Minds + Machines

Minds + Machines is changing its annual minimum registry fee for new TLDs from $50,000 to $100,000 as of today — still well below what others are charging. We will continue to honor our previous $50K minimum for existing customers, as well as for prospective customers who were quoted the earlier price and are engaged in good-faith discussions with us.

As before, the annual fee is calculated from the time when the first domain name is sold to the public, in other words from the beginning of your Sunrise period. (Watch out — some people start charging from the time you sign a contract with them.)

Our $1.50 per name price remains unchanged. Under the new pricing, you will get up to 66,666 names for the $100K minimum, after which you will pay $1.50 per name.

The new pricing is due to very significant demand from prospective customers who have interesting business models that are unlikely to exceed the minimum amount in the short term, but which will require us to do a lot of work handling their accounts.

As with all our fees, the minimum can be modified or waived if you have a TLD project that, in our estimation, benefits the Internet or a worthy community or is just a Good Thing.

For more information, contact me at avc[at]mindsandmachines.com.

Governments seem to be coming around to the idea of new TLDs. A committee in the Scottish Parliament approved the .sco application after receiving assurances from the government it was pushing for an application to be submitted to ICANN this year. The parliament’s Public Petitions Committee vote was unanimous.

Scotland joins New York, Paris, and Barcelona as places where the relevant government has announced support for their own top-level domain. (There may be others, please leave a comment if so. )

Define and Understand what represents success in your new gTLD Registry

With a new gTLD registry, it’s important to define your mission, and not all missions will be identical.

For example, a new city gTLD will have a different charter than a new corporate gTLD, and those two will not share much in common with a new gTLD registry that is focused around technical innovation using the gTLD as an application (as in .TEL, for example).

5 Key Metrics

At a high level, there are 5 key metrics to gauge ‘success’ of a new gTLD registry:

• Quantity of Registrations
• Quality of Registrations
• Commercial Profitability
• Adoption and Use
• Service to Community

For example, .COOP is a gTLD with a very specific community to serve. They have a low number of overall registrations, but they are successful because they provide high quality service to their community. For .coop, quantity of registrations are not a crucial indicator of success, while service to their community is.

.MOBI has a different metric of success. They have achieved a high quantity of registrations, the quality is reasonably high, there is adoption and use, they are commercial profitability, and with their enhancements like instant mobilizer, they also seem to be serving their community.

The point is that different TLDs will have different metrics. You need to define this ahead of time, even if you’re not going to publicly identify the priorities. The words I’m using to describe them are common in the industry, and when you articulate your vision to partners, public, or press, you’ll benefit from having a common vocabulary and understanding of the terms.

Let me add some definitions to these metrics.

Quantity of Registrations in your TLD Registry

The most common metric we see in our commercially-oriented world is the number of domain name registrations, or zone file size. This is typically publicly accessible data because ICANN insists on it, and after a certain quiet period the reports that are submitted to ICANN are released as public records.

New registrations bring income, which leads me to the next point…

Profitability

Not all gTLD registries are for-profit; some will operate as not-for-profit organizations. But the term “profitability” applies in either case, because either structure needs to have financial health.

Routers and servers and competent staff cost money. Even if you operate in a cost-recovery model, you need a financial model for the TLD gauge its success.

Profitability for existing commercial TLDs is hard to measure because they don’t share their numbers. But you can make reasonable guesses from the number of domains they have, and then work backwards from their known wholesale price to make a reasonable estimate of their gross income.

Whether it’s characterized as a for-profit or not-for-profit, a profitable TLD is better able to serve its community, whether in the form of financial grants or contributions, sponsorships or other (even direct) donations that flow from some or all of the proceeds.

Quality of Registrations

Quality of registrations can be measured by registration length, volume of deletions, and overall renewals.

Many existing gTLD registries do crawls around the Internet to obtain information about what people are doing once they register a domain, in order to understand the quality of their registrations. If a domain has unique content on a web site, for instance, this is a good indication that the domain will be renewed. The same is true if the web site is updated frequently. A parked page with no changing content, on the other hand, has a higher likelihood of not being renewed. Other indications of quality are good security, uptime, and ‘hygiene’ (low occurrence of SPAM/Phishing/Botnets).

