Innovation and gTLDs


process and sales innovation by registries and registrars has been overwhelming for some people. What types of innovation are we seeing?


Product innovation A number of


registry operators are allowing


trademark owners to pay to ‘block’ domain names from being registered if they contain their trademark terms. T e domain name term will not resolve or be in the DNS, so is therefore not a domain name.


For trademark owners, this may seem an interesting type of innovation, since registering domain names defensively is a costly and complicated business. However, blocking a name isn’t quite as fi nal as its title implies. For example, another trademark owner with the same mark in a diff erent market sector can register a blocked domain, overriding the block. Once the name is registered, the trademark owner that issued the block loses all control over how the domain name is used, potentially forever.


In addition, a blocked name is a non-producing asset. Registrars cannot provide supporting products (such as web hosting), there is no economic activity associated with the brand behind that domain name, and the trademark owner loses any chance to drive traffi c and create asset value from a website using the domain name.


My advice to brand owners is straightforward: if your goal is to increase the value of your trademark online then register your marks in sunrise periods and use them to create value. If your goal is simply to prevent others from using your mark on the internet, blocking may possibly meet your short-term requirements.


Process innovation


T e domain name industry has an accepted registry launch protocol. First comes the sunrise period (typically 30 to 60 days), which aff ords rights owners preferential access to register their marks as domain names. A landrush phase (usually 30 days), during which domain names are registered by early adopters (usually at a premium price), follows. Finally, comes general availability, when domain names are registered on a fi rst- come, fi rst-served basis.


One example of process innovation by some registries is what is known as ‘early access’, where a short landrush phase is introduced (usually seven days or less) with a premium price of, for example, $12,500 per name on day one, $3,000 on day two, $1,200 on day three, etc.


It is a bit early to say whether this novel landrush model will gain enough traction with brand owners and domain name speculators to become the norm, but it doesn’t look likely.


www.trademarksandbrandsonline.com


“WHEN ADVISING ON A REGISTRATION STRATEGY, IT IS IMPORTANT TO PICK THE gTLDs THAT LOOK AS THOUGH THEY WILL MAINTAIN OR INCREASE THEIR VALUE OVER TIME.”


Position innovation


A .com domain typically costs around $10 per year. New gTLDs are more expensive, in the region of $25. However, a few registries have annual domain name renewal prices of around $1,000 to try to uphold the exclusive nature of the TLD. One new gTLD has an even more innovative positioning. It has registration and renewal fees for the fi rst two years comparable to the average new gTLD, but in year three the renewal fee shoots up to above $30,000 in order to encourage the recycling of domain names.


How well has this innovation gone down with the domain name industry? To date, only two of the 1,000 ICANN-accredited registrars have signed up to market the gTLD. Maybe the restricted route to market will support such a novel business model, but only time will tell.


Paradigm innovation


Some registries have spent a huge amount of time, eff ort and resources building their own back- end registry systems. Others have been making similar eff orts to provide registrants with a ‘soup- to-nuts’ experience by bypassing the registrar channel entirely and allowing them to benefi t from undiluted revenues and lower operating costs. For example, some registries have set up their own ICANN-accredited registrars


to promote their gTLDs directly to consumers as their own registrar.


Only the very large portfolio gTLD applicants may have the momentum and funds to make this approach work. However, the registrar channel is very well established and it will be an uphill struggle for registries adopting this approach. Not being supported by the registrar channel will seriously impact the early success of any new gTLD, no matter how great it is.


T is may mean we will see some gTLDs run out of steam sooner rather than later. Some registrars are already being very picky about which registries to


Andy Churley is an expert in gTLDs, brand protection and IT security, responsible for all the fi rm’s strategic and operational marketing activities. With more than 20 years of experience in marketing and product management, Andy holds a BEng in engineering and a Master’s degree in business administration. He is a chartered engineer, a European engineer and is a chartered IT professional.


Trademarks & Brands Online Volume 3, Issue 2 47


support. T ese ‘unadopted’ strings are more likely to be absorbed by large portfolio applicants or simply fade away. When advising on a registration strategy, it is important to pick the gTLDs that look as though they will maintain or increase their value over time.


One of the oſt en-overlooked indicators is not just whether the gTLD is a ‘strong’ term and a match with a brand owner’s business, but who is operating the gTLD. Large portfolio applicants typically have the resources as well as the expertise to build stronger gTLDs than single applicants in the long term. Strong registries, with a strong distribution channel, are a good indicator of long-term success.


It’s about timing


Undoubtedly we will see a whole host of innovations in the domain name industry over the coming years, benefi ting registries, registrars and registrants. However,


the challenge with


innovation is as much about timing as it is about the innovation itself.


I regularly ask myself: “Is now the right time for radical innovation in this industry?” Invariably, I fi nd myself answering in the negative. I believe there will be a time for fundamental innovation in the domain name industry, but I do not believe that time is now. 


Andy Churley is chief marketing offi cer at Famous Four Media. He can be contacted at: achurley@famousfourmedia.com


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