurping Verisign from the role.
UK Creative Ideas, which bought .art at a private auction for an undisclosed sum a year ago, appointed the company its “exclusive registry service provider”, CentralNic said.
UKCI’s original .art application named Verisign as its back-end, and this is not the first time CentralNic has sneaked away a Verisign client.
When XYZ.com acquired .theatre, and .security and .protection from Symantec, it moved them from Verisign to its .xyz provider CentralNic.
That earned XYZ and CentralNic a contract interference lawsuit, which XYZ settled in May.
Clearly litigation has not managed to chill competition in this instance.
.art is set to launch in stages over the next 12 months, CentralNic said.
UKCI estimated in its ICANN application that it would get between 25,000 and 80,000 registrations in its first year.
That may prove to be optimistic, at least at the high end.
UKCI’s vision for .art is for a restricted gTLD, which don’t tend to do huge volumes. I believe the largest restricted new gTLD is .nyc, with about 75,000 names in its zone.
All .art registrants will have to show some kind of connection to the art world, according to UKCI’s application.

This includes artists, owners and keepers of works of art, commercial art organisations (such as galleries and auction and trading houses), not-for-profit organisations (such as museums, foundations, and professional associations), supporting businesses (such as insurance, appraisal, transport) and customers and members of the general public interested in art.

Goodness knows how this will be implemented in practice, given that basically everyone is an artist to some extent.
UKCI is based in the Isle of Man, the UK dependency presumably selected for tax reasons rather than any connection to the art world, and is backed by Russian venture capitalists.

Contract breach cited as TLD Registry switches from Afilias to Chinese government back-end

The break between TLD Registry and former back-end provider Afilias may be even less amicable than first thought.
I’m hearing that TLDR served Afilias with a “Notice of Material Breach” of contract earlier this year, threatening to move its two gTLDs to a rival owned by the Chinese government.
There may even be pending litigation.
Today TLDR confirmed in a statement that it’s switching the roughly 30,000 names in .在线 (.xn--3ds443g, “Chinese online”) and .中文网 (.xn--fiq228c5hs, “Chinese website”) from Afilias to Beijing Teleinfo Network Technology Co.
Tele-info is a little-known back-end provider currently servicing four pre-launch Latin-script Chinese gTLDs.
According to TLDR, the company is owned by the Chinese Academy of Telecommunication Research, which appears to be part of the Chinese government’s Ministry of Industry and Information Technology.
According to a source, back in February TLDR told Afilias that it would switch to Tele-info if Afilias was “unable or unwilling to remedy” unspecified contractual breaches by mid-May.
I don’t know what the alleged breaches were and neither company wants to talk about it.
“Afilias does not comment on pending litigation,” a spokesperson said.
“We are not commenting on contractual or litigation matters,” a TLDR spokesperson said.
TLDR said in a statement that the switch to Tele-info will help it get a Chinese government license, so Chinese registrants will be able to start using their domains. CEO Arto Isokoski said:

The completion of this milestone will hopefully pave the way for our accreditation with Chinese regulators, which ultimately allows our China-based customer’s names to resolve legally to a website hosted from within China.

It’s hard to argue with that logic — if it’s using a government back-end for its SRS, one can see how that would oil the gears of bureaucracy.
UPDATE 1753 UTC: Afilias has just provided DI with the following statement:

With respect to TLD Registry’s charges of breach of contract, Afilias categorically denies any breach of any kind whatsoever. Afilias has complied completely with our contractual obligations and responded to all requests for assistance with their various business priorities. Since we began supporting these 2 TLDs, Afilias has met every SLA and enabled the 2 TLDS to be 100% compliant with their technical and contractual obligations to ICANN. Afilias has provided 100% compliance on every SRS requirement, and maintained their DNS with 100% availability throughout the entire period of our stewardship. TLD Registry’s charges are completely without merit.

Afilias loses back-end deals on two Chinese gTLDs

TLD Registry, the Finnish/Irish registry that runs two Chinese-script gTLDs, has ditched Afilias in favor of a Chinese back-end provider.
Afilias said tonight that as of Friday it will no longer be the back-end for .在线 (.xn--3ds443g, “Chinese online”) and .中文网 (.xn--fiq228c5hs, “Chinese website”).
The company said:

Afilias has been directed by TLD Registry to shut down the Afilias operated SRS’s for .xn—3ds443g and .xn—fiq228c5hs on June 17, 2016 at 00:00:00 UTC and transfer the registry files to TLD Registry and its new provider. In accordance with this directive from our client, the SRS will be shut down and the files will be transferred, and Afilias will no longer operate the SRS for these two strings.

