Priced to sell: $46m of two-letter .xxx names

ICM Registry has added over 1,200 two-character .xxx names to its catalog of priced premiums.
With prices ranging from $100,000 to $37,500, the newly offered domains carry a total ticket price of over $46 million.
The only six-figure name on the list is vr.xxx. ICM said in a press release today it has already sold vr.porn and vr.sex for $100,000 apiece.
There are seven names with adult connotations (such as 69.xxx and bj.xxx) priced at $75,000, eight more at $50,000 and two at $40,000.
The rest of the list of 1,227 names are being offered at $37,500, which is roughly 10 times the prices on the equivalent .porn, .sex and .adult domains.
While ICM noted the interest in domain investing from China recently, it does not appear to have valued its numeric-only domains (such as 88.xxx) any more highly than less attractive-looking combinations (such as 0o.xxx).
Judging by the list published on ICM’s web site, it has already sold well over 300 two-character domains in its newest three gTLDs.
Had those sold at the buy-now prices it would have raised over $1.1 million in revenue.
But ICM since September has been offering an option to register premium names for premium annual fees that are lower than the one-off price. A $37,500 domain costs $3,000 a year to register, under this model.
The total value of ICM’s premium list, including all the longer domains, is roughly $115 million.

Third ICM windfall due as .sex hits sunrise

If we’ve learned one thing about new gTLD sunrise periods, it’s that adult-oriented TLDs sell quite well.
ICM Registry started its third such period yesterday, as .sex went into its “TMCH Sunrise” phase.
Until October 1, any company with a trademark in the Trademark Clearinghouse will be able to buy a matching .sex domain on a first-come, first-served basis.
From October 5 to October 30, anyone with a .xxx domain name or current .xxx “Sunrise B” block will be able to buy the matching .sex during the Domain Matching phase.
Anyone who buys a .xxx before October 1 will be able to participate in this second sunrise.
ICM reported in May that .porn received 3,995 sunrise registrations while .adult sold 3,902 — both via a combination of TMCH Sunrise sales and blocks.
At ICM’s prices, that’s enough to comfortably cover its ICANN application fees.
Every other new gTLD with the exception of .sucks has sold fewer than 1,000 sunrise names.
General availability for .sex starts November 4.

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

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.

ICM will NOT offer free .porn names to .xxx buyers

ICM Registry has reneged on its promise to “grandfather” trademark owners and other .xxx registrants in its forthcoming .sex, .porn and .adult new gTLDs.
While the changes are sure to infuriate trademark owners and .xxx registrants, the company insists that ICANN is to blame for blocking its original plans.
Originally, ICM had promised to reserve every .sex, .porn and .adult domain that matched an existing .xxx domain — if you owned or had blocked example.xxx then example.porn and so on would be reserved.
There was not to be a charge for any of these reservations.
The current versions of ICM’s new gTLD applications are unequivocal — nobody who owns a .xxx name or bought a block will be charged for the equivalent .sex, .porn or .adult names or blocks.
On names “blocked” by trademark owners during the .xxx Sunrise B period, the applications state:

All existing blocked names under the .XXX Sunrise B program… will not need to take any action to have those same names blocked in the new gTLD. All of these matching names will be automatically reserved from registration in the new TLD, free of charge.

On names registered in general availability, the applications state:

all existing .XXX names will be reserved from registration in the new gTLD and only registrants of that .XXX name will be given the opportunity to initially register that corresponding .XXX name in the new gTLD. If the .XXX registrant elects to register the name in the new gTLD, this can be done for a low annual fee. If the .XXX registrant does not elect to register the name in the new gTLD, then the new, matching, gTLD name will be reserved on [ICM’s] registry-reserved list at NO cost.

