France’s ccTLD grew 3.7% in 2019, totalling 3,428,951 domain names under management as of 31 December, an increase of 123,655 in the 12 months according to Afnic’s Annual Report released this week. This makes .fr the ninth largest ccTLD in the world according to Verisign’s Domain Name Industry Brief.
There is always some degree of confusion in discussions about the “new TLDs”. Some points of view try to be optimistic, others on the contrary only highlight the bad news, and most refer indistinctly to the “new TLDs” as if they did not break down into different segments, each of which obeys dynamics and constraints of its own.
The purpose of this post is to provide some food for thought and to shed some light on those dynamics and constraints, not only for the stakeholders in the domain name ecosystem but also for all those who might want to obtain their own TLD one day.
A second objective is to show that the key success factors for these different types of TLDs are clearly not volume-based, at least for some of them. The concept of volume only makes sense for “commercial” nTLDs, the longevity of which is based on the sale of domain names to third parties. The success of a TLD relies more on its ability to generate value for its registry and the Internet community, and this value is measured differently from segment to segment.
The costs, however, are the same for every registry, and this burning issue cannot be ignored, because it is far from being a neutral factor: in addition to the costs of the technical registry operator, the annual fee of $ 25,000 required by ICANN (for nTLDs with less than 50,000 names in stock) represent a fairly heavy expense.
For a commercial TLD with 5,000 names in stock, the ICANN charges represent $ 5 of fixed costs per domain name. If we add the costs of the back-end registry, the internal operating costs and the promotion and development costs, it can be seen from the outset that the registries concerned are obliged to charge high prices that are relatively uncompetitive compared with those of the major competitors already firmly established on the market, benefiting from the dual advantage of volume and adoption by users.
Unequal business models
The new TLDs are not equal in terms of their business models. Consider each of the major “segments” or “families” that currently exist.
- Brand TLDs (or .BRAND) are domain name extensions created by large groups for their own use. Their use lies in the contribution they make to their holders’ digital strategies. The expected volumes are low and the “cost per domain name” is therefore high, but offset by the added value created for the company. In some cases .BRANDs can be opened to customers, partners etc. of the delegatee company, but for the time being these cases are exceptions. In general, their use is internal and the notion of “tariff” is therefore not applicable, just as the nation of profitability must be analyzed in the context of a large group. Although of consequence for a start-up company, the budget needed to obtain and operate a TLD is fairly modest compared with the investments required to ensure and develop the web presence of a large group and its components, not to mention the budgets for communication. To learn more about .BRANDs, the White Book published by Afnic last July is recommended reading.
- Sponsored (or Community) TLDs are in theory reserved for specific communities, which by their very nature are fairly limited in scope and scale. Their volume expectancy is by definition rather low, up to “average” for large communities and if the TLD is universally-acclaimed. In order to balance their accounts, these TLDs are forced to sell their domain names at high prices, but which can become moderate if successful.
- GeoTLDs correspond to the names of regions or cities. Their catchment areas are often greater than those of Communities, while targeting relatively small audiences. Their problem is very similar to that of the Community, although easier to solve. Their “spectrum” is broader, ranging from a few thousand domain names to several hundreds of thousands in the long run. But initially and for several years, the volumes remain low or average and the tariffs must be aligned accordingly, from high to moderate. However, volume-specific prices allow these players to expect a quick return on their investments, with renewal rates generally high and create operations growing as the reputation of the TLDs increases. To learn more about geoTLDs, recommended reading includes one of our recent articles.
The last segment, that of the “pure generics”, is split into two:
- generic domains that can only reach a small customer base either because of their eligibility rules or because of a key term that can only interest restricted audiences and niche markets. The financial logic of these nTLDs is close to those for geoTLDs and Community TLDs, the expected volumes being low or average and the tariffs high or moderate as the case may be. For the moment there is no example of TLDs such as these having acquired sufficient volumes to offer moderate tariffs, but this will probably occur in the future.