TLD Registry VP Pinky Brand declined to name the registry’s new back-end provider, beyond that the winning provider is Chinese.
The new back-end will be named in the next day or so, he said.
Registrars have been informed about the switch, Afilias said.
It’s not yet clear whether TLD Registry has decided to switch providers for cost reasons or in order to more deeply embed itself in China.
The company was founded by and is managed by Finns and is legally based in Ireland, but it only runs Chinese-script gTLDs.
The Chinese government has regulations, and is proposing more, preventing Chinese citizens using domains that do not meet certain guidelines, which include a corporate presence in China.
Several registries are opening up offices in China in order to abide by these rules, but I’m not aware of any that have switched back-ends for that reason.
The two gTLDs have fewer than 30,000 domains in their zone files between them.

At least one in 10 new gTLDs are shrinking

While the universe of new gTLDs is growing at a rapid clip, DI research shows that at least one in 10 individual new gTLDs are shrinking.
Using zone file data, I’ve also established that almost a third of new gTLDs were smaller June 1 than they were 90 days earlier, and that more than one in five shrunk over a 12-month period.
There’s been a lot written recently, here and elsewhere, about the volume boom at the top-end of the new gTLD league tables, driven by the inexplicable hunger in China for worthless domain names, so I thought I’d try to balance it out by looking at those not benefiting from the budget land-grab madness.
It’s been about two and a half years since the first new gTLDs of the 2012 round were delegated. A few hundred were in general availability by the end of 2014.
These are the ones I chose to look at for this article.
Taking the full list of delegated 2012-round gTLDs, I first disregarded any dot-brands. For me, that’s any gTLD that has Specifications 9 or 13 in its ICANN Registry Agreement.
Volume is not a measure of success for dot-brands in general, where only the registry can own names, so we’re not interested in their growth rates.
Then I disregarded any gTLD that had a general availability date after March 14, 2015.
That date was selected because it’s 445 days before June 1, 2016 — enough time for a gTLD to go through its first renewal/deletion cycle.
There’s no point looking at TLDs less than a year old as they can only be growing.
This whittling process left me with 334 gTLDs.
Counting the domains in those gTLDs’ zone files, I found that:

• 96 (28.7%) were smaller June 1 than they were 30 days earlier.
• 104 (31.1%) were smaller June 1 than they were 90 days earlier.
• 76 (22.7%) were smaller June 1 than they were 366 days earlier.
• 35 (10.4%) were smaller on a monthly, quarterly and annual basis.

Zone files don’t include all registered domains, of course, but the proportion of those excluded tends to be broadly similar between gTLDs. Apples-to-apples comparisons are, I believe, fair.
And I think it’s fair to say that if a gTLD has gotten smaller over the previous month, quarter and year, that gTLD is “shrinking”.
There are the TLDs.
[table id=42 /]
Concerning those 35 shrinking gTLDs:

• The average size of the zones, as of June 1, was 17,299 domains.
• Combined, they accounted for 605,472 domains, down 34,412 on the year. That’s a small portion of the gTLD universe, which is currently over 20 million.
• The smallest was .wed, with 144 domains and annual shrinkage of 12. The largest was .网址 (Chinese for “.website”) which had 330,554 domains and annual shrinkage of 7,487.
• The mean shrinkage over the year was 983 domains per gTLD. Over the quarter it was 1,025. Over the month it was 400.

Sixteen of the 35 domains belong to Donuts, which is perhaps to be expected given that it has the largest stable and was the most aggressive early mover.
Of its first batch of seven domains to go to GA, way back in February 2014, only three — .guru, .singles, and .plumbing — are on our list of shrinkers.
A Donuts spokesperson told DI today that its overall number of registrations is on the increase and that “too much focus on individual TLDs doesn’t accurately indicate the overall health of the TLD program in general and of our portfolio specifically.”
He pointed out that Donuts has not pursued the domainer market with aggressive promotions, targeting instead small and medium businesses that are more likely to actually use their domains.
“As initial domainer investors shake out, you’re likely to see some degradation in the size of the zone,” he said.
He added that Donuts has seen second-year renewal rates of 72%, which were higher than the first year.
“That indicates that there’s more steadiness in the registration base today than there was when first-year renewals were due,” he said.

