On Wednesday ICM Registry the company that operates the .XXX registry put up for sale over 1,000 premium registry owned domains, with prices ranging from $330 to $220,000 and a total value of $7.7 Million.
For those who don’t know my company Worldwide Media, Inc, purchased a few .XXX domains in the Founders Program although with Frank Schilling’s Name Administration.
In addition to the Founders Domains, we got a couple of hundred more .XXX domains in Land Rush, Sunrise (matching domains in other extensions) and some in General Availability so we own around 250 in all.
In its announcement ICM said that they had already sold over $5 Million dollars in premium domains, that amount includes those purchased during the Founders Program including my purchases and Frank’s reported $1.6 Million in purchases.
The registry went live in early December 2011 and therefore is going to be coming up to its first anniversary.
I think the move is poorly timed.
For one, it will send a signal to many that the registry believes the domains have the highest value at this point they will ever have by attempting to sell that much inventory at one time.
Its not a message of confidence in my opinion and should not have been done before the 1st renewal period or even the second.
Nothing wrong with putting up a select number of reserved domains pre-priced 100 sounds like a reasonable number, but 1,000 domains is hugely excessive.
By putting up over 1,000 of the best possible reserved domains, at fixed pricing all to an accumulative total of $7.7 Million, this move caps the value of all .XXX domains.
If the registry values its own inventory of premium domains at a maximum of $7.7 million, then the handful of domains acquired previously for over 5 million, just got devalued.
Its my money that made up part of the $5 Million so its give me no joy to report in my view that my .XXX investment is devalued.
But I have to call it like I see it.
There is no doubt that I or any other domain investors will have a much harder time of selling our inventory of .XXX domain names, when the registry is completing against us by placing so many premium domains on the market, price fixed at one time.
Especially since there isn’t as far as I can tell any secondary market for .XXX domains.
I have yet to see a .XXX domain name resold in the secondary market.
Not on Sedo.com, not on Afternic.com and not in my portfolio.
Not only haven’t I seen sales in the secondary market, but speaking for my own portfolio I haven’t even gotten a significant amount of inquiries in the year period. I would call it less than 10 inquiries of any .XXX domain.
So basically ICM is selling into a dead market.
I believe no registry has ever made such a move putting up so many premium domains for sale priced fixed at one time.
Its unprecedented.
The only thing that comes close to the move by ICM is when Verisign the operator of the .TV extension, which had been offering domains on a annual recurring premium fee, put up thousands of registry owned domains one night for a one time fixed purchase price.
However the .TV extension had at that point been in existence for many years and had already made a market for itself with a healthy resale market as well.
.XXX is brand new not even a year old, a whole different ball game.
Which brings me back to the .TV release.
Those who participated in that .TV release will tell you that a HUGE amount of inventory was snatched up in the first 24 hours.
As far as I can tell no domains have been sold so far since the .XXX release.
I could be wrong, but from what I can eye ball from the ICM’s site, I don’t see any inventory coming off the site.
In my opinion, like at the poker table, ICM is going all in with this move.
Unless ICM generates significant sales in terms of volume and dollars from their premium list, there move to put all these premium domains up for sale is going to be horrible for the domainer resale market, maybe for years to come.
Maybe forever.
RegistrarStats.com gives us a scorecard on .xxx each day, and it’s not pretty. Yesterday saw 15 new domains registered. I’ve seen it in the single digits (i.e. below 10) quite often. If they anticipated that their search.xxx launch would cause a fresh wave of registrations, they were wrong.
I’d be curious whether Afilias is pushing for their sale (if Afilias is entitled to a percentage of the proceeds of the “premium” names). Recall that PIR is now selling various short .org domains (1 and 2 character), and Afilias is the backend of .org.
Just like we saw with .mobi, and .name, I expect that most new TLD operators will want to cash out and move on to something else, rather than be in it for 10 or 20 years. Selling out all the premium names now seems to be a “tell” that their horizon is much shorter (my own horizon is much, much longer — I’d like to own my company’s domains forever).
