The European domain market is grappling with the combined pressures of inflation, energy prices, and EU regulations, which are impacting registry financials and operations. Despite these challenges, the Council of European National Top-Level Domain Registries (CENTR) reports that European country code top-level domains (ccTLDs) have largely maintained high levels of domain renewals throughout 2022. Still, growth rates have slowed to a 10-year low of 1.4% (median). ccTLDs have managed to preserve their internal market shares, with median rates of 53% based on local registrations and 42% based on popular website traffic (Google).

Increasing external market pressures are beginning to affect the industry more widely. Over the course of 2022, the average retail price of a European ccTLD domain rose to €10.4 (up 5% YoY). While this price hike is unlikely to deter new businesses from purchasing ccTLD domains for websites or email, it may impact price-sensitive domain speculators, particularly in cases where the registry has a less friendly policy towards domain tasting. This practice involves registries allowing registrants to register domains, test them for a short period of time for web traffic and advertisements, and then decide whether to keep them or receive a refund. If retail prices continue to climb in 2023, growth rates may further decelerate, especially among registries with higher rates of underdeveloped domains.

Wholesale pricing is also undergoing changes. Although price increases are generally rare among European ccTLDs, factors such as high inflation, rising costs related to EU regulation compliance, and increasing energy, travel, and other supply input costs have resulted in price hikes. Data from early 2023 reveals a median wholesale price of €6.3 (ex-tax), up from €6.0 a year ago.

Highlights from the report:

• European ccTLDs represent an estimated 57% of the European domain name market with the remaining 43% attributed to .com (32%) and other gTLDs (11%).
• There is an average of 15 domains (including ccTLD and gTLDs) per 100 people across European countries. Demand for European ccTLDs over 2022 returned to pre-pandemic levels similar to 2018 and 2019.
• Median domain growth in 2022 hit a 10-year low at 1.4%, while renewals remained stable at 84.3%.
• The median market share of European ccTLDs is estimated at 53% based on locally registered domains in the country and 42% based on popular websites.
• The median retail price for a European ccTLD increased over 2022 and finished at 10.4 EUR, with the same sample of registrars selling .com at 12.7 EUR. Both prices are up 5% year on year.
• DNSSEC adoption remains low for most European ccTLDs, with rates of signed domains generally under 10%. There are around 7 ccTLDs that have more than half their zone signed.
• The proportion of European ccTLD domains used for developed web content (active websites) is 46%. Over 2022 the rate of developed ccTLD websites using SSL increased from 66% to 70%.

The bottom line: The European domain market faces a challenging landscape in 2023 due to the triple threat of inflation, energy prices, and EU regulations. Registries must find a delicate balance between growth and security while adapting to the shifting dynamics in retail and wholesale pricing. Continued vigilance in branding, sales, and marketing will be crucial for registries to navigate these turbulent times successfully.