This is a guest post by Ray King the CEO of Top Level Design, a new domain registry behind the new gTLD’s .Design, .Wiki and .ink. Mr. King has also founded Semaphore, Inc, SnapNames, Inc, AboutUs, Inc. and ICANNWiki (501c3).
The post appears here unedited:
We at Top Level Design believe that .design had the most successful launch of any generic new TLD to date. Not only that, I think we are well on our way to proving that a new TLD can justify a premium cost when it offers better, more meaningful domains than the generic legacy options.
For some this may seem like a bold statement — so let me explain our enthusiasm: While there are many metrics to success, I’m looking at overall registry revenue. Our base wholesale pricing is $33; about 4x that of standard .com or .club name. But 450 .design names have sold at premium renewal rates ranging from $100 to $5,000 / year wholesale, so while we didn’t have the door-busting number of registrations that some others have had, our average annual revenue per name sold in General Availability is north of $60.
In my opinion all of the cheap and free domain names being given away effectively declare that new extensions are not as valuable as .com or .net. It is a perplexing strategy and not the way to topple .com. Creating volume for volume’s sake was never our goal. Our goal was success through quality registrations and websites in a meaningful and valued TLD.
We believe that the promise of the new TLD program was two fold: 1) shorter, better and brandable domain names, and 2) semantic meaning at the top level. Our .design domains mean something and that is valuable!
Our success was made possible by the interest in our premium names. We did not withhold one character domains. We had the fortuitous timing of a long-delayed ICANN process to have access to our 2 character domains, and we refrained from sitting on them, opting instead to release them immediately at launch. We have 5 premium tiers, and have seen good traction at all levels. These prices are user-friendly; most folks understand why Smith.design is a premium but AngelaSmith.design is available at the base tier.
We will all continue to debate about what makes a successful TLD but in my view it boils down to public esteem. Is the public willing to build a new site on your TLD or move rather than redirect? Are they not only willing to pay for the domain, but pay a premium? I think the way to win the public’s appreciation is straightforward: provide a meaningful TLD at a fair and reasonable price to encourage higher quality sites. Great sites then beget more great sites and you have a virtuous circle. And here’s why I really love .design — designers build great sites!
And speaking of designers building great sites, just days after the launch of .design there are already a bunch of live sites. Here is a list of 50 live .design sites.
don’t get too excited. its not like you’re going to keep up those numbers. like any new tld there are limited amount of ‘good’ domains. once they are gone, registrations slow to a crawl.
You can justify a premium price because you’re the one making the money there is no justification in the real world to a domain investor or to a business. no they cannot justify why to get a.com it will cost them eight or nine dollars a year and it will cost several times that for a.design you can spin it anyway you like.
And your extension is not the only extension that has semantic meaning, I mean that’s just absolutely ridiculous plenty of these extensions have semantic meaning.
Don’t get me wrong you should be enthusiastic just like dot work dot video and every other extension that has a semantic value. the whole key is how will the whole world get to know and understand your extension ? Initial launch is one thing, let’s see if three years down the road the momentum is still there for .design.
Hype, hype and more hype. The customer really have no choice but paying inflated prices for a so called “premium” . You might as well buy a .com.
Hype about how great designers are kind of misses the point that there are a lot of crap websites out there built by designers.
Mr King, it is important for you to change your pricing strategy in order to compete favorably with other new gtlds.
I think Ray is right that variable pricing names (as he and Donuts are doing) makes for a healthier more profitable registry.. and hey, it works. Real designers will pay $100 for SOMETHINGGOOD.Design and understand that it’s better than SOMETHINGAWFUL.DESIGN for $10
The problem I see is that .com sort of programmed consumers that domain name prices ought to be consistent and relatively low. That same .COM pricing model bred the arbitrageur or domainer who carries many dot coms and tries to sell singles in their portfolio against the renewal cost of the entire portfolio. Consumers at-large understand this dynamic now.
Launching a new registry, out of the gate with prices all over the map is a bit different because the silent sale force of domainers telling everyone the virtues of the space gets muted. The speculative euphoria leaves too. everyone (even end users) has a speculative instinct. As a registry operator, Uniregistry is a long-game player and we want volume. Nothing ever died of popularity.
If I had traditional investors, they would hate that far-sighted philosophy, but I feel like in the long run our namespaces will be more successful and rise to the top because of low fixed prices and predictable fixed cost renewals.
In certain spaces though, where the acquisition price of the extension was astonishingly large, variable pricing is going to have to be a reality. If we paidfor .LINK or .CLICK what Ray paid for .DESIGN, there would be “no way” we could offer those extensions at $5 or $10. Even “with” my far-sighted outlook.