What “bullets” do they still have left, once they sell their premium names? I see:
(1) price cuts
(2) going back to ICANN to have the $10/domain per year IFFOR payment reduced (that’ll be fun to watch, if they try, as it’d be yet another case of a registry promising one thing to ICANN, then seeking to change the rules later)
(3) their “micropayments” plan? (good luck on that having any impact whatsoever)
.xxx should be a cautionary tale for new TLDs applicants, and for registrants who build a website on sand.
BTW, IFFOR is giving a grant of $10,000 for 2012 (deadline is October 31, according to the website). I wonder what’s happening to all the rest of the money? (100,000+ domains at $10/domain is more than $1 million!). Someone, think of the children!
Hi Michael,
If its any consolation I have sold Keywest.xxx for $2,000 to an end user who approached me.
Nigel
@MHB
Thanks for your input on this but would like to take the chance to make a few observations and comments.
No NEW names were released, ALL of these names have been up for sale , albeit quietly with Premium Names Parking Pages. No new inventory was made available
All we did , in response to the successful launch of Search.xxx, was to stick a BUY IT NOW price on these names, put them together in one place and allow prospective buyers to search and sort the names on price, type in traffic rank and rank of exact match domain search queries.
We did this for two reasons a) as a result of an increase in enquiries for premium names since search.xxx launched and b) to improve the long winded , time consuming and inefficient back and forth process of a buyer inquiring and asking questions by disclosing up front, the maximum information we have.
We have been selling these premium names at a steady clip of perhaps 5-10 a week throughout the year and we also released at the same time last week, a sample list of many of the names and prices that we have sold so far , in order for prospective buyers to have all information on hand. At that rate or sale it would be 3-7 years before these desirable names were sold and developed into quality operating sites, and in our opinion this is not optimal.
We have sold several names since the icmregistry.com/premium page went up as a direct result of this change in methodology and publication of BIN prices and traffic/search data. Indeed, one of the purchasers also requested a name that we had previously sold to another buyer and we brokered the deal in a couple of days that showed 100% profit for the original buyer over 9 months.
As a registry we have to balance the desire for a populated and healthy developed name space versus the desire to maximize every cent out of a premium portfolio. We believe , on balance, that it is better for the health of our namespace to be fully developed out earlier, so that when our consumer, who has become used to using the .XXX namespace via, say, search.xxx, goes to direct type in blondes.xxx or orgies.xxx he gets to a quality , developed site rather than a “this name is for sale” parked page, which may, forgive the pun, “turn him off” the space for ever. We believe a developed namespace is better for everyone long term rather than taking 3-7 years to exhaust our supply of premium names at maximum value.
I still reckon that our premium names have sold generally for much higher prices and in greater quantities than other recent TLD launches and they continue to do so. The quantities and values stand favorable comparison to ANY other new TLD.
The upcoming renewal period has nothing to do with this. 85% of the registrars we met with last week in Toronto, including our 5 biggest, report that renewals are well ahead of the norm at this stage of the proceedings . As I mentioned no new names were released that weren’t already up for sale. We just decided to repackage them and price them with other stats to allow buyers to asses value by having price, traffic and search popularity rankings in one easy place. Around 200 of the domains listed are exact match to popular search terms, which we thought was newsworthy and worth pointing out.
As a valued client of ours hopefully you have been receiving the benefit of the some of the traffic to Search.xxx to your developed sites as a result of the relevance of the name to the search term and in due course that should only serve to increase the values.
In my opinion the Registry does not believe in its own project any longer and wants to liquidate the best domains. I think that, if the team behind .XXX could turn back time, they would invest all that time, money and resources elsewhere instead of wasting them with this extension.
@Stuart Lawley
I’ve taken a look at the list and would like to question the methods used to identify the “premium” domains. Particularly, there are names like sexother.xxx (@ $5,115) that would be worthless in .com but are considered premium there.
i am of the opinion that people will continue to be interested in naked women… however they will not be so interested in domains that they can’t make any money from. mmmmmmmmm… cheesecake.
The timing of this is so much worse than you know. Right now, adult companies from across the county, almost every major company–Manwin, Vivid, Evil Angel, MetArt, Hustler, Adam & Eve, Cal Exotics, Doc Johnsons, Pipedreams, etc.–are focussed on one thing and one thing only–defeating LA’s Measure B. Companies are organizing, volunteering, and donating hundreds of thousands of dollars collectively. Manwin has donated $180,000 to the campaign. The industry sees this as its most serious and immediate threat.
