Sandeep Ramchandani
CEO, Radix Registry

In the New TLD Space: 

Lack of innovative Registry product models:
One of the more exciting expectations from the nTLD program was that it would spawn some innovative use-cases for TLDs. While there have been a fair few attempts at doing this, not a single one stands out as being successful. That's a bit of a pity since the DNS can certainly be used for more than just pointers to e-mail addresses and websites. The only exception which comes to mind is Google's .new. There's nothing ground-breaking there, but its use of the TLD as a shortener to opening a new instance of Google apps on the web, is at least going beyond the mold of selling registration years. 

Continued acceptance of nTLDs as the new normal: 

For a business which focused on offering quality, generic TLDs as the new alternative, 2019 was a stellar year. Across all our key performance indicators, we saw a notable rise in growth over 2018. On the financial side, our overall revenue grew over 33%, while renewal revenue grew over 45%. A key goal for us was to boost our channel network and ensure our TLD is available at all of the top domain registrars globally. We saw a marked change in the degree to which channel partners were open to testing our TLDs at prominent spots, and most of them were satisfied to commit those spots to us for the long term. 

There was also a boost in the number of startups, celebrities, big brands and other high visibility websites choosing to break convention and go with a new TLD.  

Annuity Premiums > One time 

Based on what we see on domainer blogs, there's a widespread belief that 2019 was a bad year for premium New TLD names. That belief is predicated on the slow down of visible one time sales in the after-market. What they are completely missing, is the vast inventory which most registries sell through Registrars for an annual, premium fee. At Radix, wve seen a growth of 20% in annuity premium sales over 2018. What's even more encouraging is that the renewal rates for domains in their first, second and third + tenure have come in at 52%, 67% and 89% respectively. Do keep in mind that for Radix, domains sold at a premium price continue to renew at the same premium price every year.   

In The Industry Overall - The Highly Controversial .org sale:  

The sale of .org to a private equity player was undoubtedly the biggest event of the year. There are many ethical, moral and commercial questions that have been raised regarding the process in which the sale unfolded. .org has been the de facto TLD for non-profits for all sizes and amassed over 10 million registrations and powerful brand loyalty. The backlash we've seen, not just from within the industry, but from the tech media and customer groups has been unprecedented. 

Radix CEO Sandeep Ramchandani speaking 
at the 2018 NamesCon Global conference in Las Vegas.

Looking ahead to 2020, Sandeep shared these thoughts:

Building a TLD Brand: 

As a nTLD registry business, the biggest challenge and opportunity lies in transforming a TLD into a brand. While we are in the enviable position of owning many TLDs which have the potential to become strong brands, it's a long and complex path to get there. Making any TLD stand out and get noticed when there are literally several hundred others, isn't easy, even if you have the best strings. This is the one area where we have, and will continue to, put most of our resources and investment behind.   

Many TLD operators tend to focus only on the 'push' and supply side of the business without giving any attention to driving up awareness, interest and desirability towards their TLDs. The 'push' focus can only yield short term results and lead to a customer base which will move to the next cheaper option as soon as it is presented. With the likes of .tech, .store, .online and .site, we're hoping to build the top TLD brands to come out from the new gTLD process.   

Focus towards the next nTLD round

As we inch closer towards an inevitable subsequent nTLD round, ICANN meetings will garner much more attention and interest from both the current and new players. Considering the increasing level of interest our industry has been garnering from private equity and VC investors, it is likely we will see unprecedented levels of funding pumped into this round. The rules of the next round is anyone's guess at the moment. Much of 2020 and the years leading up to the launch will be filled with debates, discussions, speculations and attempts to build consensus around the final application guidebook.   

China to make a come-back

Last year, for the first time ever, China recorded a larger population of wealthy people than the US. Going by most macroeconomic and digital indicators, China will soon overtake the US as the largest domain market in terms of volume. While that may not mean that China becomes a larger revenue opportunity in 2020 (domains in China are priced at a fraction of what are in the west), geographically it is where most companies across the domain name supply chain will focus more of their resources towards.  

Scott Pruitt
Domain Aftermarket Brand Manager
Web.com Group/NameJet

Number of Internet Users and Domain Registrations Continued to Grow! 

In 2019 we saw over 420 million new internet users worldwide and a 5.1% increase year-over-year in domain name registrations across all TLDs with over 17 million new registrations. The industry as a whole continues to grow, which is also good for the aftermarket.

New Buyers Entering the Market 

One trend we noticed in 2019 was an increase in end user type customers purchasing domain names. It seems that awareness of the domain aftermarket is growing and becoming more common outside the traditional “domainer” community. This is good for the industry as a whole because it will have a lifting effect on pricing, particularly on premium domain names as more buyers enter the market. Educational sites such as DomainSherpa and DNAcademy should take credit for this as they have been instrumental in helping new investors understand the complex domain aftermarket ecosystem.

