Awareness or Demand – What’s holding back the success of the new gTLD’s?
Well over three years down the line since the new gTLD’s were first released, and one of the main discussions in the domain industry revolves around the question: “Why is the new gTLD programme not really taking off”?
Is it an awareness issue or a demand issue?
In my view, it’s a simple matter of demand. Brand-owners are not registering the new gTLD’s for the following main reasons:
1. There are far too many new TLD’s. The extreme amount of new gTLDs has confused the market, and in a confused market, people stick to what they know – the .com and the country code domains.
2. The new TLD’s are too expensive: Compared to the .com and the ccTLD’s, the new gTLD’s are too expensive to register. While you can register a basic .com or a ccTLD for as little as USD 8 per year, the new gTLD’s cost in the area of USD 100-150 in renewal per year.
3. Drop in defensive registrations. Just a few years back, defensive registrations (registrations made to protect a brand from cyber squatters) were a huge part of a brand’s portfolio, but over the past few years, we’ve seen a drop in defensive registrations. Brands have come to realise that the potential damage is generally very limited.
4. Switching to a new TLD is simply not worth the risk. Most brands will not risk switching from a .com to a new gTLD. They can’t really see the benefits, so why should they? If registries, had done a better job showing the actual benefits of the new TLD’s, maybe there would have been a higher demand.
Why I don’t think it’s a matter of awareness?
Many have argued that the reason why brand owners have yet to use the new gTLD’s is a lack of awareness. I don’t buy it. Anyone dealing with domains at some level will know that the new gTLD’s are very much on the market.
Registrars have bombarded their clients with e-mails, newsletters and phone calls on this matter. Of course they have. And if you ever go to check your brand’s name at a registration site, in addition to .com, .co.uk, .org, etc., you will get a long list of suggestions with new gTLD’s. Even mainstream media have covered this. They know!
But what determines success?
The way I see it two factors determine the programme’s level of success – the average level of domain registrations per TLD, and the level to which the new gTLD’s are being used by brand-owners, and here’s where we are now:
The average number of registrations per TLD is extremely low
1181 new gTLD’s TLD have been released and roughly 24 million domains have been registered. 24 million registrations may seem like a lot, but 60% of those 24 million registrations are spread across only 8 of the new gTLD’s. Which leaves 40% (9.6 million) that are spread across the remaining 1173 TLD ‘s – or only 8,200 domain registrations on average per TLD. (source: ntldstats.com)
To put this into perspective there are approx. 1.3 million registrations on the .dk TLD, and 1.2 million registrations on the .se TLD (both relatively small country code domains).
Brand-owners are not using the new gTLD’s
So far we’re not seeing brands using the new TLD’s to build their websites around. In fact only Barclays and BMW have stated they will.
In other words, until brand owners begin actually using the new gTLD’s to build their websites around, the programme will not be a success.
And with a low demand and a confused market, this will not happen unless registries can somehow convince internet users and brand-owners of the “incredible benefits” of the new gTLD’s compared to the .com.
In other words, things aren’t looking too bright for the new gTLD programme.
More on this topic? Check out my post on why the ccTLD’s and the .com will win over the new gTLD’s.