ICANN budget proposal shows fresh TLDs weaker than expected

As registrars predicted, 2015 forecast was too rosy.

ICANN released its 2016 draft FY16 Operating Plan & Budget for the fiscal year beginning this July, and it shows weaker-than-expected fresh top level domain name results in the current year.

The group expects just $14.1 million in revenue from fresh TLDs for FY 2015 (which ends in June). That’s well below the budgeted $19.8 million. That $19.8 million number itself was a shadow of its original proposed forecast following ICANN slashed the number of fresh TLD registrations it expected.

ICANN’s final 2015 budget predicted 15 million registrations in fresh TLDs (down from 33 million in the draft). That’s regarding three times as many domains are right now registered with only a few months to go.

Registrars were skeptical of this 15 million forecast, and expressed concern that ICANN would make up budget shortfalls by getting more money from registrars. Initial low numbers from fresh TLDs were part of the reason for a hiring freeze at ICANN at the end of the 2014 calendar year.

For 2016, ICANN is proposing a $24.1 million forecast for fresh TLDs. Almost all of that is made up of the fixed fees registries must pay ICANN.

The draft budget proposal also sets a “high” estimate of 50% for fresh TLD renewals for domains registered in the same month the year ahead of. It estimates 25% for domains that were given away for free.

Data I’ve seen for fresh TLDs that are hitting their one year anniversary suggests overall renewal rates will be much higher than this, at least for the full renewal cycle.

Keep in mind the 2016 numbers are just a starting point, and this is a draft document.