While neither application has been amended yet, neither of these statements are any longer true, ICM has confirmed.
Instead, the company’s new Domain Matching Program anticipates an extra launch phase between Sunrise and general availability. Under ICANN rules, it’s a Limited Registration Period.
During this month-long phase, anyone who owns a .xxx domain or block will be able to purchase the matching new gTLD names, unless it has already been registered in the Sunrise period.
What does this all mean…
For regular .xxx registrants?
If you own a .xxx domain, you no longer get a free permanent reservation on the matching .porn, .sex and .adult names while you make up your mind whether to buy them.
Instead, you’ll have to buy it during the 30-day DMP window.
ICM’s fee for DMP and Sunrise will be the same as for general availability, ICM CEO Stuart Lawley told DI.
Also, if there’s a trademark in the Trademark Clearinghouse that matches your second-level string, that trademark’s owner will be able to register the matching names before you get a chance.
Remember, not all TMCH users are legitimate brands. Some are domain investors gaming the system.
For premium .xxx buyers?
The changes may also concern registrants of “premium” .xxx names, many of which may have assumed they’d get the matching .porn, .sex and .adult reservations free of charge.
Porn site operators Really Useful and Barron Innovations, which have spent millions apiece on premium .xxx names such as teen.xxx and sex.xxx, have both said in ICM press releases that the grandfathering program formed an important part of their decision-making.
“We look forward to enjoying the benefits of ICM’s unique Domain Matching Program, which gives .XXX holders an opportunity to secure matching .XXX domain names in .PORN, .ADULT and .SEX,” Barron spokesperson Shay Efron said when the $3 million sale of sex.xxx was announced.
“We will be speaking individually to each premium name holder who purchased premium names after we had announced the original grandfathering plan,” Lawley told us.
It seems that the premium string will be registry-reserved, however, so there’s no chance of them being snapped up during Sunrise.
For brands?
If you’re a brand who bought a .xxx block during the Sunrise B period back in 2011, you no longer get grandfathered into a free permanent reservation in .sex, .adult and .porn.
Instead, you’ll have to buy your names as usual either during Sunrise, DMP or — if you feel like taking a risk — general availability.
The problem is: you only qualify for Sunrise if you’re registered in the TMCH, and most Sunrise B buyers are not.
Something like 70,000 names were registered during the .xxx Sunrise B period three years ago, but there are only 33,000 marks registered in the TMCH today.
The owners of more than half of the Sunrise B blocks, who may have thought their blocks would carry over to ICM’s three new gTLDs free of charge, currently do not even have the right to buy their names in Sunrise.
If you have a .xxx Sunrise B block AND are in the TMCH, you may find yourself competing with other trademark owners with matching marks during the .porn, .adult and .sex Sunrise periods.
Any Sunrise B match not registered during the Sunrise and DMP phases will be up for grabs during GA, just the same as any other domain.
Lawley reminds us that the .xxx Sunrise B predated ICM’s new gTLD applications by many months — nobody bought a block in 2011 thinking it would be enforced in all four gTLDs.
He added that ICM has “recently secured a unique offer through the TMCH that will enable trademark owners to register with the TMCH for one year, at a reduced fee.”
Why did ICM make the changes?
The changes put the registry on a collision course with the Intellectual Property Constituency of ICANN, which looks out for the interests of trademark owners and is not a fan of porn-themed TLDs.
“The IPC is going to collectively shit a brick,” one IPC member told us.
But the IPC, which has been unshakable when it comes to the strict enforcement of ICANN’s mandatory new gTLD rights protection mechanisms, may have shot itself in the foot to an extent.
According to ICM, it’s ICANN’s fault, and indirectly the IPC’s, that it’s had to abandon free grandfathering.
In a statement sent to DI, the company said:

Throughout the ICANN approval process, ICM pursued multiple pathways to try and ensure its original “grandfathering plan”. However, due to technological concerns and strong trademark protection policies that ICANN’s intellectual property community requires in all new gTLDs, ICANN flatly rejected ICM’s grandfathering plan.

The mandatory new gTLD rights protection mechanisms enforced by ICANN means that no domain names may be set aside before trademark owners have had a crack at the Sunrise period, ICM said:

Those rights protections require that TMCH-validated Sunrise Holders get the first priority for names in any new gTLD and also contain certain prohibitions on all registries from earmarking domain names for third parties.

However, ICM has still managed to set aside an unknown number of names as part of its Premium Domains Program — those names will be immune from registration during both Sunrise and the DMP.
It’s also going to reserve, free of charge, a bunch of “culturally sensitive” names — these are strings that members of the ICANN Governmental Advisory Committee asked to be reserved in .xxx.
Names related to child abuse material will also be registry-reserved at no cost to the child protection agencies that requested the blocks when .xxx launched.
Plenty of stuff is getting reserved, just not Sunrise B blocks.
ICANN’s rules against “earmarking” domains may have prevented ICM offering matching domains to regular .xxx registrants, but it’s hard to see how that would prevent a .xxx block carrying over to .porn. Blocks are not assigned to a specific registrant; they belong to the registry.
The .adult and .porn gTLDs are set to start their 30-day Sunrise periods March 1, 2015. The 30-day DMP for both will begin April 15.
The .sex gTLD was contested, so it’s running a little behind. ICM expects to launch it later in 2015.

ICM buys .sex for up to $3 million

ICM Registry, the .xxx domain name registry, may have paid as much as $3 million for the .sex gTLD.
Internet Marketing Solutions Limited, the only other applicant for .sex, withdrew its application this week.
Word is that ICM forked out somewhere between $2 million and $3 million for exclusive rights to the string.
I hear it was a private deal, not an auction organized by a third party.
I wonder whether the price was affected by the revelation by ICANN earlier this month that it considers porn-related gTLD strings “sensitive” for no particular reason.
It’s quite low, considering that sex.com sold for $13 million and sex.xxx sold for $3 million just a couple of months ago.
ICM now is the only applicant for .sex, .porn and .adult. It plans to grandfather existing .xxx registrants into the new namespaces, assuming ICANN doesn’t throw a spanner in the works.