.shop pricing sunrise renewals at $1,000

If you’ve spent over $40 million on a gTLD, you need to make your money back somehow, right?
It’s emerged that GMO Registry, which paid ICANN a record $41.5 million for .shop back in January, plans to charge $1,000 renewal fees, wholesale, on domains registered during its upcoming sunrise period.
Trademark owners will seemingly have to pay over the odds for domains matching their trademarks, while regular registrants will have a much more manageable annual fee of $24.
The prices were disclosed in a blog post from the registrar OpenProvider last week, in which the company urged GMO to lower its prices.
Sunrise is due to start June 30, running for 60 days, so there’s still a chance prices could change before then.
It’s not the first registry to charge more for sunrise renewals than regular renewals.
Any company that bought a .sucks domain during sunrise was lumbered with a recurring $2,499 registry fee.
.green also had a $50 annual sunrise renewal premium before Afilias took over the gTLD in April.
Others have charged higher non-recurring sunrise fees. With .cars, the sunrise fee was $3,000, which was $1,000 more than the regular GA price.

China conference leads to 49% .vip spike

The Global Domain Industry Conference, held in China over the weekend, has led to a huge boost in .vip domain sales.
Registry Minds + Machines told the markets this morning that the recently launched gTLD hit 404,892 as of 1600 UTC yesterday, up 49% from Friday.
CEO Toby Hall confirmed to DI that China is very much behind the spike, and that the conference helped raise the profile of .vip.
Billings and orders have now hit $5.5 million, up from $3.2 million on May 22, M+M said. That number includes sunrise and premium sales.
At GDS, M+M sold eight .vip domains auction for a total of $232,000 before auction commissions, which very likely inspired the spike in base-fee registrations.
Photos of GDS published on social media yesterday show a packed auditorium, with hundreds of attendees.

what did they say on 2016 Global Domain Industry Summit? what did you care? find it : https://t.co/wTRKX1Fbxq pic.twitter.com/xQNMZNGUxl

— 西部数码 (@westdotcn) June 6, 2016

While M+M makes much of the fact that it has not used a “freenium” strategy for .vip — which it says may lead to better renewal rates than competitors — retail prices are still pretty damn cheap.
At West.cn, its leading Chinese registrar, a .vip can be had today for about $3. It’s closer to $10 at GoDaddy.
Today’s batch of zone files have not yet been published by ICANN for verification, but yesterday there were 245,872 names in .vip.

ICANN slaps first deadbeat dot-brand with breach notice

The world’s third-largest mobile phone company, worth some $14 billion a year, is the first new gTLD registry operator to refuse to pay ICANN fees.
That’s according to ICANN’s compliance department, which last night slapped Bharti Airtel with the new gTLD program’s first public contract breach notices.
The notices, which apply to .bharti and .airtel, claim that the Indian company has been ignoring demands to pay past due fees since February.
The ICANN quarterly fee for registries is $6,250. Given .airtel and .bharti were delegated 11 months ago, the company, which has assets of $33 billion, can’t owe any more than $37,500.
Bharti Airtel is, according to Wikipedia, the third largest mobile network operator in the world and the largest in India, with 325 million subscribers.
Yet ICANN also claims it has had terrible difficulty getting in touch with staff there, saying:

ICANN notes that Bharti Airtel exhibits a pattern of non-response to ICANN Contractual Compliance matters and, when responses are provided to ICANN, they are often untimely and incomplete.

The compliance notices show that ICANN has also communicated with Verisign, the registry back-end operator for both gTLDs, to try to get the matters resolved.
According to ICANN, the registry is also in breach of terms that require it to publish links to its Whois service, abuse contacts and DNSSEC practice statements on its web site.
The sites nic.airtel and nic.bharti don’t resolve (for me at least) with or without a www., but the Whois services at whois.nic.airtel and whois.nic.bharti appear to work.
These are the first two registries of any flavor emerging from the 2012 application round to receive public breach notices. Only one pre-2012 gTLD, .jobs, has the same honor.
ICANN has given Bharti Airtel 30 days from yesterday to come back into compliance or risk losing its Registry Agreements.
Given that both gTLDS are almost a year old and the nic. sites still don’t resolve, one wonders if the company will bother.