Adoption and use

Ultimately the adoption and use of domains is the true measure of success for a TLD. If this is happening, things are most likely going well. Flagship registrants (for instance, important brands) and key web sites are a great indicator, as is volume of web traffic to sites within your TLD.

Serving your Community

Every TLD serves a community, even if that community is just Internet users in the largest sense. It’s important to define your community and then make sure that your marketing efforts, your policies, and the actual operation of the TLD is focused on serving it. That’s how you’ll keep renewals strong and new registrations going at a good rate.

So put some time into clarifying the mission is for your new gTLD Registry. By understanding these points early on and using some of the vocabulary I’ve used above, you’ll be able to communicate with potential partners and to better articulate your vision for your new gTLD Registry.

If there are any questions please feel free to comment on the Minds + Machines website or use the contact form to reach me.

-Jothan

We’ve added a new ICANN timeline for new gTLDs — colorful, graphical, suitable for framing. It’s somewhat approximate during/after the ICANN approval stage, because we don’t know how long that will take (it will depend on how many apps they get), and because your Sunrise and Landrush periods may be different (more or less lengthy) than what we have here.

Our latest timeline is always available on the timeline page.

Comments/corrections welcome.

Preview below:

The World Intellectual Property Organization (WIPO) asserted on Monday that new gTLDs from ICANN would unleash a global crime wave. This dire warning was bolstered by an astonishing statistic: a whopping eight per cent (8%) increase in UDRP complaints from 2007 to 2008!

But WIPO’s press release tells only a very little of the truth. Astonishingly, the UDRP system actually works pretty well. Judging by the data, it is not only effective in policing cybersquatting, it also discourages new cybersquatting. In fact, compared with the growth of domain names, cybersquatting allegations have actually decreased every single year since the UDRP was implemented.

Let’s compare WIPO’s claim that the sky is falling with the actual data, helpfully provided by WIPO itself.

WIPO shouts Record Number of Cybersquatting Cases in 2008, and calls the introduction of new gTLDs a “genuine concern for trademark holders.”

WIPO’s press release was picked up by many in the echo chamber, and various reporters and pundits, being deeply steeped in all matters relating to domain names, contributed to the total body of knowledge by opining that maybe ICANN was being a bit hasty with this new gTLD thing.

This predictable naivete from the press is why people bother to issue press releases in the first place, and I can’t fault WIPO for using tools so readily at hand.

But what do WIPO’s own statistics actually show? When examined as a function of registered domains, they show that (alleged) cybersquatting is getting to be LESS of a problem, not more. The rate of growth in UDRP filings consistently lags behind domain name registrations, and as a percentage of names registered, UDRP filings have gone down in every year since ICANN’s inception.

Here’s a little data sheet, a combination of WIPO’s stats compared to gTLD stats (.com, .net, .org, .info, .biz). This data compares all WIPO’s UDRP filings, including ccTLDs (13% of their filings last year), compared to just a subset of gTLDs — .com, .net, .org, .biz. I did it this way simply because the data exists in a easily-retrievable form. An apples-to-apples comparison would show an even greater decline in UDRP cases in relation to domain names registered.

Examining this data, WIPO could have have trumpeted several alternative headlines, with perfect adherence to fact. In fact, comparing UDRP filings to actual domain name data is far more useful than looking at UDRP filings in a vacuum, as the WIPO press release did.

Alternate Headline #1: Cybersquatting Cases Continue Decline

WIPO could have pointed out that as a percentage of total domain names registered, UDRP filings show a constant decrease. Remember, WIPO stats include ccTLD filings, while the domain name totals I’m using are just a subset of gTLDs. So the decrease is in fact much greater than this chart shows:

One two-hundredths of one per cent? One UDRP for every 200,000 domain names registered? This is what is sending WIPO into fear-mongering mode? The quest for perfection has been held as admirable since the Knights of the Round Table and the Imitation of Christ, but aren’t we being a bit picky?

