Do Domain Prices Matter?
September 18th, 2008
Back in the bad old days, Network Solutions, as the monopoly provider of gTLDs, charged $100 for two years for a new domain name registration. (After a court ruling against a portion of this fee as an “Internet tax,” this was lowered to $70 for two years.)
People wailed and gnashed their teeth about the $35/yr fee. Emergency committees convened, acronym-heavy alliances were formed, and with much grunting and bellowing ICANN was born, which is how we ended up with the familiar gTLD registry-registrar split.
But does domain name pricing really have an effect on new registrations? Do high prices discourage new registrations? Sure, pricing impacts the domainer with tens of thousands of names. But how about people or businesses who register 1-20 names? Do they really care if a new domain costs $10, or $50, or $100?
The evidence says: not so much. Around the world, registration prices diverge wildly without any clear correlation to volume (which admittedly can be difficult to determine). “Local Internet communities” are not manning the barricades to get lower prices, though no doubt there is grumbling. I see no movement toward a standard domain name price across different TLDs, and very little complaining from registrants. With a few sky-high-priced exceptions (see for instance .TT below), it appears that price is not a determining factor.
In the gTLD world, a registry doesn’t determine how much the public pays for a domain. That’s up to the registrars. Upcoming gTLDs can decide how much to charge the registrars, although they may be howled down if they charge much more than the $6.86 per name new price that VeriSign negotiated from a supine ICANN. (Which shows only that registrars care about pricing, even if registrants don’t.)
But in the ccTLDs, with some exceptions, the registries are also the registrars, and they exercise monopoly pricing. A recent posting to the ccNSO discussion list by Erick Iriarte of LACTLD provided the prices in the South American region, below. It’s as if everyone was throwing darts at a pricing chart, blindfolded.
Note: Because some TLDs have 2-year minimums, all prices are for 2 years
| Country | ccTLD Name | Notes | 2-yr price (US$) |
| Argentina | .ar | 0.00 | |
| Bolivia | .bo (1) | 3rd-level | 76.75 |
| Bolivia | .bo (2) | 2nd-level | 416.63 |
| Brazil | .br | 3rd-level | 37.41 |
| Bahamas | .bs (1) | 2nd-level | 500.00 |
| Bahamas | .bs (2) | 3rd-level resident | 150.00 |
| Bahamas | .bs (3) | 3rd-level foreign | 300.00 |
| Belize | .bz | 34.00 | |
| Chile | .cl | 39.60 | |
| Colombia | .co | 90.17 | |
| Costa Rica | .cr (1) | 3rd-level | 45.00 |
| Costa Rica | .cr (2) | 2nd-level | 180.00 |
| Cuba | .cu (1) | 2nd-level, state | 16.14 |
| Cuba | .cu (2) | 2nd-level, resident | 403.59 |
| Cuba | .cu (3) | 2nd-level, foreign | 1200.00 |
| Cuba | .cu (4) | 3rd-level, state | 16.14 |
| Cuba | .cu (5) | 3rd-level, resident | 403.59 |
| Cuba | .cu (6) | 3rd-level, foreign | 700.00 |
| Dominican Republic | .do (1) | non-resident | 70.00 |
| Dominican Republic | .do (2) | resident | 50.66 |
| Ecuador | .ec (1) | .ec, com.ec, net.ec, etc., resident | 60.00 |
| Ecuador | .ec (2) | pro.ec, med.ec, etc. | 36.00 |
| Ecuador | .ec (3) | .ec, com.ec, net.ec, etc., foreign | 84.00 |
| Grenada | .gd | 50.00 | |
| Guatemala | .gt (1) | resident | 40.00 |
| Guatemala | .gt (2) | non-resident | 60.00 |
| Guyana | .gy | 49.10 | |
| Honduras | .hn | 100.00 | |
| Haiti | .ht (1) | 2nd-level | 126.96 |
| Haiti | .ht (2) | .shop.ht, .firm.ht, .info.ht, .adult.ht, .net.ht, .pro.ht |
38.09 |
| Haiti | .ht (3) | .org.ht, .med.ht, .art.ht, .coop.ht | 30.47 |
| Haiti | .ht (4) | .pol.ht, .asso.ht, edu.ht, rel.ht, .gouv.ht | 25.39 |
| Haiti | .ht (5) | .perso.ht | 12.70 |
| Cayman Is. | .ky | 0.00 | |
| Saint Lucia | .lc (1) | 2nd-level local | 75.00 |
| Saint Lucia | .lc (2) | 3rd-level local | 50.00 |
| Saint Lucia | .lc (3) | 2nd-level, foreign | 150.00 |
| Saint Lucia | .lc (4) | 3rd-level, foreign | 100.00 |
| Mexico | .mx | 66.00 | |
| Nicaragua | .ni | 90.00 | |
| Panama | .pa (1) | except .net.pa | 70.00 |
| Panama | .pa (2) | .net.pa | 100.00 |
| Peru | .pe | 68.36 | |
| Paraguay | .py | 99.56 | |
| El Salvador | .sv | 45.00 | |
| Trinidad | .tt (1) | 2nd-level local | 500.00 |
| Trinidad | .tt (2) | 2nd-level, foreign | 1000.00 |
| Trinidad | .tt (3) | 3rd-level local | 50.00 |
| Trinidad | .tt (4) | 3rd-level, foreign | 100.00 |
| Uruguay | .uy (1) | .com.uy | 51.97 |
| Uruguay | .uy (2) | all others | 50.00 |
| Venezuela | .ve | 23.23 |
This twisted tangled mess convinces me that these registries are under no pressure to reduce or standardize pricing. Prices differ substantially between different ccTLDs in Europe and Asia as well.
