Price Increase is Bad for Registrars
Like most others in the domain investment business, I read the news about the Uniregistry price increases on Domain Incite and Domain Name Wire yesterday afternoon. As the owner of fewer than 10 domain names that are new extensions, the price increase will not directly impact my business. The businesses most impacted by this will be domain name registrars who will have to pass along the price increase to customers.
I would imagine that domain name registrars are going to be tasked with informing customers of the large price increase. From my perspective, it would not be fair for these registrars to simply send out a renewal reminder email to registrants and sort of bury the fact that prices for some new domain names are going way, way up. I think they are going to have to make sure domain registrants know that the prices of some domain names will be rising (dramatically).
Unfortunately, the domain name business is not exactly transparent. Even if GoDaddy and other domain registrars explain that the upstream registry raised its prices, domain registrants are still going to have to pay GoDaddy, and they will likely be upset with GoDaddy if they care about their domain names. Once domain registrars begin sending these notification emails, recipients may worry about other new extensions as well, even those not currently impacted by the price increases. This is not good for the new gTLD business, particularly the domain registrars whose customers will face these dramatic price changes.
Another area that could cause some reputational damage to domain registrars is when it comes to lengthy renewals in advance of the price increase. As far as I understand, registrants will be able to renew domain names at current prices for up to 10 years before the price increase occurs. Sounds decent, right? As a registrant, I might feel like the registrar is scamming me when they tell me the price is going up to $xxx/year but I can pay for 10 years now at the current rate. This could be a tough pill to swallow for registrants.
The only silver lining I see is that there probably aren’t a huge swath of registrants that will be impacted. Based on Frank’s comment on Domain Incite regarding the rationale for the price increase, it is likely that there are relatively few people and companies who will see a huge increase. It really stinks for businesses who will face a huge price increase, but I would think there are relatively few that will be impacted.
People who registered domain names in new extensions to save money may be forced to make a hard decision about renewing or rebranding. Not good for them and not good for anyone in the domain name business.
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