- “open” generics, with terms used worldwide, which are lucky enough to address a global target or at least one that is very broad. These TLDs can forget the approaches targeting niche markets and relatively high prices to adopt mass sales and low-cost strategies. The bet is all the more risky if the TLDs are young but they are probably the only ones capable of considering such a strategy. Here the volumes can range from low to high and the tariffs from low to high depending on the registry’s choice and success.
|Possible tariff levels – n/a to low, moderate and high|
|Average||COMMUNITY GEO GEN-restricted GEN-wide|
|Weak||BRAND||COMMUNITY GEO GEN-restricted GEN-wide|
This brief modelling of the balances between volume expectancies and tariff levels can be used to explore the consequences for registries in terms of marketing strategies.
The consequences in terms of marketing strategies
Because of the specific features of each, “nTLDs” do not play on equal terms and must develop marketing strategies in accordance with their strengths and weaknesses.
For example, the lower the expected volume, with higher the tariffs, and the more the registry is obliged to gamble on the added value of its TLD and/or on the liking that it manages to generate with its target. BRANDs seek added value in connection with their digital strategy. COMMUNITY and GEO TLDs can convey notions of belonging and recognition between the holders and their visitors or prospects. In many cases, these are “love-TLDs”, that holders will be prepared to pay more to acquire because from their point of view they make more sense, for reasons that are most often affective and related to identity (belonging to a city, a region, or a community). Restricted generic TLDs may seek to develop original service models that provide them with the key success factors they may have initially missed.
Conversely, the “pure generic TLDs” will be able to practice low tariffs, and even wager on TLDs that are virtually free of charge, hoping that the proportion (generally very low) of renewed names will eventually enable them to balance the books. Renewal rates are even more problematic for TLDs that have chosen a virtually free approach for create operations, hoping to make up their losses with renewal rates. So far these innovative models have achieved tangible results in terms of volumes in the short term, but without guaranteeing the long-term sustainability of the TLDs concerned.
Exclusive TLDs versus mass TLDs
These are two philosophies that coexist without coinciding: the potential “love-TLDs” tend to be exclusive or selective, while the “mass-TLDs” seek on the contrary the widest range of targets possible.
Both approaches, however, expose themselves to miscalculation. Users interested in a “love-TLD” can be put off by conditions of eligibility that are too drastic, making the TLD cumbersome (checks etc.) and even more dissuasive in that their selective nature does not necessarily create attachment or any perception of added value. “Mass-TLDs”, on the other hand, by their construction, suffer from significant volatility and must maintain high levels of create operations if they do not want to see their stocks collapse. This strategy can be likened to that of a Ponzi operation if it escapes the control of the registry.
The logical result is that for some months now, we have been witnessing the changes expected among some of the registries , with “love-TLDs” disappointed by the volumes seeking to ease their eligibility conditions, and some “mass-TLDs”, after having their fingers burnt by their catastrophic renewal rates, revising their prices upwards.
Bad pricing never pays
That remark is not gratuitous: it should be remembered by future applicants for TLDs in the coming years, when ICANN organizes the next “rounds”.
In a world as competitive as that of domain names, bad pricing can lead a registry to ruin simply because the tariff turns out to be dissuasive (negative effect on volumes) or dilutive (negative effect on the perception of value).
Registrars and users alike are very hostile to rate increases, so it is probably best for a low-to-moderate TLD to start with reasonable rates and allow for the possibility of downward adjustments. as volumes increase.
Rights holders and domainers, two false friends
A fairly large number of new top level domains have built their short-term models on the hope of reaching two particularly promising markets: rights holders and domainers.
Anxious to protect their brands against cybersquatting, rights holders have long been a cash cow in the domain name market. The “sunrise period” which is designed to allow them to protect their names has sometimes even been transformed into racketeering organized by registries more or less created for this purpose. But the rights holders have often been very disappointing. Once they are conscious of the fact that they can no longer eliminate the risk, they increasingly content themselves with managing it and no longer take part in sunrise periods with the same enthusiasm (or the same anxiety) as before. Similarly, their defensive domain registration strategies have become increasingly parsimonious. The abundance of TLDs has helped kill the golden calf.
