Hopeful Week for New Extensions

Proponents of new domain extensions have waited a long time for much good news.  Yes, occasionally there were big sales announcements such as The.club and Home.loans sales, and some of the registries have reported a string of good value premium sales. However, the domain after market in new extensions has been slow throughout and almost non-existent for some extensions. While one should never place too much emphasis on any single day or even one week or month, I wonder if August  2018 might be viewed as when things changed for the new extensions.

The August 21 Daily Report

The August 21 NameBio daily report includes 16 new extension domain sales, with sales in 12 different extensions.  There were two sales in each of the .bid, .club, .date and .space extensions, and a single sale each in 8 other extensions.  I can't remember a day during the past year when so many different new extensions sold in a single day. To put it in perspective, on this day there were more new extension sales than .net, .info, .co and .io combined! Yes, critics will point out that most of these sales were at modest prices (average price was $254) and that it is just one day. For me, however, the more significant point is that this does not seem to be one isolated day, but rather an upturn in new extension sales during the past few weeks as I explain below.

The Last Week

NameBio allows you to easily search for data from a certain time period and extension class, so I searched for sales in new domain extensions (ngTLDs) for the past week (ending Aug 21, 2018).  It shows  that there were 44 sales in 23 different extensions, with an average price of $1809.  That is more different new extensions than sell in most months.

Here is the breakdown by extension for the week long period ending Aug 21, 2018.

• app 1
• bid 2
• club 3
• cricket 1
• date 2
• fun 2
• life 1
• loan 1
• men 2
• online 3
• party 1
• place 2
• review 2
• science 2
• space 3
• stream 1
• top 8
• trade 2
• webcam 1
• win 1
• world 1
• xyz 2

While some of these, such as .club, .online and .xyz have sales regularly, for a number of the extensions the sales reported this week are among the first.  For example, these are the first two .fun sales ever (at least in the NameBio database), while for .space these 3 sales represent almost 40% of all sales in the database (there are of course many others not in that database, either because of venue or dollar value). The only two NameBio recorded sales ever of .webcam have been in August, and this is the first recorded .stream sale in the database. This week saw the second and third highest  sales of all time in the .place extension. The sales in .review, .trade, .loan and .men, while not the first in those extensions, are among only a handful of prior sales.

It would appear that the new managers of the former Famous Four extensions are already having a positive impact on acceptance of the extensions. Many of their extensions, including .bid, .date, .loan, .men, .party, .review, .science, .stream, trade and .win, saw sales in this week. Spamhaus measured abuse is already way down in some (not all, for example .men and .date still have high levels of abuse) of the former Famous Four extensions - e.g. .science went from being among the worst just over a year ago to being broadly comparable in abuse to major extensions now (its score of 1.45 is a bit worse than .net and .com but much better than .us and .biz, for example).

It is important to realize that the average price was influenced by some high end registry .top sales, and any week, no matter how encouraging, could just be a statistical outlier. Nevertheless the news is encouraging (see also the section Other Promising Signs below).

Why Does The Value End Of Market Matter?

While high end sales (along with actual use) play a significant role in giving respect to new domain name extensions,  I think healthy new extensions also depend on a substantial number of aftermarket sales at the value end (which I interpret in the low to mid hundreds of dollars per sale).  Even in legacy extensions, many of the sales are at modest amounts, typical median prices of a few hundred dollars. Critics argue that end user sales are typically higher than this, claiming that NameBio data is biased by sales between domainers at venues such as GoDaddy Auctions. They argue that end user sales at venues not reporting to NameBio, or private sales, are usually at higher prices. I see logic in this argument, although without evidence it is difficult to be sure. No matter whether biased with respect to average price data, NameBio data clearly indicates that many sales do take place in the few hundred dollar range.

I don't think that it is healthy to have the only sales in an extension at the high premium end. The sales noted here, of many different extensions, sales that are for the most part not registry premium names, and across multiple venues, gives hope that the sputtering new extension aftermarket may finally be finding traction. The natural pattern is that if extensions become accepted through a multitude of sales in the $100 to $400 range that later values will go up for the better names.

A big part of the potential domain market is currently not purchasing, in any extensions, domain names.  If new extensions play an important role in serving these end users it would be positive for the entire domain market.  I am encouraged that there are other recent promising signs for the new extensions as outlined below.

Other Promising Signs

There were other recent promising signals for new extension proponents. I list a few below.

1. There has been at least one ngTLD sale each day for the last 30 days (starting July 24), with an average of 4.1 NameBio reported new extension sales per day.
2. The .club extension reported generally promising financial numbers.  This interview with  Colin Campbell of CLUB and DomainNameWire has insights on the overall picture as well as insights on the strength of premium domain sales in the Asian market and the success of selling premium domains with extended payment plans on Namecheap in particular.
3. A major investor and personality in the domain name field announced a major sale of a new extension when Andrew Rosener announced on Twitter the $15,000 sale of token.xyz on Sedo.  Andrew is a well known and  highly respected individual who usually deals  in legacy extensions, so I think this sale will influence others.
4. The .fun extension announced strength in real world use, which coupled with the first after market sales seen here is encouraging news of the health of the extension which recently reached 100,000 registrations as well.
5. The .app extension seems off to a reasonable start in terms of aftermarket sales. with 6 sales in the first few months since general availability and an average sales price of $4426.
6. With 24 major sales of new extensions (on NameBio) of $25,000 or more so far in 2018, the high end seems very strong currently.
7. Both the introductions of .app and .icu seem to have been successful when compared with previous new extension introductions.
8. As I pointed out, while the new extensions still represent a tiny amount  of major website use, they are growing in use faster than legacy extensions. 
9. While the difference will not be large, 2018 seems on track to have the highest total dollar value in new extension sales ever. 

Conclusions

I realize that this  could be a statistical blip, and we may return next month to a small number of new extension sales per week dominated by a few extensions. I am hopeful, however,  that this is an early sign of a brighter future.  I see inherent worth in the new domain extensions when a high value word is combined with an extension that meaningfully matches that word.  Some of the extensions that saw movement this week have good potential in my opinion. For example, .fun and .win are both ideal keywords to use as part of a domain name phrase. Extensions like .club, .online, .space and .xyz have already achieved reasonable actual use, and it is good to see them also being traded in the after market. App has a clearly defined role, emphasizes the importance of a secure environment, and will no doubt continue to grow in sales. Most of the new extensions are intended not as broad extensions, but for uses in specific niches.  As such it is important that we see sales at a range of prices in a variety of different extensions.  How bright is the future for new domain extensions? Only time will tell, but this has indeed been a good week!

Links:

• NameBio Daily Report Aug 21, 2018.
• NameBio database
• Previous monthly ngTLD sales report (July 2018)
• New management at former Famous Four extensions (Domain Incite)
• Colin Campbell of CLUB (Domain Name Wire)
• My look at the global domain market and needs
• DNJournal look at the Radix .fun extension
• Spamhaus TLD scores
• Website use and trends for different extensions
• Domain name phrases
• Our site NamesThat.win - thanks for visiting
• Permanent link to this blog post

Original post Aug 22, 2018.

Disclosure:  I am  not associated with NameBio, but would like to acknowledge their incredible database and their generosity to make it available to the domain community. My portfolio of domain names is mainly ngTLDs, as well as a number of .co, .com and .ca (and a few other country codes).

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