The domain name market in 2020 and beyond

What developments are on the horizon?

The domain name market has grown and matured in recent years. Globally, there were roughly 360 million registered domain names at the end of last year. The number of websites linked to those domain names is even greater, running into billions. While it's impossible to be sure quite where the market is heading, I expect four key developments to be influential:

1. Domain names will become increasingly valuable assets

In a world where deposit interest rates offer savers a meagre return, people are looking for alternative investments: vintage wines, designer accessories, real estate and sometimes domain names. Back in the day, it was common for receivers and heirs to cancel valuable domain names, not realising their worth. Recently, however, we have seen an increasing number of high-profile attempts to claim control of desirable domains. The French state has locked horns with a US travel firm in a squabble over france.com, for example. Meanwhile the heirs of Pablo Escobar have asserted their right to the domains registered to the infamous Colombian drug lord. Domain names are worth good money.

2. Disaffection with social media will make domain names more desirable

In the Netherlands, very few businesses have shunned domain names in favour of social media. In many other countries, though, cost considerations have driven considerable migration to Facebook and other platforms. Latterly, however, that trend has stalled at the global level. Businesses have found it increasingly difficult to get social media content seen and shared, certainly unless they're prepared to pay. A Facebook post is often shown to fewer than 10 per cent of the page's followers, for example. A growing number of smaller enterprises are therefore wondering whether having a standalone website supported by modern marketing automation tools and content management systems isn't ultimately more cost-effective than investing in a platform that seems to deliver revenue mainly for its owners.

3. Price rises are likely

In 2018, the US government gave Verisign, the company behind .com, permission to raise prices by up to 7 per cent a year, starting in 2020. With 40 per cent of all domain names using the .com extension, the implications are clearly far-reaching. And other registries are reviewing their prices, as growth slows and many domains are even starting to contract. Higher prices look particularly appealing for new TLDs, which continue to struggle for volume despite acquiring a higher profile thanks to domains such as picnic.app. Upward pressure on prices will intensify if the cost of running a TLD goes up, especially for registries whose owners have commercial motives; the sale of .org to Ethos may prove significant, for example. In Europe too, price rises have been announced for TLDs such as .uk.

4. New gTLDs will get a boost with a fresh round of delegations

Although the last generation of gTLDs has yet to achieve the anticipated success in volume terms, a fresh opportunity to apply for delegations looks inevitable. It simply isn't acceptable that companies that weren't around or ready to apply in 2012 can't have brand TLDs (TLDs matching their brand names), when many others do have them. And we've got a .amsterdam, so why not a .rotterdam? In the course of 2020, plans for the next delegation round are likely to take shape. I expect the 'assetisation' trend referred to above to be a strong driver of interest in new TLDs. Crystal ball-gazing is an inherently unreliable activity, of course. However, I'm very confident that the four developments outlined above will be influential in the years ahead.

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