ICANN corporation has published a draft of its budget for the following fiscal year. The document attracts attention mostly because the expectations concerning the revenue from new gTLDs has fallen dramatically. For example, it is supposed that by the end of the current fiscal year (which ends on June 30) ICANN will get only $300 thousand from transaction fees. Previously it was predicted by the FY 2015 budget that the sum would be $1.2 million. So the prediction is down 75%.
Transaction fees are paid for the registration of the new domain names, registration renewal and domain transitions between registrars. Only domains with over 50 thousand of such transactions during the year pay these fees. At the moment only 14 out of 522 delegated new gTLDs have more than 50 thousand registered names. Altogether, according to ICANN, transaction fees are only paid by 17 registries.
Also ICANN corporation demonstrates more than moderate expectations concerning registration renewals. According to the draft budget the renewal rate in the new domains will be around 50%. This is a very low number, traditionally the norm is about 70% and more.
«The example of already launched zones showed that the number of registrations in many of them is significantly lower than the applicants initially planned. This is partly because the potential market niche was not evaluated correctly, partly due to the insufficiently effective marketing campaign for the support of the zone. However, not all of the domains are registered for the owners needs. Some of them are bought to be resold or simply “for further growth”. Since the popularity of some zones is lower than initially expected, this has changed the plans for the secondary market. Probably many owners will not renew the names”, believes Marina Nikerova, senior deputy director at Technical Center of Internet.
