If you play poker or watch it on TV, your probably family with the term of a “Tell”. If your not, this is basically something you do, a motion, a habit, something you say or do, that gives away what kind of hand you have.
Its called a “tell”.
Demand Media had some very interesting comments to ICANN regarding the new gTLD extensions.
“We cannot see the benefits of limiting cross ownership of registries and registrars.”
Demand Media (Demand) owns enom.com a registrar and seems to want to own 1 or more new gTLD registries.
Demand is also not happy with the current proposal that registries have to give 6 months notice before raising their registration rates:
“We do not think its serves the interest of stability if registries are locked into unprofitable pricing decisions”
Demand uses the example of .cool. Let’s say you buy a .cool extension at $5 a year and when it comes up for renewal, if the registry wanted to charge you $100 a year (their numbers, not ours), its perfectly fine with Demand.
Demand basically says they are “willing to accept” a six month notification period before making such a move on renewals or transfers, but does not want any notice requirements on on new registrations. So if you register me.cool for $5 on day one, then on day 2 the registry wants to raise their prices, Demand thinks the registry should be able to charge $100 for my.cool.
Translation-Demand is going to go for a new extension, or several of them, and doesn’t want have major price constraints on them operating as a registry even though it is also a registrar. Demand is willing to agree to a six month notification period on renewals before raising the prices, but is unwilling to place any price cap on price it charge for domains renewals and wants to be able to change the pricing of any unregistered, but reserved domain, at any time, to any amount.
How do they justify charging a $5 registration for let’s say my.cool then asking for $100 renewal fee (as long as they give you 6 months notice) because if you don’t like it you can go and register my.reallycool (assuming their is such as like extension and under the guidebooks it would be highly questionable if .cool and .reallycool both would be approved) and save the $95 extra renewal fee.
Demand’s Argument, basically trust us, the market place will determine what a reasonable renewal fee should be and if we charge too much people will give up their domain and all the goodwill behind it and register some other domain at a lower fee.
However, I know what Demand already knows, domains are not like other “products”.
Demand argument is if you sell Dove Soap and change your price to $20 for a bar of soap, people will say “the hell with that” and buy Dial Soap for $2 bucks a bar, there by insuring that Dove will not raise their prices above market value.
That pricing strategy maybe true for bars of soap, but domains are not soap.
And Demand knows better.
They know that domains are the Internet presence for businesses and individuals and represent much more than a normal product, including goodwill, advertising, pre-printed material and a tremendous investment by the owner.
Of course the registry of .reallycool, if you buy Demands argument, can also raise the renewal fees of your .reallycool domain, on six months notice by 20x or more, leaving you with the choice of going I guess with an extension like .notcool the next time.
The “switching cost” from Dove to Dial is next to nothing. However, the switching cost from my.cool to my.reallycool could be extremely costly: lost customers from bookmarks/email, lost links, reprinting marketing materials, possible website redesign/reprogramming, etc etc.
What’s to say that renewals won’t be based on perceived switching costs rather than perceived market value?
Perfect example of how variable pricing will create stability issues on the Internet. This is just one example.
Terrell and Andrew
Exactly
Seeing the self-serving comments wasn’t too surprising.
New gTLD advocates fail to provide any show of support from end-users — the only people who posted in favour of new gTLDs is those who want to run them! Thus, things like price caps are opposed by them because it would hurt their bottom line.
Hopefully the DOC/NTIA/DOJ step-in and put an end to this soap opera.
George
The comments were not surprising but disturbing.
The most problematic for me is their line of reasoning that a registry may underprice their domain fees and thereforelose money.
Demand wants to be in a position where they can correct their underpricing mistake by taking it out in the registrants by being able to increase the renewal fees, in their own example, by 20x from the previous year.
I say if you underprice your service and lose money that’s your fault and if someone has to lose in the deal its the registry, not the innocent registrant.
Their comments this time weren’t nearly as bad as last:
http://domainnamewire.com/2008/12/19/demand-media-wants-to-introduce-new-domain-names/
When you insinuate that ICANN or affiliated registries can’t be trusted, they retort with “paranoia makers” and “conspiracy theorists”.