Alternate Headline #2: Cybersquatting Trends Show Constant Decline

Instead of whipping up fear among easily-confused bloggers and journalists, WIPO could have noted that the growth rate of UDRP filings is down compared to the domain names, as they have been in every single year since the UDRP was instituted.

Compared to the rate of growth among the total number of registered gTLDs, cybersquatting cases are in constant decline. Of course UDRP filings go up as the total number of domain names grows, but they don’t grow as fast as the domain names do. A more penetrating look at these numbers would also ask why the UDRP cases are growing. Is because there is more cybersquatting? Or is it because WIPO has been successful with its public relations, thereby increasing filings? Or have complainants just become more litigious?

Alternate Headline #3: WIPO Records Smallest UDRP Increase Since 2004

Even when separated from domain name numbers, UDRP filings are trending downward. The rate of growth in UDRPs has been declining precipitously since 2006, and the 2008 numbers are the lowest since 2004.

Abuse of intellectual property rights is real, and cybersquatting definitely occurs on a regular basis. On the other side, some argue that much abuse has been perpetrated against the fair-use rights of the public by trademark holders who litigate to prevent common use of everyday speech. Wherever the abuse occurs, those affected should have mechanisms to protect themselves. The UDRP is one such mechanism, and it has worked well despite gaming on both sides.

As we try to promote the expansion of the Internet, it would help if institutions with respected names, such as WIPO, would not twist statistics to score rhetorical points. Susceptible bloggers will just regurgitate it.

Minds + Machines just started up, and we’re giving away a lot of our good advice on registry operations to potential new applicants.

Antony, Elaine and I have had the opportunity over our long careers in the Domain Name Industry to learn a lot about the aspects of registry operations that can really benefit people who are hoping to launch a New Top Level Domain in the coming application rounds.

Many of the potential applicants are technical, many are not. For many aspiring TLD registries, it is hard even to know the right questions to ask. And the timing is such, even with a little extra breathing room while ICANN’s draft applicant guidebooks are being worked through and they gel, that it is time to be selecting partners for registries.

For those of you that have not sorted out their priorities and partners, now is the time to be making those choices, and we decided to share some of our perspective in the hopes that it will help ensure that everyone gets what they need.

So in the coming days, watch for a series of posts here at Minds + Machines‘ blog, titled “The 7 Top Things to Consider When Starting a TLD“.

The Top 7 Things to Consider:
< a href="/2009/03/the-7-top-things-to-consider-when-starting-a-new-gtld-registry-week-1-define-success/">Week 1 – Define Success

I was looking at the ICANN page today and I saw the petition for a new constituency – the so-called “CyberSafety Constituency.” I read through their petition to form the constituency and I was alarmed. Who were these people? What do they mean by safety? I came to the conclusion that this was a way for law enforcement to have their own constituency.

I commented to ICANN about my concerns, but only when I read the previously submitted comments did I realize what this was really about — anti-porn.

I read the entire petition, and nowhere does it mention pornography. So why are there all these comments on the list supporting the suppression of pornography? How did they figure it out when I couldn’t? Am I so doltish? Or is this just a way for one of the United States’ “culture wars” groups to get a bully pulpit for their crusade?

In the end, despite my confusion about what CyberSafety really means, I think my comments stand – whatever they stand for, the people behind the new CyberSafety Constituency need to plainly state what their mission is.

Following are my specific criticisms of the Petition to form the CSC, redacted slightly to correct typos and missing words:

Thank you for the opportunity to comment on the formation of a new CyberSafety Constituency (CSC).

I am against constituencies in general, because they tend to entrench advocacy positions and make it difficult to achieve compromise. Furthermore, ICANN constituencies may make rules which further narrow the interest of the group to the point where positions that ought to be represented in the constituency are filtered out. And all of this, without clearly defining what the role of the new constituency might be. The CSC proposal is a case in point. There are many problems with this application.