How much has ICM donated to the campaign? $0 Instead, they chose this moment to try to extract more money from the industry, creating deep ill will. Not particularly smart.
@ Joe,
Thanks for your comment.
As you know domain pricing (particularly outside.com) is an inexact science.
Over the period of the last year we have priced our names on various factors and revised them based on actual sales, levels of type in traffic and most recently as a result of the popularity of certain terms in the millions of queries made in search.xxx.
We have also run our lists through so of the leading and respected domain sales platforms known in the industry to gauge other opinion of values and to look for anomalies.
in reality value is what things sell for and we also have over 200 name sales within .xxx to use as comparables also.
I am sure out of the 1,000 names there will be a few anomalies , some of which may produce a bargain or two 😉
As to your earlier comment, this couldn’t be further from the truth. This year alone we invested over $3 million in total applying for the .sex, .porn and .adult new gtlds to supplement .xxx and offer .xxx registrants some extra future benefit together with the investment in search.xxx.
anyone who watched our long struggle to get .xxx approved will be well aware of our long term views on this space and further announcements in the coming weeks with reinforce that position.
Honolulu
Congrats that’s one sale
Stuart
“”No NEW names were released, ALL of these names have been up for sale , albeit quietly with Premium Names Parking Pages. No new inventory was made available””
We know that.
The registry is in business of selling domains.
The domains the registry restricted and held back are always for sale by the registry, its the method and time frame in which they are sold is the issue.
Search.xxx is great, the private sales are great but this move is not.
How can you justify to the people that bought the over $5M in premium domains which we know total under 100 when over 1,000 of the reserved domains have a total asking value of just $7.7 million?
Your going to have strong renewals how could you not?
about 1/3 of the domains in the zone file were sold during the sunrise/land rush I think the number was 80K domains.
As .Co said they have a 90%+ renewal rates for these domains even 2 years later.
These domains cost more to register and people who took the time and spent the money to get them in sunrise and landrush are going to keep them
Beyond that I would say that more than 50% of registrations are defensive.
Defensive registrations will have close to a 100% renewal rate.
So all you need is a 50% renewal rate on the balance to get to over 70%
George
Afilias is just a back end provider for ICM, they just make the registry work but they are not the registry in this case, ICM is the registry and ICM is responsible for marketing.
Registrars can help market as well but registries, including the new gTLD one’s will have to market the domains, not the back end providers
Lets see if we can put a value on the premium names that are for sale.
A .xxx of mine has been generating an income of $60 a month.
It’s sitting on a white label site and it has over 60,ooo UV’s per month.
This name isn’t particularly outstanding but has a steady income.
The UV’s have been steady for over 2 months.
The usual rule of thumb to value a domain is: yearly income x8 so $720 x8 = $5760
The name in question is Pornfilm.xxx
Imagine what the income would be for a name like LapDance.xxx (premium purchase price $1815) this is #96 on the list of names for sale.
The upshot is that the value in these names are far higher than they are currently priced at.
Honolulu: If the value is “far higher”, you would have simply bought it and kept quiet, rather than post a comment on a blog. Indeed, you’d be *borrowing* money to buy all those “screaming bargains.” Or, you would lease/rent it from the registry.
@Honolulu
Your domain appears to be developed into an adult tube site:
1) Any domain name can be successfully developed into an adult tube site (in fact the most successful ones are brandable .coms such as xvideos.com and xhamster.com), so no need to spend all that money on a .XXX
2) A tube site requires a lot of bandwith that is notoriously costly, so you should mention how much that site costs you each month. Is it profitable?
Spot on analysis, Michael.
But cheer up, you still may win that bottle of Blue from me 🙂
I do hope that this is the beginning of a long litany of regrets expressed by domainers losing huge sums of money on the .xxx domains with which they intended to exploit the adult industry. I am enjoying it so–it’s rewarding to see people reap what they sow.
@George, If i had the cash I would buy, I will ask about the leasing.
