A drop in total registrations will be a healthy sign of a maturing market.

A drop in new top level domain registration numbers would be a health thing.

This week I published my annual predictions podcast episode featuring 19 predictions for 2019.

Here’s another prediction for 2019: the number of registered domain names in new top level domains will decrease. But this is actually a good thing, as I’ll explain.

The reason for the anticipated drop is a shift in business model at Famous Four Media, which is now Global Registry Services Limited, aka GRS Domains.

The domains under management in this portfolio were built on very cheap (sometimes free) domain registrations. That’s why .loan is the third (or second depending on who you ask) biggest top level domain in terms of volume. nTLDstats shows 2.2 million .loan domain names.

John McCormac, who runs HosterStats.com, has been tracking .loan and other former Famous Four Media domains and says renewal rates for these domains are dismally low when renewal prices are higher. He calculates that renewal rates for 2017 registrations was under 1% through the first three quarters of 2018. So over 99% of those domains dropped.

Historically, these would be replaced by people registering new domains. But GRS Domains started charging higher prices toward the end of last year. Retail prices for .loan domains are now $10+. Here are HosterStat’s new registration calculations for .loan through the first day of each month:

01 Jan 2018: 224,502
01 Feb 2018: 98,624
01 Mar 2018: 205,863
01 Apr 2018: 397,069
01 May 2018: 353,244
01 Jun 2018: 37,968
01 Jul 2018: 705,787
01 Aug 2018: 110,583
01 Sep 2018: 57,174
01 Oct 2018: 46
01 Nov 2018: 93
01 Dec 2018: 78

There’s little demand for .loan without steep discounting.

McCormac notes that the increased wholesale price of .loan and other domains is scheduled to last until February 2019. If prices stay higher, then we can expect few new .loan registrations this year.

But…this is a good thing. New TLD registration numbers have been inflated by cheap domain registrations. Dirt cheap domain registrations are a bad thing: there’s a very real correlation between the price of a domain and its abuse rate. Scammers and spammers keep their costs down with these cheap domains. Paying less than a buck for a domain instead of $10 adds up when you register thousands.

Spamhaus publishes a list of the 10 most abused top level domains. Guess what’s at the top? Yep, .loan.

There is simply no legitimate reason that certain top level domains have as many registrations as they do. The only reason they are so high is because people are using them for bad stuff. That kills the TLD. Legitimate domain users will avoid a TLD if it has a bad reputation. Some people have blocked emails from all .top domains because of the amount of spam.

A financial company would be much wiser to use one of Donuts’ .loans domains than .loan because of the reputation of these domains.

So assuming GRS Domains sticks with its current approach (and I hope it does), we can expect the number of registered domains under new TLDs to fall in 2019. This is a good thing.

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