Capitalize on nTLD Market Uncertainty

There has only been a modest level of interest in the new top-level generic domains (nTLDs) over the past several years, and investment in them has been limited to the more adventurous brand marketers and domain name speculators.

For .COM alternatives to survive in the 'Net landscape, registries and registrars will need to get creative with their acquisition (and pricing) strategies and far more aggressive with their retention efforts - both of which could greatly benefit the majority of Web businesses.

Which of the new top-level domain names should digital enterprises invest in and which might be best to avoid completely? It is a dynamic market so the answer to this important question will vary from day to day (stay up to date on domain name news via Website Magazine's Domain Masters channel), but if these assets make sense in the context of a brand's broader operational and marketing initiatives, they are almost always a wise investment. Let's explore the initial promises of nTLDs, how those promises are being fulfilled (or not) and how to capitalize on the uncertainty of it all.

nTLD Promises

As nTLDs were slowly introduced, many were sold on the benefit these digital assets could provide as a viable alternative to .COM. There is no evidence whatsoever, however, that the nTLDs have been easier to help brands differentiate from the competition (must less optimize for the search engines) and so some brands simply aren't renewing.

The best (or perhaps most accurate) thing often said of the gTLD, however, is that they are quite creative in some instances and as a result can be very easy to recall for consumers - that goes a long way with brands. Google parent company Alphabet, for example, uses the .XYZ extension for its primary corporate site ABC.XYZ. Most of us would be challenged to name another brand that uses the .XYZ extension, of course, but remember there are hundreds of others that are useful in terms of providing contextual cues to users about what they might find when they will arrive (e.g., .NYC indicates a New York City address, .SUCKS indicates it's likely not an official brand page).

nTLD Pricing

The general lack of demand among the broader population of digital enterprises is likely to drive up prices in the near term - and in some cases, drive prices up significantly in order for the registries to cover their cost and make a small profit. The ultimate result of the price increases will likely be relatively major drops in the total number of registrations for these non-dot-com extensions - setting up a perfect supply and demand storm that some registries may never recover from.

Tucows, the Web's second largest domain name registrar, for example, will reportedly no longer offer nine of Uniregistry's nTLDs starting in Sept. 2017. The reason? You guessed it - the annual fees for renewal are scheduled to increase dramatically.

The registrar announced that it will no longer support those domains which are slated to have "exponential" price increases including .AUDIO, .DIET, .FLOWERS, .HOSTING, .PROPERTY and others, but will continue to offer others that will have smaller, more modest price increases including .CLICK and .TATTOO. GoDaddy also pulled its support for all of Uniregistry's domains initially, but has since added them back.

While the new top-level domains have their advocates and detractors, those who registered the assets do appear to be renewing them at rates similar to their .COM counterparts. The .VIP gTLD, for example, looks to have more than 60 percent of its first-month registrations renewed and could easily surpass 70 percent.

nTLD Predictions

While there is uncertainty in the domain name market today, an immense opportunity exists for those willing to invest strategically.

Web enterprises interested in the nTLDs should take advantage now by renewing or registering these extensions for a longer/extended period of time. Not only will there be a reduction in cost over the long term, but it could provide innovative brands a change to get ahead of the virtual curve.

For further insights into this evolving market, take a look at 20 non-COM domain names with the largest increases and decreases in registrations over the past year.