A confirming (and perhaps more weighty) piece of evidence comes from a study by Matthew Zook done for APTLD (PDF). Zook, in his study of several ccTLDs, determined that registration volumes correlated to GDP, registrations in .com and .net, and (surprise!) policy. Policy means stuff like letting people register on the second-level, allowing more than one registration, lack of restrictions on who can register, etc. See page 7 and following of his report.
His conclusion: “Price of domain is NOT significant.” (Original emphasis.)
Anyone have any ideas on why this is so?
Tags: Network Solutions, Internet tax, Erick Iriarte Ahon, LACTLD, .APTLD, Matthew Zook, ccTLD, gTLD, ICANN, domain name price
After just writing that no-one was complaining about high domain name prices in ccTLDs, I ran across (by way of the NameBay blog) an article in Les Afriques, an African francophone finance magazine, entitled “Pourquoi l’extension de domaine .sn est-elle si chère?” (”Why is the .sn extension so expensive?”). An excellent question; I’m glad to see the press getting involved.
Antony | September 18th, 2008 at 1:22 am
Antony
There was another article on CircleID about pricing recently which I mentioned over on my domain blog:
http://www.isquattedyour.eu/2008/09/05/crazy-cctld-price-hikes/
Another question that should be asked is how the pricing affects development of ecommerce etc., in the affected countries. Can a link between higher pricing and lower levels of development be made? If barriers to domain registration in a ccTLD exist what do people do? (I have my own theories and experiences on this :) )
Michele
Michele | September 18th, 2008 at 5:29 am
A correction in the name is: Erick Iriarte
Erick Iriarte Ahon | September 18th, 2008 at 10:23 am
You can find more information about prices in:
http://www.latinoamericann.org/modules.php?op=modload&name=News&file=article&sid=1607&mode=thread&order=0&thold=0
And the montly report of domain names in LAC:
http://www.latinoamericann.org/modules.php?op=modload&name=News&file=article&sid=1688&mode=thread&order=0&thold=0
Erick Iriarte Ahon | September 18th, 2008 at 10:25 am
Hi Erick, I apologize for the misspelling, I copied it from an email someone sent me. Now fixed in the post. And thank you for the interesting links.
Antony | September 18th, 2008 at 12:17 pm
Antony:
The work that Matthew Zook did was for APTLD (www.aptld.org) - not .Asia.
It was presented at our Members meeting last year in Bangkok.
Don Hollander | September 18th, 2008 at 1:44 pm
Don,
Er, right you are. Sigh. Fixed in the text. Thanks for the correction.
Antony | September 18th, 2008 at 1:48 pm
Antony:
Another relevant aspect is that there is no single business model solution for every TLD.
We’ve spent several years, meetings and workshops explaining that there is no “one size fits all” TLDs from a policy perspective, but we have to emphasize that the unrestricted gTLD business model CAN’T apply to everybody.
Oscar
Oscar Robles | September 18th, 2008 at 2:56 pm
.DO is Dominican Repiblic not Dominica, which is .DM
Jothan Frakes | September 18th, 2008 at 3:30 pm
Oscar - you’ll get no argument from me on that one. It is, however, interesting to see what the results of different policies are, for those who are making decisions about these things.
Jothan - Another oops. Thank god for free fact-checkers. This has been fixed.
Antony | September 18th, 2008 at 4:16 pm
Now that the trivia in your post is sorted, let’s look at your substantive question.
Why doesn’t price matter? Because the name, (apart from those who trade or speculate or persue nefarious activites with names) is only a means to and end for the registrant - and it is generally a small portion of the cost of the solution that they are offering.
They key factors are effecitvly the wealth of the country and their ICT literacy.
Yes, the extremes, the price will matter. If you have a developed country with an IT literate community, then an expensive price will shift people to the generics. But, if there’s not a huge difference between COM/NET/ORG and .xx, then people generally have some allegience to their homeland.
Don
Don Hollander | September 22nd, 2008 at 3:39 am
Why are .biz domains so expensive now? They aren’t that popular of an extension are they?
Chicago DUI Lawyer | January 7th, 2009 at 3:58 pm