Some voices blame the new gTLDs for the weakness of the domain market recently, but some others do not agree. The new GTLDs are the treasures for some investors, but rubbish for the others. The standpoint dominates the view.
The Chinese Love New GTLDS most?
According to the data from Ntldstats.com, the retention number of new gTLDs has broken through 1.6 million, 54% of the holders are Chinese. On the top of the new gTLDs domain name register ranking there is .xyz, the new gTLD used by Google, followed by .top and .wang. On the chart of registrant statistics, Chinese have taken up 7 seats out of the first 10 places. In the top 100 registrant, the number even reached 83%. So the new gTLDs are true love to Chinese?
The uniqueness or the particularity all cannot account for the love of new gTLDs.
Venture in domaining; domain in China. Whatever the correctness of the first half of the sentence, I am sure the second half is true. The data from DomainNameSales.com indicates that in the year of 2016, 57% of their buyers are from China. The same proportions are also indicated in the report from Escrow and Sedo. The bloom of the internet in China really brings big opportunities indeed. The support from the government and the big market base all show the great possibility of the market. But it is also obvious that the domain market is overheated, and the results appear just like the rocks in the ebb tide.
What is the reason for the speculation fever in China? The big economic environment must be mentioned here. After forty years of Chinese Economic Reforming, the economy in China developed in high speed and has accumulated great fortune. But the extensive model of economic growth has already reached the bottleneck. The investment in the low end industry is no longer profitable due to the excess productivity capacity. But the intensive technique resources required by the high end industry or innovation are hard to reach for most investors. The speculation pervades in the hard years of industrial investment. From apples to Tibet mastiffs, from herbal medicines to jades, the hot money flows into the different markets in turns, manifesting the fever of speculation with excess liquidity under inflation.
The virtual assets like domain names are the best choice for the speculators since the transaction can be processed online without the restrictions of location and spaces. The high ROI is attractive, but the high thresholds of premium domain names are daunting. The new gTLDs might be a new field for some investors.
The Big Winner behind the Curtain
Until 21th Apr, the number of new gTLDs is 974 and is still increasing. The number of registry is 412. ICANN is the top administration bureau of domain names with the whole domain name resources. One of its many functions is to administrate the registries and authorize the launch of top level domain names. The organization must make application to ICANN for developing a new gTLD and pay a great amount of fee.
What is the impact of new gltds to the internet world? For the end users, the new gTLDs enable more options. For the big companies and organizations, the new gTLDs empowered them to consolidate the brand image and reinforce the cyber security by using their own top level domain names.
In the eco-system of domain name market, the shareholders include ICANN, the registries, registrars, end users, investors and relative service providers. ICANN holds the resources of domain names, and allocates the recourses to the registries and registrars. The profits of the investors mostly come from the activities from the secondary market.
If the new gTLDs succeed and are accepted by the end users, more organizations will apply for the qualification of registry. The profits will flow into the primary market or even upper level. At that time, the gTLDs will be more diversified, and provide more choices for the users. The uniqueness of the domain name will be impaired with the increase of substitutes.
On the contrary, if the end users do not accept the new gTLDs, registries hoping to benefit from the primary market will not be able to get profit and finally stop launching new gTLDs. Then the scheme of new gTLDs will be a flash in the pan.
It is the end user who dominates the game. The fate of the new gTLDs might change the rule of the game.
The Sight of the End Users
The .com domain names still have the loyalty of the market. No matter in the price or the retention amount, .com domain names have taken the top spot. Regardless of the number of new gTLDs, only 160 new gTLDs have a retention amount over 10k. More than 900 new gTLDs have the retention amount less than 10k. Besides, website owners also care about the traffic ranking of the domain name. From this point of view, the old domains have accumulated an advantage that the new ones cannot compete.
The registries of new gTLDs also put great effort in the promotion of the new gTLDs. The .xyz of Google is now the top of the new gTLDs. From the data of CSC digital brand service, new gTLD domain names show great potential in the Alexa Ranking and end user purchase.
The fittest will survive. Maybe only time can tell the result of new gTLDs. No one has expected the wide application of domain names 31 years ago, when the first domain name Symbolics.com was registered.
In a Nutshell
The investors care more about the activities in the secondary market. But from the point of ICANN, its main function is to provide secured and suitable service to the market.
The speculation of new gTLDs is the result lead in from the overinflated price of the mainstream domain names. This is a self-adjust model of the domain market. If the price of mainstream domain name is beyond the reach of the market need, the new gTLDs will prevail into the market with more reasonable prices with faster pace.