ICANN puts porn gTLDs on hold for no good reason?

In a decision that seems to have come out of nowhere, ICANN has effectively put bids for three porn-themed new gTLDs on hold.
In a June 21 meeting, the board’s New gTLD Program Committee discussed .adult, .sex and .porn, calling them “sensitive strings”.
While it passed no resolution, I understand that ICANN legal staff is delaying the signing of contracts for at least one of these gTLDs while the NGPC carries out its talks.
It’s a surprising development, given that the three strings are not subject to any Governmental Advisory Committee advice, are not “Community” applications, and have not been formally objected to by anyone.
The report from the NGPC meeting acknowledges the lack of a GAC basis for giving the strings special treatment (emphasis added):

The Committee engaged in a discussion concerning applications for several adult-oriented strings in the current round of the New gTLD Program, including .ADULT, .PORN, and .SEX. The applications propose to serve the same sector as the .XXX sponsored TLD. Staff noted that the applications were not the subject of GAC advice, or any special safeguards, other the safeguards that are applicable to all new gTLDs. The Committee considered how the safeguards in the new gTLD Program compare to the safeguards that were included in the .XXX Registry Agreement. The Committee requested staff prepare additional briefing materials, and agreed to discuss the matter further at a subsequent meeting.

This begs the question: why is ICANN giving .porn et al special treatment?
What’s the basis for suggesting that these three strings should be subject to the same safeguards that were applied to .xxx, which was approved under the 2003 sponsored gTLD round?
.porn, .sex and .adult were were applied for under the 2012 new gTLD program, which has an expectation of predictability and uniformity of treatment as one of its founding principles.
Who decided that .sex is “sensitive” while .sexy is not? On what basis?
Is it because, as the NGPC report suggests, that the three proposed gTLDs “serve the same sector” as .xxx?
That wouldn’t make any sense either.
Doesn’t .vacations, a contracted 2012-round gTLD, serve the same sector as .travel, a 2003-round sponsored gTLD? Why wasn’t .vacations subject to additional oversight?
Is it rather the case that the NGPC is concerned that ICM Registry, operator of .xxx, has applied for these three porn strings and proposes to grandfather existing .xxx registrants?
That also wouldn’t make any sense.
.sex has also been applied for by Internet Marketing Solutions, a company with no connection to .xxx or to the 2003 sponsored gTLD round. Why should this company’s application be subject to additional oversight?
And why didn’t .career, which “serves the same sector” as the sponsored-round gTLD .jobs and was applied for by the same guys who run .jobs, get this additional scrutiny before it signed its contract?
It all looks worryingly arbitrary to me.

Uniregistry is too .sexy for new gTLD objection

.SX Registry has asked for its formal objection to Uniregistry’s .sexy gTLD application to be withdrawn, we understand.
It’s believed to be among the four objections, according to ICANN, that have been dismissed by the dispute resolution providers following withdrawal requests from the objectors.
The ccTLD registry had filed String Confusion Objections to .sexy and to one of the two applications for .sex. The .sex objection appears to be still pending.
While there’s an interesting decision to be had in the .sex case — how audibly similar are “sex” and “ess-sex”? — I’m not sure the same could be said for the extra-syllabled .sexy.
Resolution providers are currently in the process of picking panelists for all new gTLD objections, so decisions are not expected for months.
Note: this is the second and last time DI will use a Right Said Fred allusion in a headline related to .sexy. We reserve the right to mock others who use similar headlines in future.

gTLD Objector says .sex, .gay, .wtf are all okay

The Independent Objector for ICANN’s new gTLD program has given a preliminary nod to applications for .sex, .gay, .wtf and six other potentially “controversial” applied-for strings.
Alain Pellet this week told applicants for these gTLDs that he does not expect to file objections against their bids, despite an outpouring of public comments against them.
The strings given the okay are .adult, .gay, .hot, .lgbt, persiangulf, .porn .sex .sexy, and .wtf.
A total of 15 applications have been submitted for these strings. Some, such as .gay with four applicants, are contested. Others, such as .wtf and .porn, are not.
The IO is limited to filing objections on two rather tightly controlled grounds: Limited Public Interest (where the bid would violate international law) and Community (where a community would be disenfranchised).
For each of the nine strings, Pellet has decided that neither type of objection is warranted.
In his preliminary finding on .gay and .lgbt, he also noted that to file an objection “could be held incompatible with the obligation of States not to discriminate on grounds of sexual orientation or gender identity which is emerging as a norm”.
As part of a lengthy analysis of the international legal position on homosexuality, De Pellet wrote:

even though the IO acknowledges that homosexuality can be perceived as immoral in some States, there is no legal norm that would transcribe such a value judgment at the international level. Thus, the position of certain communities on the issue is not relevant in respect to the IO’s possibility to object to an application on the limited public interest ground.

