Intelligence Part 1 – Is Price Only an Issue in the Absence of Value?

We are now less than two years away from the beginning of the application window for ICANN’s next phase in the expansion of its new gTLD programme.  It has been over 12 years since organisations last had the opportunity to apply to run their own top-level domain, and so the anticipation has been building on who will apply and what for.

There are still some of the finer points to agree on in terms of the mechanics of how the application, and subsequent evaluation process will run.  However, the major tipping point is likely to be when ICANN announces the price tag for an application.  Whatever that price point will be will generate a significant amount of comment from community stakeholders, applicants (current and future), registrars and registry operators.  In and around the meeting rooms and corridors of ICANN events over the past year, rumours of numbers as high as $330,000, and as low as $190,000 have been discussed.  What is almost a certainty is that it will be more than the Round 1 application fee of $185,000.

But is the price, or the absence of it, the reason why we are yet to see a surge in demand from applicants, especially in the dotBrand space?  How much of an issue is the price tag if an organisation has a solid business case, built around some use case scenarios that will provide a return on investment either in financial or non-financial terms (or both)?

The application fee is a one-off payment made upon application of the TLD.  Should the application pass the ICANN evaluation process, then the applicant will be invited to sign the Registry Agreement with ICANN.  This covers an initial 10-year term to operate the TLD with a presumption of automatic renewal.  Upon renewal, the fee does not have to be paid again, so the cost could be amortised as a non-tangible fixed asset over a long period of time, such as 20 years. Naturally, most organisations would need to gain authorisation for such a level of spend on an asset, which can take time and could span budgeting periods.

More of a concern for some potential applicants is whether there could be competing applications for the same TLD.  Since the last application round, the growth of new businesses that use a generic word, or words, as their business name means there could easily be several applications for the same string.  Telegram, Chime, Ripple, Bolt and Bird – all generic words, all names of brands with billion-dollar valuations formed since the last application round.  How would you react if you didn’t apply, only to find another applicant applies for your brand as a TLD?

Preparation now, not in 12 months’ time (or more) is key, especially if there is a risk of contention with another party applying for your desired TLD.  Whether the ICANN application fee is going to be $20,000 or $100,000 more than in the previous round shouldn’t be the single decision point for a potential dotBrand applicant.  Understanding what value they can gain from an application is.  That value may come in the form of a return on investment in terms of new clients, greater geographical reach, or better market positioning, or it may be through cost reduction in terms of simplifying and creating a more secure infrastructure by using a dotBrand to host an abuse-free ecosystem.

Many organisations are already in that planning phase for the next round, creating their stakeholder team, starting to define their key use case scenarios, and developing their business cases based on the financial costs and revenue potential they can see today.  Naturally, there are still some unknowns, such as the ICANN application fee, but that shouldn’t be a barrier to starting the internal preparation work for a successful dotBrand TLD application.  The sooner this part of the process starts, the greater the value of the overall project can be.

One thing is for sure: when ICANN does announce the TLD application fee there will be a lot of noise, with voices from the community debating the rights and wrongs of the cost, which could become a distraction for any brand holders that are considering an application for their own TLD.  By starting the planning activities now, the application fee becomes one of the known variables in the budgeting work, rather than the reason not to apply once it has been announced.