@Joe,
1. Only .xxx will do for adult material, .com/.net/.org/.cctld/etc is not appropriate.
2. Its a white lable site so doesnt require bandwidth on my side of things, its just a cname redirect.
Takes balls Michelle K coming from someone in an industry that exploits women, you are worried about domainers exploiting the adult industry.
I think its your industry that is reaping what is sowed.
And Mike is there is a reason you allowed this troll to post the same thing 3 times ?
@8p6 Slow down with the assumptions, angry little man. I don’t sell adult content, I sell domain names, many of which are adult, primarily dating. Yet, I did not buy a single .xxx domain because I believe that it was one of the most blatant shakedowns I’ve ever seen. And the culpability lies not just with ICM; ICANN, registrars, and domainers were all complicit. I am rarely critical of the free market, but this is precisely what gives free enterprise a bad name and leads to more government regulation. I’m sorry if you do not agree, but I believe that it is important for domainers to consider the consequences of their actions.
I am sincerely sorry that my post appeared in triplicate. Twice I recieved an error message that asked me to resend. Maybe Michael would be so kind as to delete two of them.
I did delete the duplicate posts.
I can’t be on this thing 24/7
I check it every few hours
@ David
Bottle of Blue, look forward to it
@Stuart
Why I say you went all in on this move is there is are only 3 ways this can go now
1. You sell the hell out of these premium domains (which I don’t see happening) in which case you will have proved me wrong.
2. The domains stay for sale until sold.
Just like a house that sits on the MLS for a year, then two then three, domains that have been for sale forever, devalue and become tainted.
3. You start reducing the price of the domains that go unsold.
If you can’t or don’t sell a lot of these domains at these prices then eventually you will decrease the price, thereby further the devaluation of the existing premium domains.
To me too big of a risk, way too soon and before a healthy secondary market exists
@ Joe
This is what happens when someone that is not a domainer sets prices on domains, they rely 100% on stats in this case search stats, instead of all the intangibles that go into the valuation of a domain
.xxx=.co
(Btw,I did see a .xxx name at a Sedo auction a few months ago………….a really sicko name…………YoungBoys.xxx, registered by someone in Turkey………..I contacted Sedo and asked them to remove it from auction and they did.)
@Alan
.CO has nothing to do with .XXX: different markets, different history, different promotion strategies, different pricing, … I could go on until tomorrow.
I totally agree with Michael.
That was a really bad move from ICM registry. It seems desperate and not thought through.
Nobody wants to see a registry putting all the reserved domains on sale.
Well actually they kept a lot and they didn’t tell why. This whole search rank is kinda funny since they kept a lot of the reserved domains out of it. Why isn’t cams.xxx at the list? Or pornstar.xxx?
Also what is the point of a Buy It Now button when you can’t buy it now or even see the price?
When you click on the Buy It Now button, a contact form comes up with no mention of the price that is posted at the registry website. That could also mean that further negotiations can be made and the $7.7 million could be $5 million or even lower with bulk purchases. (Especially with a few domains that noone would register even if they were free)
I couldn’t agree with Michael more. Non-domainers should not try to value domains. A similar principle should be applied to adult business.
Consider Adult Entertainment Communittee #1. This community has been lead by a group of companies respectfully refered to as the “founders” for over three decades. In fact, each year they host “The Founder’s Show”–companies like Vivid, Hustler, Wicked, Doc Johnson’s, Cal Exotics, etc.
Then comes along a British fax-machine salesman who creates a second Adult Entertainment Community, ushering in “The New Adult Industry,” residing in the .xxx “ecosystem.” The founders of this “new industry” are Frank Schilling and Michael Berkins.
So, just as you criticize Stuart for valuing domains, you are being criticized for founding an adult industry about which you know nothing.
PS .xxx lost 6 registrations yesterday.
Its extremely hard to sell an excellent .Com at a low price and even harder to sell a .Co
We know insiders pump up all sorts of other TLD options too, and trade them amongst themselves, get the best ones, do sunrise and analytical traffic arbitrage, etc. A game for insiders, few end users care about anything but the very best .Coms at prices that are too low relative to the marketing market value. Short all but the best .Com, nothing personal, I love you all.