Based on what I have read and heard, it seems like operators of the new domain name extensions can basically charge whatever they want for their domain names. I think most people assumed that the market would help dictate the price, but as one can see by observing the Uniregistry pricing changes, a registry can seemingly charge whatever it wants for its domain names.
I think this is problematic and could doom the new gTLD program. There is a risk that a company could build a website on a new domain name extension and in a matter of years, the registry could theoretically charge whatever it wants for a renewal. A small business, who likely chose a new domain extension in lieu of spending extra money on a previously registered .com domain name, would then have to deal with the same issue of an expensive domain name.
Several operators of the new domain names tried to assuage the concerns of customers by stating various forms of “we have no plans to increase pricing.” You can see comments from representatives of Rightside, Donuts, Radix, and .Club. I know many of these people, and I believe they are all well intentioned and truly do not have plans to increase prices. Likewise, I don’t think Frank Schilling from Uniregistry thought the prices would increase by so much just a few years ago.
Unfortunately, the price increase from Uniregistry shows registrants and even domain registrars that the prices may increase by whatever the registry determines is necessary for the health of the registry. While this may make a solid internal business case for registry operators, it adds uncertainty to domain registrants who could bear the burden of such a price increase.
As I said before, I do not believe many registries have plans to follow suit and raise their pricing by exorbitant amounts of money. As we have seen from their statements though, nobody can promise that the prices won’t ever increase significantly in the long-term. If the model of high prices is more economically feasible in the long term, we could see other companies pivot to this model. I don’t think anyone has plans to make this shift, but the economics might dictate it in the future.
From what I understand, consumers who own domain names in the new extensions don’t seem to be protected from price increases of any amount. As much as I think there are good uses for the new domain names, it would be difficult for me to recommend one to a friend or associate knowing that future prices aren’t certain. I don’t blame Frank Schilling for making a business decision, but it highlights the uncertainty with owning the new domain names.