Is New gTLD Financing a Match Made in Heaven?

Of course, financing domain names is nothing new under the sun. Domain leasing and financing certainly happens each and every week, if not on a daily basis.

It’s not news to read about a person or company leveraging varying financing options to hopefully stake their claim to highly-valued virtual real estate.

The question I pose is whether or not financing of new gTLDs is likely the chasm that separates registries that fail and flop versus those that wildly succeed. 

For the record, any old domain can be financed — although not every domain should be simply because one could.

At large, new gTLDs have had no shortage of issues and challenges treading water since launching years ago.

Registries like .club and .vip, to name a few, are doing quite well with consistent growth of their ecosystem year after year.

There are also registries, like .xyz, that appear to do well by the numbers, yet insert a footnote detailing their early and heavy use of promotions and giveaways to boast tidal wave numbers. But those numbers will soon subside when given enough time too.

Then, there are registries churning out blockbuster numbers, like .top and .loan, yet their brand image is greatly impacted due to being classified as spammy new gTLDs.

For instance, take a look at what happens when typing the extension following by a space (pay close attention to spots #3-4 in each image — spam).

Nevertheless, there have been a number of record new gTLD sales (per Sold.Domains):

• Vacation.Rentals ($500.3K)
• Home.Loans ($500K)
• The.Club ($300K)

Even with a growing number of new gTLD sales, majority of the 1200+ new gTLDs introduced to their internet will struggle to realize a perpetual registration customer base.

Run-of-the-mill domain registration of new gTLDs have and will likely continue to rise by unsuspecting domain investors, but have not been and won’t be sustained when the good ole’ renewal grinch comes a knocking for payment.

Which brings me back to my question of whether or not new gTLD financing is a match made in heaven.

My belief is that new gTLD financing is and could be a viable business model for select and strict premium new gTLD domains as categorized by registries and not by the general public (of course).

I don’t believe new gTLD financing to be a sustainable business model over time. Of course, I could be wrong too.

If renewables are premium pricing, then yes it’s sustainable to a small percentage of offered new gTLD domains.

But if renewals are minimal cost or in line with legacy renewal pricing, then new gTLD financing for registries as a sustainable business model is a sunken ship in my opinion.

New gTLDs must not depend only on domain investors to remain afloat or as the crux of their business model. After all, domain investors are known to chase extensions that glitter, one to the next — with the latest being .app.

Legitimate businesses will have to not only complete financing a new gTLD domain, but develop a proven, profitable business using the same domain for the general public to increase the market share of registered new gTLDs.

Again, registry success is a numbers game where the past has made money based on low pricing and high volume, and premium prices were the icing on the cake, rather the cherry on top.

Although the tide is slowly changing as many opt for non .com digital presence, I believe new gTLD financing to be supplemental business for a registry and not primary business.

While new gTLD financing may assist in leading to greater exposure and development of premium new gTLD domains, I don’t think it’s a match made in heaven. Do you?

This article originally appeared on KickstartCommerce.com