It costs to run a domain name registry — How much
Not much, but some TLDs don’t have many registrations, either.
Frank Schilling’s Uniregistry registry is drastically increasing prices on some of its top level domain names.
Schilling told DomainIncite:
If you have a space with only 5,000 registrations, you need to have a higher price point to justify its existence, just since running a TLD isn’t free.
So how much does it cost to run a top level domain name?
For most registries, the bare minimum fees are quarterly fees to ICANN and fees paid to a backend registry services provider such as Neustar or CentralNic.
For names with fewer than 50,000 registrations, the ICANN fee is $25,000.
The price of backend registry services has been dropping precipitously, but many fresh TLD operators are still stuck in their original contracts. A modest registry might pay $25,000-$50,000 a year for these services, although fresh contracts are being offered at much lower prices.
There’s also a modest fee paid for registry data escrow.
So let’s call it $50,000-$75,000 just to keep the lights on if you run one top level domain.
This doesn’t include any of the operator’s time, cash marketing expense, etc.
There are also big economies of scale here. A firm that owns multiple fresh TLDs by now has a discounted plan with their registry services provider. Any personnel time and marketing can also be spread across these. In the case of Uniregistry, it runs its own registry so it’s expense there is the cost of its technical resources. My guess is this might be more than it would cost to outsource at this point.
At the end of the day, the incremental cost of holding on to one additional modest TLD and not spending any time on it is regarding $25,000 a year.
You can see how a modest TLD with a thousand or so domains not sold at a high price can lose money. Also note that I am ignoring all sunk costs, which are hundreds of thousands even for the worst strings.
The costs get quite a bit higher if a registry spends a lot on marketing, but they ought to also sell a lot more domain names.
