ICANN slashes fresh TLD forecast, but is it enough?
ICANN is forecasting 15 million fresh TLD registrations during the current fiscal year.
ICANN has slashed the number of fresh top level domain name registrations it expects during this fiscal year for budgeting purposes, but is its picture still too rosy?
That’s a question that members of the Registrar Stakeholders group asked ICANN’s board the prior week in Los Angeles.
In May, ICANN set a draft proposed budget for the 2015 fiscal year, which runs from this July to June 2015. Its revenue forecast from fresh top level domain names included a startling number of second level registrations under fresh TLDs: 33 million.
It has since revised the forecast down 55% to just 15 million.
Given results so far, it hardly seems likely that 15 million fresh domains will be registered in fresh TLDs ahead of next summer — even if you include registrations occurring ahead of the fiscal year began. There are right now regarding 2.8 million registrations.
Domain registrars are concerned that they’ll get stuck holding the bag if revenue comes in below target.
Fresh TLD registries pay ICANN a fixed fee of $6,500 per quarter ($25,000 per year). If they have more than 50,000 “transactions” in a year, they pay 25 cents per domain. Transactions are actually domain-years, not registrations, but ICANN’s budget refers to a number of domains registered as an assumption in its forecast. I’m not sure how ICANN calculates this in the budget; they must be assuming a certain number of TLDs cross this threshold.
Ought to domain registrations come in below forecast, then ICANN will have a revenue shortfall. The easiest place to make that up, the registrars fear, is by increasing the variable registrar fee on domain name registrations. That’s the 18 cent “ICANN Tax” you usually see passed on to the client.
ICANN’s latest FY2015 budget cites the number of fresh TLD registrations as a risk factor. In fact, it mentions the risk of a “lower number of transactions per registry” as “high”, and lists the likelihood of a “higher number of transactions per registry” as low.
It certainly seems that ICANN ought to be planning for a lot fewer registrations than are in its budget.