The domainers for their part have also been sources of disappointment. Some diehards refuse to take the risk of investing in TLDs of questionable longevity, or which are so poorly known to the public that the chances of reselling them with a profit are rare. The policy of “premium” names sold by auction or billed more expensively has also sometimes been disappointing, because domainers cannot afford to invest much on a single name, and the more “natural” holders are not sufficiently aware of the potential returns to accept the level of expenditure required.
All of these considerations are important for applicants wishing to obtain a TLD (and for those who already have one!) with respect to their investors or principals. It is important to understand the situation of each TLD profile in order to adjust the business model and the marketing strategy accordingly, and not to make “false promises” to backers, even in good faith.
The first precaution to take is to explain to them that volume alone is not a criterion of absolute success.
“Success” or failure is not related to volume but to the relevance of the strategy with respect to market conditions
Our analyses have shown that volume is only the tip of the iceberg, certainly the most visible, but perhaps not the most relevant. A TLD that achieves profitability with low volumes but which reaches its target and wins their loyalty will logically be more sustainable than a TLD with high volume but which is unprofitable and has to base its development on permanently gaining new customers to compensate for a very low renewal rate.
Even if the domain name market sometimes creates ridiculous situations, the principle of reality always wins over in the end. The 1st “Round” resulted in a proliferation of projects that were sometimes brilliant, but often unrealistic in terms of expectations and a total lack of correlation between targets, eligibility conditions, business models and marketing strategies. We may hope that applicants in the next round will link together these various parameters better and give their entrepreneurial venture the greatest chance of success.
This article by LoÃ¯c Damilaville, Deputy Director General at Afnic who manages the French ccTLD as well as 17 new gTLDs, was republished with permission. It was originally published on the Afnic website here.
The internet is increasingly playing a part in the lives of Belgians with growing numbers enjoying the freedom it gives them, go online for entertainment and feel the internet is an essential part of their daily lives. But only 1 in 20 Belgians have ever registered a domain name.
This is all part of research conducted by InSites Consulting on behalf of DNS Belgium, the .be ccTLD registry, at the end of 2018. The research found trust is important for Belgian internet users, and .be domain names score high on that front.
When asked what were the most important factors when it comes to trusting a domain name, Belgians responded:
- Language of the domain name
- Extension of the domain name
- The brand of the domain name
- Length of the domain name.
When it came to trusting a website, an encrypted connection (https) was considered the most important, a .be domain name second and a company logo third.
When asked if theyâve ever registered at least one domain name, 5% of Belgians said they had while 95% said not. 60% understood the concept of domain names while one third (35%) said theyâd consider registering a domain name in the future, the remainder said they wouldnât.
For the top level domains Belgians register domain names in, 77% said their own country code top level domain .be, 30% said .com, 16% said .net and 13% said .eu. Following was their neighbour .nl (Netherlands – 8%), .org (7%), .fr (France – 4%), .brussels (2%), .london (1%) and others accounted for 9%.
When it comes to the reasons for registering a domain name, 43% of Belgians said for a website, 40% for website and email and 6% just email.
It also appears Belgians are registering domain names sooner in the process of developing a business or idea with 42% saying they registered a domain name âdirectly at the time of the ideaâ compared to 23% in 2017, 11% âwhen the business is launchedâ (11% in 2017) and 23% after the start (30% in 2017).
Awareness was highest with .be and .com, with both scoring awareness among over 90% of Belgians (94% and 92% respectively) while .vlaanderen and .brussels scored 27% and 19% respectively.
Belgians said they valued the freedom and entertainment the internet offered them with 70% saying they loved the freedom the internet gives them (up from 59% in 2017), 68% said they go online at home for entertainment (57% in 2017) and 67% said they âfeel the internet is an essential part of their daily livesâ (47% in 2017).
