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What we call a “backend registry” is the mandatory technical platform to operate a domain name extension and all registries have one. It is the backend registry that allows accredited registrars to technically sell domain names for each top-level domain (TLD).
The question here is: what happens to a registry, who sells domain names to accredited registrars when his backend registry solution provider is too expensive?
Creating your backend registry solution
In 2008, I remember going to a .BRAND meeting with Stephane Van Gelder and a technical guy told us: “we don’t need a backend registry, we have enough resources to do it ourselves”. Well… one can try to do it so for the next round of the ICANN new gTLD program—and there are tools for this—but I would certainly not recommend it for three reasons:
How to lower the expenses
There are less than 10 solution providers that I would work with worldwide, and the reason why I would not create my own backend registry solution is simple: the more your new gTLD project costs you, the more you will be tempted to increase the price of your domain names. Accredited Registrars, the ones Registries sell their domain names to, will have to take a margin so they will increase the price too, and here is what happens next:
1) The final price at the Registrant level (the person who buys the domain name) will be higher than a “.com”; it may be a bad sign sent to new consumers: “Hey, why should I pay more for a domain name?” Remember that the average price known to consumers for a domain name is between $10 and $12;
2) It will make your registry more difficult to develop the volume of domain names if your target is the general public. For domain names to meet with adoption: “use” is needed but “volume” is needed too to increase its visibility on Internet.
Think twice about creating your own backend registry solution: it will drastically increase the price of your new gTLD project.
Note that 500 registries have less than 10,000 domain names registered but is this what a new registry wants when creating a new domain name extension? I stopped counting at 200 domain names registered (June 2018) to exclude .BRAND new gTLDs from this approximate calculation.
Less than $2 per domain
Backend registry service providers offer a different range of services but there is now stronger competition between them and offers should change for the next round of the ICANN new gTLD program. Prices should change too and there are three parameters that I will focus on when selecting a backend registry provider:
Note that such offers already exist: some providers have adapted to the market. It costs less than $1 for certain registries to create a domain name: “the lower the price is at the backend, the lower it will be for your clients”.
If the backend registry is too expensive… it will impact the final price of your domain names at Registrars and it is unlikely that new consumers will want to pay more than $12 to buy them. Registration volumes seem to confirm this: when new gTLD registration volumes are low, it is also because the price of domain names is often too high, the reason is that.
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