Their mission, according to the petition, is to: “advocat[e] that ICANN policies and the technical development of the Internet should not unduly impair the lawful rights of governments and other organizations of authority to take steps to protect their citizens and members from illegal activity conducted on or through the Internet. ”

UNCLEAR MEMBERSHIP, NAME AND MISSION
The phrase “other organizations of authority” ought to be worrisome. Who are these organizations? If this is code for law enforcement, then it ought to be called the Law Enforcement Constituency (LEC). If these organizations already have “lawful rights,” then ICANN is no position at all to impede them, since they have both the law and the enforcement capability already on their side. And what does “safety” mean? Before ICANN admits a constituency, we ought to have a clear sense of that constituency’s charter, who its membership is intended for, a convincing explanation of what as-yet-unfilled role they would play, and a name that clearly denotes the constituency’s function.

UNDUE PRIVILEGE TO “SAFETY” CONCERNS — DOUBLE REPRESENTATION
In the petition, the reason given for the formation of the new constituency is that freedom of speech and privacy are already well-represented within the GNSO, and that alternatives or correctives to that point of view should be heard. Fair enough, but there exists no Free Speech Constituency that needs to be balanced. Instead, these voices are within the GNSO generally. Why can’t those who wish to present a different point of view also make their case within the GNSO generally — why do they need the privileged position of a constituency? It might also be added that since their mission is basically to represent government authority, that they *already* have a privileged position in the GAC. We already have one case of two constituencies representing the exact same interests — the Business and IP consituencies — and there is no need for ICANN to compound that error by giving governmental and law enforcement two pulpits.

LIMITED MEMBERSHIP
According to the petition, membership in the CSC-LEC would be restricted to not-for-profits and individuals who work for them. No reason is given, and one is necessary. I cannot fathom what would prevent a company or a person who works for a company from providing disinterested input and support to a constituency’s mission, especially this one’s. As everyone at ICANN knows, there are many instances of people working for for-profit companies who toil on Working Groups whose recommendations are often not in their employer’s immediate interest. Before granting the status of a constituency to a group who wishes to unduly restrict membership, ICANN should ask them to provide a rationale.

In summary, I believe this petition should be sent back to the authors for improvements. If, as they say, they want to work in ICANN in the spirit of ICANN, they need to be much less opaque about their objectives, their role, and why they are needed at ICANN. In particular, if law enforcement wants to have a role at ICANN, they need to be much less shadowy.

With thanks for the chance to make comments,

Antony Van Couvering

What’s ICANN without acronyms? Here’s a new one: IRT. That’s not Interborough Rapid Transit, the subway on the west side of Manhattan, it’s the Implementation Recommendation Team. Their job is to come up with a plan to address the concerns of trademark holders in connection with the introduction of new TLDs.

What’s brilliant about this move is that the team is comprised of people who suggested solutions to the trademark quandary during the public comments to the last version of the guidebook. Those who simply said “hurrah” or “harumph” will not be asked for any more of their opinions.

Nicely played, ICANN.

Mexico City, Mexico… March 7, 2009: ICANN’s 34th International public meeting in Mexico City has drawn to a close after the organization’s Board of Directors approved the establishment by staff of an Implementation Recommendation Team (IRT) comprised of an internationally diverse group of people to develop and propose solutions to the over-arching issue of trademark protection in connection with the introduction of new generic top level domain names (gTLDs).

“The Board has clearly heard and believes strongly that the concerns of trademark holders must be addressed before this process is opened for applications,” said Peter Dengate Thrush, Chairman of the Board of Directors of ICANN. “The establishment of this team, is an attempt to get proposed solutions from the people with skill in trademark protection and other issues.”

The IRT will be comprised of people who put forward solutions in the first public comment period on the new GTLD Applicant Guidebook. The IRT has been asked to draft a report by 24 April for comment and to produce a final report no later than 24 May so it can be considered at ICANN’s Sydney meeting in June.

Surfrider today announced that it supports the new .ECO top-level domain. Surfrider has long been a booster for .ECO, but today announced its official endorsement.

Some excerpts from the press release:

SANTA MONICA, Calif. – (Business Wire) Today, Surfrider Foundation announced its official support for Dot Eco LLC’s application for the new top level domain .eco. On the heels of Dot Eco LLC entering into an integrated partnership with former Vice President Al Gore and his philanthropy, the Alliance for Climate Protection, to secure and promote the .eco top level domain, Surfrider Foundation is expressing its support for the .eco application.