Belgians say they surf safely online with almost two thirds (64%) saying they ânever surf to untrustworthy sitesâ while half (50%) âare concerned with safe internet useâ and a quarter (25%) âare aware of the latest online security toolsâ.
Brazilâs ccTLD manager, NIC.br, announced [Portuguese only] Monday theyâve reached the 4 million registrations mark after âmore than 25 years of flawless operationâ.
There are over 120 second level domains under which .br domain names can be registered from blog.br and wiki.br for individuals to eng.br and adv.br for liberal professionals, tv.br and tur.br for legal persons, rio.br, sampa.br and curitiba.br for cities those reserved for specific purposes such as gov.br, jus.br, b.br and org.br among others. Some of these have as few as 10 registrations, while the largest, com.br has 3,645,125 accounting for 91.2% of all registrations.
According to the latest Verisign Domain Name Industry Brief, .br is the seventh largest country code top level domain (ccTLD). Verisign already had .br at 4 million domain name registrations at the end of 30 June, probably through rounding, up in this case, to the nearest hundred thousand. Chinaâs ccTLD was the largest with 22.7 million followed by Tokelauâs free .tk (21.5m), Germanyâs .de (16.3m), the United Kingdomâs .uk (12.0m), Russiaâs .ru (5.9m), the Netherlandsâ .nl (5.8m). Following .br is the European Unionâs .eu (3.8m), Franceâs .fr (3.2m) and rounding out the top 10 is Italyâs .it (3.1m).
Revenues from .br registrations allow NIC.br to, in addition to providing and maintaining the infrastructure behind .br, invest in a series of actions and projects that generate benefits and improvements to the internet infrastructure in Brazil. These include the operation of internet traffic exchange points, which promote the interconnection of networks that form the Internet in Brazil, reducing distances and costs; the handling security incidents and tracking internet statistics.
Nic.br notes that other advantages of registering .br domain names include additional security features, such as token and encryption, that strengthen both the accounts of Registro.br users, and their respective domains. There is another recent feature: a redirection feature that lets you point a .br domain to any URL, whether it’s on a website or the preferred channel on social networks, keeping identities and active tags on the Internet permanently. Servers distributed by Brazil and other regions of the world guarantee speed and reliability in the resolution of .br and a team exclusively dedicated to meet and assist users in their doubts complete the description.
Global domain name registrations continue to rise, with approximately 332.4 million registrations at the end of 2017 across all top level domains, according to the latest Verisign Domain Name Industry Brief out today. The increase for the fourth quarter was approximately 1.7 million domain names, or 0.5%, from the third quarter and 3.1 million, or 0.9%, year over year.
Within this slight increase there are notable declines â that of .net which declined to 14.5 million at the end of December from 15.0 million at the end of the third quarter and 15.3 million at the end of 2016. Five years ago at the end of 2012 there were 14.9 million .net registrations.
There was also a decline in the total number of new generic top level domains (new gTLDs) registrations. Among the new gTLDs there were approximately 20.6 million registrations, or 6.2% of total registrations across all TLDs. This was a decrease of approximately 0.5 million registrations, or 2.4% for the quarter, and approximately 5.0 million registrations (19.5%) year over year. The top 10 ngTLDs represented 48.9% of all new gTLD registrations.
But of course there were increases. The big behemoth, .com, saw registrations rise to 131.9 million at the end of 2017 compared to 130.8 million 3 months earlier, 126.9 million 12 months ago and 106.2 million at the end of 2012.
Total country code top level domain (ccTLD) registrations were approximately 146.1 million, a 1.0% increase over the third quarter of 2017, and a 2.4% increase year over year. Registrations at the end of the third quarter of 2017 were 144.7 million, 142.7 million 12 months ago and 110.2 million 5 years ago when the 12 month growth rate for ccTLDs was 21.6% in 12 months.