As we look forward to 2020, I expect continued growth in the aftermarket as a whole and for Web.com Group. We currently manage two of the major expiry and drop-catching platforms, NameJet and SnapNames. Last year we combined the resources of both platforms to create a single auction environment for drop-catch domain names, allowing cross-platform bidding for the same names. Going into 2020, we plan to continue this platform integration by combining registrar expiry names in a common auction beginning with Network Solutions. This will make our exclusive domain inventory available to more bidders using their platform of choice. We also plan to make improvements to customer service and provide new services friendlier to domain investors along with more competitive renewal rates.

Jothan Frakes
CEO, Plisk.com

The most noteworthy trends within the industry are acquisition trends and increasing regulatory considerations that are contributing to the demise of Whois as we once knew it. 

Registries and Registrars are consolidating with greater frequency. In 2019, there were numerous acquisitions - highlighted by the current 1.1 billion USD Ethos/PIR (.ORG) acquisition currently underway. Sure, .ORG is a big deal (literally). Though smaller scale in contrast, there have been others through 2019 - Radix acquiring .UNO, Afilias buying out the balance of .GLOBAL and Shortdot SA taking over .BOND among the registry acquisitions. Among the registrar acquisitions in 2019, CentralNic’s activities in the registrar space brought in numerous registrar acquisitions to bolster their 2018 expansions, and groups like Combell have positioned themselves through acquisition as significant portfolios of companies providing registration services.

There was an acquisition of hosting virtualization and provisioning platforms CPANEL/WHM, Plesk, WHMCS and other platforms commonly supporting simple and intuitive services that compliment domain names - all consolidated by a company called Webpros, which accumulated a very significant market share in the sub-hyperscale hosting tier in the process. This impacts our domain industry as they play an important role in the tier of the hosting market that lives between the companies that provide turnkey pagebuilder type sites on the smaller end and the massive cloud providers such as Azure, Amazon, Google, etc. 

What is very important to note is that domain name utility and value continue to trend upward - regardless of the expansion or consolidation of the industry participants - due to the core intrinsic value of domain names as the essential shortcut technology of the Internet.

WHEREIS WHOIS? 

Regulatory pressures, such as we are witnessing with the EU GDPR (and there are more coming), create further consequences, costs and challenges for compliance and operations for registries and registrars. As we currently see with the massive redaction in the amount of information presented in WHOIS lookups, these regulatory pressures can have sweeping impacts on domain name owners and the domain market. These regulatory changes have been coming in tandem with policies and efforts to evolve the WHOIS system into better solutions that come from ICANN and that community of stakeholders. Net result is that it is more challenging than ever to lookup or confirm the ownership of a domain name.

Domain values will likely see growth on the ultra-premium and some flattening on the long-tail, but aggregate registration base and valuations will continue to grow. Much more M&A is likely to reveal itself throughout the coming 18-24 months. There is growing attention by registrars and hosters to making things simpler for registrants to obtain and use the right name(s) for their projects.
Look for larger players to break into the domain name space through some of the acquisitions in the coming year, such as those who offer services in the cloud or productivity software that go hand in hand with domain names. 

Security will continue to be a very important focus in 2020. It is very important to safeguard your domains using strong passwords and 2FA as well as other protections. 

The value of domain names as identifiers will continue to be strong, regardless of the industry sentiment. Domain names are the dominant shortcut system and there is no replacement with the same flexibility on any immediate horizon

Zak Muscovitch
ICA General Counsel &
Principal, The Muscovitch Law Firm

The most significant events that I have seen, which also formed a trend, I noticed in my role as ICA General Counsel working on domain name policy matters; ICANN is rapidly losing more trust and legitimacy as the overseer of the Internet domain name system. We saw a good example of this when ICANN ignored the Internet community which was overwhelmingly against removing price caps on .org domain names. We saw it again when their lack of accountability led to the intended sale of PIR. And we saw it yet again when they agreed to raise .com prices in exchange for a measly $20 million from the .com registry. ICANN’s poor decision making and governance is attracting more and more critics from within the Internet community, but also from mainstream media and governments.

 Looking at this as both a domain name lawyer and as ICA General Counsel, I think the big challenge ahead (amongst many!) is to work diligently and cooperatively on reviewing the UDRP. The UDRP is up for review in 2020 and we have to work hard to find solutions, compromises, and ways forward to fix serious problems with the UDRP that affect domain name investors, as well as to ensure that the UDRP remains a viable procedure to combat cybersquatting.

One of the big stories of 2019 was the end of year announcement from two of the industry's most successful domain brokers, Jeff Gabriel and Amanda Waltz, that they had launched a new brokerage and consultancy company at Saw.com. We flew to their home base in Massachusetts in late November to videotape an interview with Jeff and Amanda about their new venture and broke the news in our December Cover Story (our first ever video Cover Story).

While most of that focused on the formation of Saw.com, we concluded it by asking Jeff and Amanda what they thought about the long term future of domain names when a number of businesses are relying more on social media than their own website to market their enterprises. We thought that 3-minute clip from the interview would be a perfect way to conclude this year's State of the Industry report since, with the start of a new decade, this is a perfect time to look even further out than 2020. Just press play - and have a great decade!

Jeff Gabriel & Amanda Waltz
Founders, Saw.com

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