Tuesday 6th October 2015, Gibraltar: When the first new gTLDs were launched, the environment for premium names was a challenging one. There were probably three key contributing factors to this less than buoyant market:
- Legacy Investment protection: the most animated group in the premium name aftermarket, domain investors, already had a significant inventory of .com names whose value they, understandably, had to protect. Therefore, investing in new gTLDs may possibly have threatened to undermine the value of their existing portfolios.
- Lack of usable data: The aftermarket specialist trading market places had no legacy data on which to accurately value new gTLD premium names. There were no historical data on the performance of either a new gTLD domain name or the domain extension. In addition, search engine providers were reticent to clarify how new gTLDs were going to be assessed and ranked in search results.
- Return on investment: Many open registries were banking on quick sales of premium domain names as a way to recover application fees as well as go-to-market expenses. A large number of premium names were released onto a market that was not ready to absorb the sudden influx of competing names.
It’s now approaching 2 years since the launch of the first new gTLD, there has been some market consolidation, some failures and a few successes. So what has happened to the new gTLD premium market place?
Famous Four Media, a new gTLD portfolio applicant, has been watching the premium market closely after launching the first of its registries nearly 18 months ago. It was also the registry management company to announce the first 6 figure new gTLD premium domain sale in its .WEBCAM registry in June 2014. Famous Four Media has always stated that it was in no hurry to sell its inventory of premium names and was content to wait until the market was in the position to value new gTLD premium names accurately. Those conditions have now been met and premium names are now making a significant contribution to Famous Four Media registries’ revenue streams.
“We have been seeing regular growth in sales of premium names,” said Geir Rasmussen, CEO of Famous Four Media, “Not only is there an increase in the transaction volumes on a monthly basis, but we are also seeing an upward trend in the price people are paying for our premium names.”
Famous Four Media segments its premium names into 8 distinct tiers and allows registrars to query premium prices directly via EPP. Now all registrars can offer premium names directly to their customers through this mechanism. Since the introduction of the tiered pricing system 3 months ago, Famous Four Media has seen over 320 automated premium domain name sales through tiered pricing.
In the month of August, Famous Four Media reported a transaction value for premium names in excess of $2.1million.
“We are obviously delighted with this result,” continued Rasmussen. “Making pricing available to Registrars via EPP has meant that FFM premium names are now widely accessible. Our simple tiered pricing structure means that it is very easy for registrars to sell premium names with no uncertainty over margins or complicated pricing mechanisms. This, coupled with the maturing premium name market for new gTLDs, gives us great confidence in the bright future for new gTLD registries.”
Famous Four Media’s premium names vary in price from a very affordable $200 through to its super-premium names valued in the 6 to 7 figure range.
“It is important to get the balance right. Few premium names will sell for the magical million dollars and a limited number will sell for 6 figure sums” says Rasmussen. “The high-value inventory is obviously important, but the contribution to revenue from lower-value premium names in the $200 – $500 range will be significant over the life of the registry. These names are now readily accessible to a wide segment of the population and can make an immediate contribution to businesses through increased website traffic and increased sales.”
About Famous Four Media
Famous Four Media Limited (www.famousfourmedia.com) was set up in 2011 by a group of recognized domain name experts and successful financiers to actively provide products andservices to TLD Registry operators under ICANN’s new generic Top Level Domains (“gTLD”) program.
Drawing on the best from both Registries and Registrars, Famous Four Media’s management team has extensive experience in the domain name industry having successfully launched, operated, marketed and run generic TLDs under previous rounds and having managed some of the largest corporate and retail domain name registrars in the world.
The 24 gTLD applications, that are currently under Famous Four Media management, include some of the most interesting and valuable domain suffixes, such as .ACCOUNTANT, .BID, .CHARITY, .CRICKET, .DATE, .DOWNLOAD, .FAITH, .LOAN, .MEN, .PARTY, .RACING, .REVIEW, .SCIENCE, .STREAM, .TRADE, .WEBCAM and .WIN