Without including .tk, ccTLD registrations increased approximately 0.7 million in the fourth quarter of 2017, a 0.5% increase compared to the third quarter of 2017 and ccTLDs increased by approximately 2.3 million registrations, or 1.8%, year over year.
The top 10 ccTLDs as of 31 December were .cn (China), .tk (Tokelau), .de (Germany), .uk (United Kingdom), .ru (Russian Federation), .nl (Netherlands), .br (Brazil), .eu (European Union), .fr (France) and .au (Australia). As of the end of 2017, there were 302 global ccTLD extensions delegated in the root, including Internationalised Domain Names (IDNs), with the top 10 ccTLDs composing 65.5 percent of all ccTLD domain name registrations.
New .com and .net domain name registrations totalled 9.0 million during the fourth quarter of 2017 compared to 8.8 million for the fourth quarter in 2016 and 8.0 million 5 years earlier in 2012.
Growth in the total number of domain names registered worldwide was 7.1% in 2016, down from 11.7% in 2015, a study released Monday from the French ccTLD registry Afnic found.
Globally there were 338 million domain names at the end of 2016 including 169 million under legacy top level domains (.COM, .NET, .ORG, etc.), 28 million new generic TLDs, the first of which was introduced in 2014 and of which over 1,200 have now been delegated and 141 million under country code top level domains (ccTLDs).
Among the legacy gTLDs there is some variation with some going backwards, some increasing and others more or less treading water, the 2016 Global Domain Name Market [pdf] found.
With 131 million domain names and 39% market share, .com remains by far the largest TLD and even though registrations continually increase, its market share is slowly decreasing with a loss of 3 market share points since year-end 2014. Its growth has also slowed considerably, down from 6.4% to 3.7% in 3 years.
The new gTLDs continue to gain market share in terms of volume, accounting for 8% of the domain names registered worldwide at year-end 2016, compared with 4% at year-end 2015. The new gTLD market can be broken down into segments the report notes – Community, Geographic, Generic and Corporate – with very different purposes and profiles, from the hundreds of .Corp that only hold a few names, to generic TLDs involved in a race for volume.
ccTLDs which had an excellent year in 2015, experienced zero growth in 2016. Africa and North America were the most dynamic regions in 2016, while Europe in comparison stagnated. Latin America is growing slowly, and the Asia-Pacific region is subject to very strong variations both up and down. The Asia-Pacific region reflects the overall market trend.
Since 2014, the market has undergone major upheavals caused by changes linked to the aim of market participants to diversify their sources of income, but also to pursue integration strategies within the value chain.
After boosting the performance of some TLDs in 2015, “Chinese domain name filings” are now weighing on the growth of these same TLDs because of the numerous deletions.
The build-up of the financial sphere in the capital of certain major players is resulting in ambitious strategies while subjecting the market to new frames of reference and changes in management teams.
The report concludes that the intensification of competition and the absolute necessity to optimise the match between supply and demand will continue to weigh on the players and force them to rethink their business models and their positions more than they have ever done since the market first emerged twenty years ago.
To download the report in full, see:
The former CEO of Afnic, Mathieu Weill, has announced his new position following a surprise resignation in late April. The new position is Head of Digital Economy Department with the Ministry of Economy in France.
Weill surprisingly quit his role as head of Afnic, the announcement coming in late April with the board appointing Pierre Bonis, then the Deputy CEO, as Acting Chief Executive Officer from 1 May. A recruitment process is currently underway for a permanent CEO.
But with his new position becoming public it is now clear the reason for the quick change – a new position with the French government.
Afnic acts as the registry for the French ccTLD and a number of French territory ccTLDs. The announcement came just days after Afnic announced it has been awarded the right to operate .fr for another 5 years by the French government.
Mathieu Weill, the CEO of the French ccTLD registry Afnic, will be stepping down as of 1 May. In an announcement today on the website for the French country code top level domain, it notes he “has been appointed to other duties as from 1 May 2017.”
