[PPT] - 2017 A decisive year for the domain industry? A ccTLD perspective PowerPoint Presentation

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2017 –A decisive year for the domain industry? A ccTLD perspective…

Peter Van Roste peter@ centr.org ICANN58 Copenhagen, Denmark 13 March 2017

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Problem Statement The new global TLD market Registrations: growth, adds/renews/deletes, market shares Impacts from new gTLDs and Chinese investment

Agenda

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Problem Statement: Maintaining long term revenue sustainability in a market of declining to stagnant growth

Problem Statement

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A long long time ago, in a namespace far, far away… .

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Facebook accounts Gmail accounts Tumblr accounts Instagram accounts Twitter accounts Domains (all TLDs) LinkedIn accounts

200

400 600 800 1,000 1,200 1,400 1,600 1,800 Millions

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1.7 billion active Facebook accounts & 300 million domain names At least 1.4 billion Facebook users not likely to have a domain name….

Domains in context

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Global TLD trends

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ccTLDs by Region

Global ccTLDs: By Region

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European ccTLDs

69.6 million domains
Median growth 2016: 3.5% (long term trend decline)
High growth in 2016: .am (Armenia, .ee (Estonia), .pt (Portugal)
Av. Wholesale price 7.0 EUR (convergence to median)
Median retention rate: 85% (stable)
Average ccTLD market share in country: 51% (stable to small trend up)

European ccTLDs: Overview

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10

2016 Growth by TLD

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0.0% 0.4% 0.8% 1.2% 1.6%

Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16

First new gTLD delegation

(Oct 2013)

Fastest declines in ccTLD median growth

(2012 -2014)

New gTLD applications opens

(Jan 2012)

Stabilisation of ccTLD growth

(2014 +) Median ccTLD Growth (35 ccTLDs)

Monthly Trend: Domain Growth

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Median Growth 35 ccTLDs, 5 legacy gTLDs, top 300 new gTLDs

Monthly Trend: Domain Growth

0.9%

0.1% 1.1% 2.1% 3.1%

Feb 10 Feb 11 Feb 12 Feb 13 Feb 14 Feb 15 Feb 16 Feb 17

European ccTLD Median

Monthly Trend: Domain Growth

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3.4% 3.4% 3.7% 5.6% 8.8% 12.6%

2016 2015 2014 2013 2012 2011

What has driven the stabilisation?…

Median Growth: Annual 35 ccTLDs, 5 legacy gTLDs, top 300 new gTLDs

Annual Trend: Domain Growth

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10% 15% 20% 25% 30%

2011 2012 2013 2014 2015 2016 2017 2018

Adds 18.6% Churn 15.7%

Drivers to Stabilisation

1. Less deletes in 2015
2. New adds stabilised in 2015-2016

Issue: Long term adds trend heading toward churn ratio intersection while Retentions rates are mostly flat.

Median Adds/Churn 35 ccTLDs

Annual Trend: Median Add & Churn Ratio

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Market Trend Decreasing new adds, small increase in Retentions Market Positions: Retentions & Adds

Market Positions: Retentions & Adds

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National ccTLD, 51.2% Other European ccTLDs 10.1% Legacy gTLDs, 35.4% New gTLDs, 3.4%

Av. local market share 51% to ccTLD

(stable)

Low av. new gTLD market share.
Since 2015, small % decline in legacy

gTLDs in favour of new gTLDs.

Average Breakdown of TLDs by locally registered domains 33 European Countries

TLD Market Share: European Countries

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Summary

Long term add growth declining toward churn intersection
Renewals are flat
Local ccTLD market share stable with limited volume impact from new gTLDs
Limited impact from boom in Chinese investment

Summary

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Long term growth is stagnating

(new domain growth slowing, flat renewals)

Increasing pressure to cost/revenue margin Possible options to ccTLDs

Price adjustment? Look for new market segments (SMEs)? Cost cutting? Diversification?

Problem Statement & Choices

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Thank you

pet er@ cent r.org