Surfrider is a non-profit grassroots organization dedicated to the protection and enjoyment of our world’s oceans, waves and beaches. Founded in 1984 by a handful of visionary surfers in Malibu, California, the Surfrider Foundation now maintains over 50,000 members and 90 chapters worldwide.

“Dot Eco LLC and Surfrider Foundation share similar missions – to make a significant contribution towards protecting our planet’s environment. Dot Eco has our full support for its application to ICANN for the .eco top level domain.” said Jim Moriarty, Surfrider Foundation’s CEO.”

.eco will be established for individuals to express their support for environmental causes, for companies to promote their environmental initiatives, and for environmental organizations to maintain their websites in a namespace that is more relevant to their core missions. By charter, a majority of the profits of the .eco initiative will be distributed to support environmental causes.

Dot Eco is getting some major endorsements. .ECO is a great example of what this kind of new top-level domains can do — rally support for a cause, give it high Internet visibility, and provide resources to do good in the world.

The debate on new TLDs is filtering out to non-domain media organs, which is where it belongs. Today I spotted a article in Ad Age, which gave me some hope that the story of new TLDs would finally find some traction among the people who can benefit most from it — marketers.

The article is not bad, but unfortunately the writer seems only to have spoken with confirmed TLD-deniers, where the well-rehearsed arguments were trotted out by Fairwinds and others.

I wrote a response, which Ad Age may or may not let into the comments, but which my brother thinks is pretty good:

If you talk with intellectual property lawyers, as your article does, you will hear a superb articulation of risks to the brands they represent. This is their job, and they do their job well. But your article largely ignores the tremendous marketing opportunities that new top-level domains (TLDs) offer, which far outweigh the risks. In this case, the risk lies in NOT moving forward.

Ad Age is filled with stories about how branding and trust increase online sales. This is precisely what new top-level domains bring to the table.

Examples:

• If the NFL owned .NFL, they would have online control of their franchise. Each team would have a verified name, for instance COWBOYS.NFL. Authenticated merchandise could be sold at GEAR.NFL, tickets at TICKETS.NFL. Compare this to today. Go ahead, type in cowboys.com or ravens.com and see where you go…. Is getting rid of this kind of confusion worth $185K?
• If Anheuser-Busch owned .BEER, how much is that worth in a Superbowl ad, which costs orders of magnitude more than the $185K it costs for new top-level domain? One ad, and it’s Bud = Beer. Game over.
• If BMW had standards for their pre-owned cars (which they do), then they could provide .BMW domain names for dealerships who met their qualifications. BMW = quality; .BMW = dealer you can trust.
• If you hired a celebrity endorser, for instance Shaquille O’Neal, for your new clothing line, how much better would it be to send people to THREADS.SHAQ than to yourcompanyname/shaqthreads? Think that’s not an issue? Now think about typing that in on a mobile device…

These new top-level domains are going to happen, because the demand has been simmering for over 10 years for non-Roman-character TLDs for most of the non-English-speaking world, so that people can use the Internet in their own language. Add to this vocal demands for non-brand-related TLDs such as .AFRICA, .EUS for the Basque Country, .NYC for New York City and so on. These are the real demands that are driving this process, and concerns about cost to brand owners, as real as they may be, are not going to stop it.

It’s true that the new TLDs will cause some headaches for brand owners, although there are workable proposals out there that will allow brand protection across all new TLDs for as little as $125 per brand. I worked with many Fortune 500 companies, managing their domain portfolios and helping them implement their intellectual property strategies online. I’m well aware of the issues.

But to concentrate on the risk and cost when the opportunities are so great strikes me as a great mistake. There is no reason for a company to spend money branding VeriSign (=.com) when they could be branding themselves, even as they claim a permanent part of the Internet at the very top level. Compared to the opportunity, the cost is truly trivial.

Antony Van Couvering
CEO, Minds + Machines