But one would have to be very gullible to rely on ICANN or any registry’s “good will”. How stupid is that? Various registries are salivating at the chance to implement tiered-pricing determined at their sole discretion. They’re just waiting on Mother ICANN to hand them a sword and the thumbs up sign.
Anyone who thinks they would not be exploited is incredibly misguided. Otherwise, ICANN & registries would simply adopt contract language that recognizes stakeholders right to pricing limits and safeguards. It’s simple and straightforward. But they want to reserve the right to screw and gouge vested businesses who have come to rely on their domain name as a universal storefront.
Sometimes it’s what they are NOT saying that SAYS IT ALL. If ICANN and registries really valued customers, and operated with core business ethics, then they would get out front and appease the concerns of their customers with clear statements of commitment. Clear statements.
But you don’t get that from any of them. And that should tell you exactly what you need to know!
Someone said on CNBC the other day that the present economic meltdown was because of unchecked greed, without any accountability.
Aren’t we seeing this with Icann and the registries lining up for the new gtlds?
Mike,
Thank you for bringing Demand’s comments to light.
Demand discovered they can charge what the market will bare (year after year) for .tv.
And, people/businesses will pay it, not realizing they are only a share cropper who are at the mercy of the property owner (.tv registry).
Remember, a new domain is the same as printing money without any significant cost.
Obviously, Demand wants more tlds to control.
At least, Demand is upfront with their intentions.
We all know Icann (not for profit organization) will say they are trying to protect the integrity of the internet.
But, it appears they are really only trying to profit while injuring the majority of the internet stakeholders.
Domainer
I know ICANN is a non-profit by charter and I know they say they are not out to make money, but there actions all seem to indicate otherwise, including their losing $4.6 million in excess funds in the stock market:
http://www.thedomains.com/2009/02/03/icann-losses-46-million-of-your-money-in-the-stock-market/
If they wanted to follow their charter and do what is best for the stability of the internet without regard to revenue, then they would slowly roll out new extensions instead of rushing hundreds or thousands out and as I suggested in my comments, award contested extensions to the company willing to serve as the registry for the lowest cost to the consumer rather than the company willing to pay ICANN the most.
In one of the comments in the story Mike linked to, he mentions that he has 75,000 domain names. To put things in concrete terms, if ICANN was doing its job properly so that .com fees were $2/yr per domain instead of $7/yr (which would likely be the case if the dot-com contract was tendered), that’s a savings of $375,000/yr.
Or, even more concretely, that’s 10 solid middle-income “new economy” jobs that Mike could be creating to help the unemployed, especially in this tough recession.
I think if more folks realized that the “ICANN taxes” due to their incompetence and mismanagement translate directly into reduced investment and greater unemployment, then the arguments might resonate to a larger audience. With 100 million domain names being overcharged by say $5/yr, that’s $500 million/yr in aggregate that individuals and businesses could be using to invest and create productive jobs.
Sounds like registrars and registries want to charge variable pricing based on how the registrant uses the domain name.
ICANN needs to represent the consumer and the registry/registrar insiders who are pulling the strings need to be shut down. The back room agreements between registrars is criminal, and everyone in the industry knows about it.
This throws light on another important reason to stick with .coms; namely that, due to there already being many 1,000’s of major companies using .coms throughout their enterprises, any attempt by Verisign (or any future operator of the .com registry) or ICANN to significantly raise renewal rates for existing .com domains would quickly find themselves buried in up to 100’s of lawsuits from these deeply entrenched .com stakeholders…to say nothing about what the US congress would do as a result of these same companies shouting at them to “do something!” to stop any such unfounded draconian price increases.
Such would not be the case with these new TLDs.
I read your blog for a long time and must tell you that your articles always prove to be of a high value and quality for readers.
Poker
Thanks
It is impossible for me to read your article–which may have some valuable content–because your introduction is so poorly written. Please, invest in an editor.
If you cannot get the gist out of the article, because it does not meet your editorial standards, then maybe you need to invest in a high school education. Secondly this is a domaining blog, domainers usually much more adept at reading anything and getting the message. Get a life.
Cheers to you Michael for even allowing her ridiculous comment.
Lisa,
I’m sure the present editor will refund your subscription cost.