industry

This page profiles the domain name industry: registries, registrars, resellers, resolution service providers and others.

     industry structure

As preceding pages have suggested, the domain name industry is small (global turnover is less than that for hair products or petfood in the US) but a significant facet of the information economy.

It involves a range of players -

regulators - policymakers and administrators within national governments and in autonomous bodies such as ICANN and auDA that operate with government sanction

registries - the entities that operate the domain name registries for the gTLDs and ccTLDs, generally on a commercial basis

registrars - entities, again generally operating on a commercial basis, that are authorised to register names

resellers - most registrars act as retailers and wholesalers of registration services, using agents (eg ISPs and law firms) to resell their registration services in addition to direct sales to consumers

resolution services - Alternative Dispute Resolution (ADR) agencies that provide a mechanism for dealing with disputes about domain registrations. Resolution schemes for the gTLDs are highlighted here and for dot-au are highlighted here.

other specialists - intellectual property lawyers, brand management consultants, regulatory specialists, IT journalists, public policy analysts, industry advocates and others

registrants - the businesses, institutions, affinity groups, individuals and other entities that acquire domain names

Most government and academic research has centred on domain administration rules and dispute resolution mechanisms. There is no major academic study about the shape of the industry as a whole. Volatility within some countries or sectors (eg the departure of resolution service providers and resellers) means that many business figures are suspect.

Employment by the industry is unknown, although as a 'knowledge industry' it may not be large - the major registrars for example employ only a few hundred staff and regulatory bodies such as ICANN and auDA have only a handful of personnel.

Maturing of the industry is likely to permit more accurate and comprehensive mapping through collation of figures published in reports by the regulators and individual businesses.

     trends 

Several trends are evident since the birth of the net -

a move from tacit knowledge to comprehensive publicly-available rules, procedures and policies. It's been accompanied by the rise of the 'cosmocrats' - a few thousand people who have a detailed understanding of technical and policy issues, speak the same language and often know each other through face to face contacts at global conferences and industry/national working group meetings

transition from volunteerism by individual technicians (sometimes characterised as "the spirit of the net") to administration and service provision by discrete regulatory bodies and commercial enterprises, often operating on a large scale

a move from monopoly service providers to competition in the provision of registry and registrar services, broadly associated with lower prices and improved services (along with the departure of many resellers)

the spawning of new gTLDs and cc2LDs, whether because "diversity is a good thing" or because it creates a market for some service providers

Many countries have followed the trajectory of the US and Australia. In the US the monopoly registrar VeriSign (a security services firm that acquired registrar Network Solutions for US$21 billion in March 2000) was initially perceived as being in a position to print money. Fred Vogelstein's 2001 B2.0 piece The Man Who Bought The Internet for example claimed that

Stratton Sclavos increasingly runs the Web. His company, Verisign, has erected cyberspace's largest toll booth and is now poised ...

ICANN introduced competition - effectively through installation of competing registrars, less effectively by creating additional gTLDs - and has since been under attack from the former monopolist. Registration handling times and prices have however declined significantly.

In Australia's dot-au space much registration responsibility passed from volunteer Robert Elz to Melbourne University spinoff MelbourneIT, which floated with delicious results for its stags but has since seen its share price slump - despite expansion overseas - in conjunction with auDA's introduction of competition and slowing uptake of registrations. Registry operator AusRegistry has been promoting the revamped 'id' 2LD but with apparently disappointing results. Resellers of dot-au registrations have been squeezed by indifferent consumer demand and lower margins.

     business

Registration is a low value but high margin activity where registries and registrars can generate respectable profits through high volumes, use of automation and an apparent preparedness to squeeze resellers (eg some are now required to provide substantial bonds).

An example is provided by dot-info and dot-org registration. Users typically pay around US$20 for names in those gTLDs. The dot-info space contains nearly a million names: registrar Afilias earns US$5.75 per year for each name. There are over 2.3 million names in the dot-org space: Afilias will collect US$6 per name, passing US$2 to ISOC's Public Interest Registry.

US researcher Ben Edelman has noted substantial divergence among use of registrars. Major US corporations use one set of registrars and Yahoo-listed domains tend to use others. Edelman's Fortune 1000 Domain Registrations: An Alternative Perspective on Registrar Market Share paper suggests that Verisign has a larger market share of domains actually in use than previously suggested.

A picture of the future is provided by New Zealand, where growth in registrations had slowed to an average of 1,485 registrations per month during April 2001 to March 2002 from an average of 2,705 registrations per month for the previous year, with around 113,000 registrations active in the dot-nz space and some 2LDs comprising a derisory 28 domains. That market is being chased by over 20 registrars.

     cash cows and lame ducks?

An area that is likely to be contentious in future is use of registry/registrar revenue for 'public good' initiatives, for example funding education programs or subsidising access by some groups (eg lower fees for nonprofit registrants).

ISOC's share of dot-org revenue from 2003 onwards will for example be used to fund "a big education outreach" to "promote the Internet", arguably something that no longer needs a capital 'i' or promotion.

In Australia the national domain regulator auDA announced in 2002 that some of its revenue from the auction of previously-restricted generic names in the 'com' 2LD would be placed in a trust fund for community good initiatives.

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