Price Increase is Bad for Registrars | DomainInvesting.com
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Price Increase is Bad for Registrars

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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.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (8)

    George Kirikos

    Given the massive expected domain name deletions, Uniregistry shall henceforth be referred to as Punyregistry. :)

    March 8th, 2017 at 11:38 am

    Konstantinos

    Registrars don’t have to notify customers and if they do it will simply be a newsletter that few will read like the .org price increases.
    Registrars will actually make more money and have very few people complaining.

    March 8th, 2017 at 11:43 am

      Elliot Silver

      IMO, they should email customers when prices are going up exponentially, otherwise they are doing their customers a disservice.

      Imagine someone who registered 10 names for $100 +/- and then getting a $1,000 – $3,000 renewal bill. I would be pissed, especially because I don’t usually pay much attention to renewal prices until after they are charged.

      In reply to Konstantinos | March 8th, 2017 at 11:46 am

    William

    The current debate about whether domains are property that can be owned or contracts for service raise some interesting questions regarding the price increase. If the courts decide domains are a contract for service, the service provider can simply charge whatever they want. But if registering a domain name creates an ownership relationship between the domain registrant and the domain name, I wonder if by selling something under the guise of a low renewal and then changing it after the fact couldn’t be considered operating in bad faith.

    Imagine buying a house from an HOA with a monthly fee to the HOA of 100 a month and then having them raise the price to 1000 a month after the first year. I’m not an attorney but it seems like this would trip some consumer protection laws.

    March 8th, 2017 at 12:27 pm

      kd

      William – very interesting points/questions you bring up! I wholeheartedly agree. If someone gave me a house for $100 a month, and when they gave it to me there was nothing stated about ridiculous price increases, but then all of a sudden that price jumps to $3,000 a month in the next year after I moved there, setup residence, changed my address… That does not seem just unethical, but could be borderline illegal depending on where you live and the laws surrounding this. I mean, who is to say it was not bad faith on the Neighborhood Association’s part? Who is to say that this was not ploy to get a bunch of people to move into this specific neighborhood? Even more, if I’m in a neighborhood where the prices rose, and the next neighborhood over is owned by the very same Neighborhood Association and their prices do not rise – this is totally an issue! If I were a registrar I would disassociate myself with such future problems and bad actors in the nTLD community.

      I’m shocked Frank / Uniregistry / North Sound Names took this approach.

      In reply to William | March 8th, 2017 at 1:32 pm

    JZ

    first step is to up the prices to try and make the gtld cover its costs, second is to shut it down when it doesn’t. no surprise really.

    March 8th, 2017 at 1:15 pm

    Snoopy

    What can you say? Registrars are selling a pretty shoddy product to start with even listing these names. They did know about the lack of control control. Lets see if the start pulling the pin on some extensions.

    March 8th, 2017 at 5:49 pm

    gTLD.club

    I think it is fair play to explain the increase of price.

    March 9th, 2017 at 9:59 am

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