For the porn-related applications, Pellet noted that any bid for a gTLD promoting child abuse material would certainly be objected to, but that ICANN has received no such application.
On .wtf, which received many public comments because it’s an acronym including profanity, Pellet observed that freedom of expression is sacred under international law.
He regarded the problem of excessive defensive registrations — as raised by the Australian government in the recent wave of Governmental Advisory Committee early warnings — is outside his remit.
Pellet’s findings, which I think will be welcomed by most parts of the ICANN community, are not unexpected.
Limited Public Interest Objection, originally known as the Morality and Public Order Objection, had been put forward in the wake of the approval of .xxx in 2010 as a way for governments to bring their national laws to bear on the DNS.
But it was painstakingly defanged by the Generic Names Supporting Organization in order to make it almost impossible for it to be used as a way to curb civil rights.
The GAC instead shifted its efforts to the GAC Advice on New gTLDs objection, which enables individual governments to submit objections vicariously based on their own national interest.
Pellet’s findings — which are preliminary but seem very unlikely to be reversed — can be read in full on his web site.

Iran warns on 29 new gTLD bids

The Iranian government has filed late Early Warnings against 29 new gTLD applications, mostly on the basis that the applied-for strings are un-Islamic and “unethical”.
Bids for .gay, .sex, .wine, .bet, .poker and others relating to sexuality, alcohol and gambling are “in conflict with ethical standards” in Iran, according to the submissions.
We hear that the 29 warnings were filed with ICANN’s Governmental Advisory Committee December 10, well after the November 20 deadline that most other governments on the GAC stuck to.
We understand that problems obtaining visas for ICANN’s meeting in Toronto this October may have been blamed for the delay.
The initial batch of Early Warnings for the most part overlooked “moral” problems with gTLD strings, focusing far more on consumer protection, defensive registration costs and geographic sensitivities.
Not so with the Islamic Republic of Iran, which is much more concerned about words it believes promote anti-Islamic behavior or represent Islamic concepts without the required community support.
The government says in its opposition to .gay, for example, that the gTLD would be responsible for:

Agitation and irritation of the humanity and faith; and spread of hatred and hostility in the society.
Encourage people to perform non-religious, Unethical and Non-rational actions in the society.
Encourage people on doing unlawful actions according to Islam religion in the society.
Getting away society from healthy environment for doing daily activities.

Several other Early Warnings use the same or similar language. Iran suggests that the applicants could remedy the problem by banning registration in Islamic nations.
Not all of its warnings are related to sex, drink and gambling, however.
It’s also objected to .krd, which has been applied for to represent the Kurdish community in the region, saying it could “raise serious political conflicts” and lacks support.
The .eco applicants have also been hit with warnings on the grounds that ECO is an acronym for the Economic Cooperation Organization, a regional intergovernmental organization focused on trade.
ECO meets the criteria for IGOs to register .int domains, according to Iran, which is the GAC’s current proposed method of creating a list of protected second-level domain names for IGOs.
The full list of Iran’s objections is published here.

.sx denies .sex gTLD objection rumor

The CEO of SX Registry has denied rumors that the company already plans to object to the two .sex new gTLD applications, but has not yet ruled out such a move.
The company runs Sint Maarten’s new ccTLD, .sx, and gossip at the ICANN meeting in Prague last month suggested that an objection or two against .sex might be made on confusing similarity grounds.
The rumors were fueled in part by SX Registry’s sexy launch marketing.
But in a recent email to DI, Normand Fortier wrote:

At this time SX Registry is still reviewing the impact of various gTLD applications and contrary to some published rumors, has not taken any official position or decision regarding a future course of action.

Existing ccTLD operators are allowed to file String Confusion Objections against gTLD applications, if they feel there’s a risk of confusion if the gTLD is approved.
And .sx/.sex is far from a unique case.
In fact, of the 375 applications for three-letter gTLDs in the first round, 304 have only one character variance with one or more existing ccTLDs, according to DI PRO’s string similarity analysis.
ICANN’s Sword algorithm, which compares the visual similarity of strings, gives .sex a score of 57% against .sx.
I’ve checked every three-character gTLD application against every existing ccTLD and found dozens of proposed gTLDs with much higher similarity scores when compared to ccTLD strings.
The full results are available to DI PRO subscribers over here.