I’m not too surprised to see negative new TLD comments given the general “.com is king” reality that some domainers so vociferously defend. I want to respond to each comment in turn, and also remind folks that this was just day 1 being analyzed. I haven’t claimed victory yet and we’re still a long way from where I want to take .design – but we will get there.
First, of course our registration numbers will taper after the day 1 rush. I wrote with the intention that followers of new TLDs analyze and compare TLD success and adoption with a variety of metrics. For some time this has not been an apples-apples world and so I offered my story and launch as a new model of TLD expansion.
Second, there is a justification for a premium price. Designers appreciate beautiful packaging and so CarlaSmith.design is more elegant than CarlaSmithDesign.com. Period. Folks are willing to pay more for a well-designed article of clothing and I believe they will for a domain name too. This is the same reason that good .com names sell for 6 and 7 figures. I never said that .design was the only new TLD with semantic meaning, but what readers may not realize is that the word “design” is the single most common word found in .com SLDs. It beats out other common words like “group,” “online,” and “shop.” So, I believe that the word “design” not only has semantic value but it has the data and usage behind it to make it an important and prevalent term, much more so than .work and .video, though they are fine extensions too.
Third, I’m accused of just pushing out hype. As the CEO of a new TLD registry that had a good opening day I’m excited to be our #1 hype man. Folks that want a cheap, long .com or another generic will continue to have that option. I look forward to working with designers that put a premium on their self-presentation, not people willing to settle for any name.
Fourth, JaneDoe says that designers aren’t all that and some of them also build bad sites. Okay. I still believe the meaning and price of a .design domain will beget a higher percentage of beautiful sites.
Fifth, I believe I can compete with our higher price and this open letter was my stake in the ground. As a businessman I appreciate that I may need to pivot at a future date but I remain both grounded and confident.
And finally, I want to thank my friend and colleague Frank Schilling for his response. I don’t believe we all will pave the same path to success, and I appreciate that your portfolio as of now is potentially best suited to fixed prices in line with the .com market. Of course I wish you all the success and am excited to learn and grow our businesses alongside one another. However, I wouldn’t say that I’m constrained to sell .design names at a higher price because we acquired it at auction for a sizable price. If I could maximize profits selling my names for a fraction the price, I would consider that. Would I sell 4x as many .design names if they were ¼ the price? I’m not convinced that is the case and I feel like my approach is justified against the market I’m serving. We have fun and interesting times ahead of us.
You said CarlaSmith.design is more elegant than CarlaSmithDesign.com. Period.
No it’s not so shove your period. You are charging more because it benefits you. Domain names are not cars there is a reason a Rolls Royce costs more than a Kia. With domain names that doesn’t apply. Hucksters trying to get more money for their domains because they had to pay ICANN a lot for the right to manufacture their product. Shilling is right you are wrong Period.
Rob, thanks and fyi FirstLast.design combinations are not generally premium so a name like CarlaSmith.design would be the normal $33 wholesale.
Thanks Ray
As you say, Domains Under Management as a measure of success is no longer relevant, since volume can be built relatively quickly with low or free price, and it is not a measure of usage, quality nor profitability of the TLD. I brought this up in June of last year on my blog http://architelos.com/does-gtld-registration-volume-measure-success/
“….More importantly, it’s not volume that is important, it is your back-to-basic business fundamentals. For example, are you:
1- generating a respectable and sustainable gross margin? After all, what good it is if you are generating volume at loss?
2- building a repeatable base of business? Yes giving away domains helps bolster volume, but how many of those registrations will renew? How many of those will have good content (by good content I mean, content that is not a parked page or a redirect?) How many will have email addresses that are used. Think of email addresses that are consistently used by registrants of the new gTLD, as a free viral awareness campaign. The more that email address with the new TLD to the right if the dot is out there, the more free awareness the new gTLD gets.
– enabling a healthy ROI? After all, for many new entrants a new gTLD is a new business that represents a significant investment of resources, both upfront and on-going. Is the business set up to return a healthy return on investment (at least higher than ROIs for other alternatives?)
4- attracting and maintaining the target registrants? Free domain registrations tend to result not only in a spike of registration volumes, but also in a jumble of registrations representing a mishmash of segments. Many of these registrants will not even recall they have a registration a year from now.
When the time to renew approaches, the registrant will see no reason to now pay for something they have had for free and never used. Some of the registrants will be domainers whose interest in the new gTLD is monetization and not use. And sadly many registrations are likely to be by bad actors who see virgin territory and a low barrier to entry for abuses such as spam.”