.xyz tops 5 million domains as penny deals continue

XYZ.com became the first new gTLD operator to top five million domains in a single TLD last night, when .xyz added almost 1.5 million names.
According to our parse of today’s zone file, .xyz has 5,096,589 names, up 1,451,763 on yesterday’s 3,644,826.
On Monday, the number was just under 2.8 million.
The massive spike came after what was supposed to be the final day of a three-day discounting blitz, as registrars sold the names for $0.02, $0.01 or even nothing.
Uniregistry, which sold for a penny, seems to have claimed the lion’s share of the regs.
The company supplied DI with data showing it had processed over 1.16 million registrations on June 2, about 90% of which CEO Frank Schilling said were .xyz sales.
At its peak, Uniregistry created 95,793 new domains in an hour, this data shows.
Judging by the numbers published on its home page, the registrar has pretty much doubled its domains under management overnight.
The rapid growth of .xyz is very probably not over.
Some registrars said they will carry on with the penny giveaways for an extra day.
At least one popular registrar, NameCheap, told irritated customers that the popularity of its $0.02 offer meant it had a backlog of registration requests that would take 12 to 24 hours to process. Those may not have showed up in the zone file yet.
In addition, .xyz prices are expected to be dirt cheap — just $0.18 at Uniregistry, for example — for the rest of the month, at least at the 50-odd registrars XYZ says are participating in its promotion.

Amazingly, .blockbuster will soon be a gTLD

Video rental chain Blockbuster may have gone the way of the the 8-track, the VCR, and the Nokia cell phone, but it will soon have a gTLD of its own.
The .blockbuster gTLD application completed its pre-delegation testing with ICANN this week and is now with IANA/Verisign, ready to go live on the internet in the coming week or so.
It’s a fairly straightforward dot-brand application, even though the brand itself is pretty much dead.
Blockbuster, which at its peak in 2004 had 9,000 rental stores in its chain, was rescued from its Netflix-induced bankruptcy by TV company Dish Network back in 2011.
Dish applied for .blockbuster in 2012 when the brand was still, if only barely, a going concern.
However, since that time all of its remaining Blockbuster stores have been closed down and the Blockbuster-branded streaming service has been renamed Sling.
The web site at blockbuster.com is a husk that hasn’t been updated since 2014.
And yet the brand will shortly be at the cutting edge of online branding by having its own new gTLD.
A dot-brand without a brand? Surely this will be among the most useless new gTLDs to hit the ‘net.

Donuts’ new 50% price hike explained

Donuts’ new pricing model for 10 of its new gTLDs, announced yesterday, has caused some confusion for registrants and will make life more complex for registrars.
The company said yesterday that from October it plans to raise its wholesale fee by 50% for new registrations in .camera, .camp, .cleaning, .dog, .glass, .kitchen, .plumbing, .shoes, .solar and .toys.
It’s a substantial increase for domains that typically retail for between $25 and $40, and Donuts has clearly got an eye on profitability rather than volume.
But, crucially, the increased fees will not apply to renewals of existing registrations.
This introduces an unfamiliar pricing paradigm to the domain name industry — the notion of variable renewal pricing for non-premium domains.
Let’s do an example, assuming the wholesale fee is currently $10 (it isn’t, but Donuts does not disclose its wholesale fees).
If you were to register example.dog today or before October 1, the wholesale renewal fee for that domain would be $10 for as long as you held that domain. In 20 years, you’d still be paying Donuts $10 a year in renewal fees.
But if you were to register the same domain name after October 1, you’d be paying Donuts $15 a year in renewal fees.
Donuts told DI last night that the only way an already-registered domain in one of the affected gTLDs would see an increased fee is if it deletes and is re-registered.
The current, lower, wholesale fee will continue to apply if you transfer your domain to a new registrar. It will even apply if you sell your domain to a new registrant, according to Donuts.
In practice, how much you actually pay depends on your registrar, of course.
Registrars may decide to have variable renewal fees at the retail level too or, probably more likely, they may apply a uniform renewal price. In the latter case, current .dog domains would be 50% more profitable than domains registered from October 1.
Under the hood, the new model introduces complexities for registrars, described to DI by one registrar as a “pain”.
They’ll need to update their systems to account for the varying rates and will need to pass data about renewal tiers between each other when domains are transferred.
If Donuts were to raise prices every two years, and applied the hike to more gTLDs, pretty soon there’ll be a lot of tiers to track.
But variable pricing is not completely unheard of, and is regulated to an extent by ICANN.
The standard Registry Agreement, which applies to all Donuts’ gTLDs, forbids registries from charging some registrants higher renewal fees than others.
But there are exceptions. If the registrant explicitly agrees to the renewal fee at the point of registration, it’s legit. Donuts and others already use this exception in order to charge higher prices for premium name renewals.
The purpose of that part of the contract “is to prohibit abusive and/or discriminatory Renewal Pricing practices”, preventing registries imposing higher fees on customers that are using domains very profitability, for example.