As the next round of ICANN’s New Generic Top-Level Domains (gTLD) Program approaches, industry experts are reflecting on the critical lessons from the first round that new applicants must learn. A key lesson involves the relationship between new domain registries and the registrars that sell their names.
During the program’s first phase, many ambitious applicants underestimated this dynamic. Some assumed that names in their new domain zones would automatically be listed by all major registrars. Others viewed registrars as unnecessary middlemen and hoped to bypass them by building direct relationships with their registrants.
Both approaches proved unsuccessful. The first failed because large registrars have extensive market experience and understand that promoting new domains often lacks a clear return on investment. They typically require financial incentives to actively cooperate. The second approach failed because it goes against the established consumer behavior model that has dominated the domain market for years. When someone wants a domain, they go to a registrar. Changing this habit requires either massive investment or a significant amount of time – two things new market entrants usually lack.
With the next round of the New gTLD Program on the horizon, the situation remains unchanged. If anything, registrars have become more cautious, having learned from the first round’s experience. Michele Neylon, CEO of the Irish registrar Blacknight, stated in a recent interview:
“To be honest we have decided that we will not be onboarding any of the next round TLDs unless they are incredibly compelling and using backend systems we are already integrated with. This is based on our spending way too much time, energy and resources trying to market “new TLDs” since the 2012 round. We haven’t been able to convince people and businesses in any serious volumes to try new domain extensions. Instead, we have seen a reasonable growth in registrations of “legacy” domains and ccTLDs. So from a pure ROI perspective it’s more prudent for us to simply wait and see.”
As Domain Name Wire reported, while Blacknight is not the biggest registrar, its sentiment is far from unique – representatives from many other registrars have recently voiced nearly identical concerns.
