A week ago, Calzone shared some information about the sunrise registration numbers for new gTLD registries. In the report, Calzone shared that “by any measure, the rolling average of 115 Sunrise domains per TLD falls far short of what many new Registries included in their revenue forecasts.”
Although it might be obvious to many people, I want to share why I believe this may make things more challenging for the new gTLD registries and how this may change things a bit. I certainly don’t believe these numbers are predictive of doom for the registries, but this adds a level of difficulty to break even and reach profitability.
I believe sunrise registrations serve two important purposes for the new gTLD registries.
1) The sunrise registrations offer a strong revenue boost just before launch. Whether the brands and trademark owners who purchase their domain names intend to use them or not, the registry will have revenue on the books even before the domain names are available to the general public. This revenue will give the registry additional capital to spend on advertising and marketing, and it will make it easier to pay for ongoing expenses.
2) When companies reserve their trademarks and/or brand names during the sunrise period, they are likely to continue to protect their brands by annually renewing these domain names. If they are willing to spend the money during sunrise periods, they would most likely continue to renew the domain names in the future. Perhaps these registrations have a longer renewal tail than other domain registrations in the registry revenue projection models, meaning more income projected.
In addition to throwing off revenue projections, these initial numbers could potentially impact private auctions, private settlements, and auctions of last resort for the management of gTLD extensions that have more than one applicant. By getting insight about the sunrise numbers, perhaps some applicants would be more interested in folding now, knowing that their projections may not be reliable indicators of their profitability, and perhaps they could make more profit now by losing an auction.
I believe most of the new gTLD registries are in this for the long haul. They know adoption won’t be quick, and they aren’t expecting to reach profitability quickly. It will be interesting to see how sunrise numbers impact pricing, and it will also be interesting to see how things change as other extensions are introduced and other registries begin marketing their domain names.
When it comes to the new domain name extensions, I am primarily an observer, and I find this information to be fascinating. I am excited to read some of these articles in 5-10 years to see how things resolved themselves.