ICANN expects that during next year the number of domain registrars will significantly decrease. If now the total number of registrars is 3000, in the upcoming 12 months approximately 750 will leave the market. ICANN Vice-President Cyrus Namazi mentioned this while talking about next year’s budget during the corporation’s meeting in South Africa, which took place recently.
Earnings from registrars are an important part of budget’s revenue, explains Domain Incite. Only accreditation of registrars in ICANN costs US$4,000 per year; moreover, companies pay quarterly contributions (usually no less than 800-1000 dollars). This is why ICANN’s interest in the number of registrars is quite understandable. According to Cyrus Namazi, the market of domain registrars’ services has grown too much. ICANN VP explains it as follows. 3000 existing registrars belong to approximately 400 large companies; big ones like Web.com (Namejet and SnapNames), Pheenix and TurnCommerce (DropCatch.com) own almost two thirds of all registrars. Such business model makes big companies pay a lot of money to ICANN; however, allows creating a huge number of connections with registries (first of all with Verisign, the registry for .COM). These connections in turn increase companies’ chances on registering potentially valuable names – sometimes in a fraction of a second after it becomes available.
However, Cyrus Namazi believes that such business model has outlived itself. The number of potentially valuable domain names is limited and there are too many actors going after them. This is why decrease in the number of registrars ICANN considers inevitable.