In his place as of 1 May the current deputy CEO, Pierre Bonis, will take on the role of Acting CEO while a search is undertaken to replace Weill.
The announcement comes just days after Afnic announced it has been awarded the right to operate .fr for another 5 years.
Weill was appointed CEO of Afnic in July 2005. During that time, according to Weill’s LinkedIn profile, .fr has grown from 300,000 to 3 million domains under management, improved customer satisfaction and technical performance, contributed to and implemented a complete rewrite of the legal and regulatory environment, acquired customers for 17 new gTLDs, launched the Afnic Foundationfor Digital Inclusion and led a full review of legislation and regulations for the domain sector.
He has also been a co-chair of the working group on enhancing ICANN's Accountability since 2014 and undertaken numerous other activities, mostly within Europe.
Marking the departure of Weill, the Afnic Board of Directors unanimously hailed the work he has accomplished since 2005 as head of the association in a statement on their website.
Mathieu Weill's work resulted in strong growth for Afnic during that period according to the statement, enabling the association to enhance its expertise, diversify its activities, and gain broader recognition both in France and on the international market. Mathieu Weill successfully oversaw those major changes by involving both the staff of the association and all of its stakeholders.
Afnic's Board of Directors will launch a call for candidates for the position of CEO and will select one or more independent firms of consultants to support it in the open process.
Afnic has been awarded the right to operate the .fr ccTLD for another 5 years, the registry announced.
In December 2016 .fr passed the 3 million domain name registrations mark, just days after the Italian country code top level domain, .it, passed the same mark.
In a decree dated 5 April 2017 published in the Official Journal of the French Republic, Mr. Christophe Sirugue, French Minister of State for Industry, the Digital Sector and Innovation, has appointed Afnic as the Registry for the .fr TLD for a term of 5 years from 25 June 2017.
“We are delighted by this decision which rewards the commitment and work of the teams and members of Afnic, who have allowed us to meet our commitments to make .fr a secure, simple and competitive namespace. With growth close to 30% since 2012, the .fr is one of the 4 most dynamic TLD suffixes in Europe and ranks as one of the top 10 in top-level domains worldwide. The .fr now represents a community of more than 3 million online successes,” said Mathieu Weill, Afnic CEO.
Afnic will continue to promote the .fr as a key partner in ensuring the online presence of SOHOs / SMEs, supporting digital solidarity and making the voice of France heard at the international level.
For the next 5 years, Afnic has set itself the goal of helping the one million French SOHOs / SMEs still absent from the Internet get on-line. Since 2012, the Réussir-en.fr program has been helping them begin their digital transformation and develop their online presence with business diagnostics, tools and practical advice.
A non-profit association committed to combat digital exclusion, Afnic donates most of the profits from .fr to the Afnic Foundation for Digital Solidarity, created in 2015, which financed 35 projects throughout France as of its first operating year in 2016.
A week or so after the Italian ccTLD .it reached three million registrations, the French ccTLD reached the same milestone.
It means the French country code Top Level Domain (ccTLD), today with 3,005,270 registrations, is probably the tenth largest ccTLD behind .it given the latest Verisign Domain Name Industry Brief for the end of June, discounting .tk (Tokelau) due to it giving away its domain names and the large amount of phishing spam and scams using the ccTLDâs domains.
The .fr grew by 2.1% in 2016 and the registry says simplicity, attractiveness and trust are the main reasons for its success.
“Registering a .fr domain name is one of the keys to a successful online presence for companies and individuals alike,â said Mathieu Weill, Afnic CEO. âTo support the development of their business on the Internet, Afnic has set up the RÃ©ussir-en.fr program (rÃ©ussir-en.fr), and intends to continue its efforts to make France a European leader in online presence.”
.fr domain names are available for registration to any person or business with a mailing address in the European Union.
Afnic donates 90% of the profits generated by .fr to its Foundation for Digital Inclusion(fondation-afnic.fr) which funds field projects to make the Internet accessible to the greatest number of people and to reduce digital exclusion throughout France.