Nora Nanayakkara

Good morning!

I’m on holidays at the moment in East Cork, where it is freakishly warm!  So apologies for the lack of update, but I have to say that broadband access is a bit hard to come by here!  So, I’ve been trying to keep up to date with goings-ons on “list” and thought, rather than laboriously typing responses on the blackberry, I’d type up some stuff here and reply “on-list” later.  Hopefully, the thoughts below will offer a “different” viewpoint and maybe provide a basis for further discussion – let me know what you think!

In regards to pricing – here are my thoughts, as a candidate for the non executive director election at Nominet.

1.  What is the goal of a price change?

From reading the list, I am struggling to decipher the objective of a price change?  Is it to decrease Nominet surplus?  Is it to stem the domain secondary market success?  Is it to make domains more/less available to wider members?  If I were elected, I would first seek to work with the Executive Board to clarify the objective of a price change and then to conduct analysis, centring on:

1.  The impact of a price change on .uk renewal rates

2.  The impact of a price change on Nominet revenue

3.  The impact of a price change on the key stakeholder groups (for the sake of argument, those used in the outreach and consultation rounds for Prof. Garratt’s review – primary market, secondary market, corporate members (non-registrar/domain investor), private members and NFPs (?).  Also, I would propose examining the effects of price changes in domain names on advertising, search engines and IP management companies and webhosting businesses.

As most of you have contacted me asking about my feelings on a price hike, here are my initial feelings:

Impact of a price hike on the Primary Market

A price hike, or a fluctuating pricing model, would render .uk internationally uncompetitive

It wold negatively impact the .uk brand

It would increase the barrier to entry for SoHo’s and SMEs who are seeking to go online

It would ultimately make “online” less accessible

Registrars will concentrate their marketing efforts on more viable TLDs (and those where they get marketing support from registries, but that’s another story)

And new registrations plus renewals of .uk will fall, thus

Ensuring that Nominet’s revenues decrease and

Ensure that any further development of Nominet’s remit would be severely stunted

 Impact of a price hike on the secondary market

In my opinion, a price hike would result in .uk domains increasingly consolidated into portfolios of large pure-play domain investors, as these would be the only ones with the cashflow and revenue buffers to withstand fluctuations in registration and renewal prices, as they have always run their domain investing as a traditional business (in contrast to some smaller investors, or those that do it “part time”). 

Domains will increasingly be owned by international domain investors, whose risk is diversified by their involvement with other TLDs.  This, IMHO, would take business and revenue out of the UK and ultimately stunt national online entrepreneurship.

Domain prices on the secondary market would rise and

Sales volume would fall and

Fluidity in the marketpalce would be negatively impacted by a price hike .

Ultimately, the secondary market would continue to thrive but would do so at an increasingly inaccessible level for the average consumer.  It would be a sellers’ market, with prospective buyers suffering low supply and high prices with negotiations taking longer and transfers becoming more problematic.

The convergence of primary and secondary domain markets is already well underway; as someone on list (Alex?) has already pointed out, most of Nominet’s top twenty members have some form of secondary market interests already and this is on the increase – both internationally and at home.

To conclude, if a price change is the proposed solution to the perceived “problem” of domain investing, I feel it is overly simplistic and likely to be futile, if not counterproductive.  If we are to truly seek to make domains more accessible to all .uk stakeholders, I would rather support the following measures:

1.  Keep prices as they are (depending on analysis)

2.  Encourage fluidity by working on ease of domain transfers (e.g. Auth codes)

3.  Support registrars’ efforts to add value to their product offering

However, as stated, this is simply one perspective – and one that I feel would be of value at Board level, when considered as one proposal among others, which would enable the Executive to benefit from a rounded and balanced perspective.  Putting forward a variety of proposals, possible solutions and viable alternatives, would give the Board and its membership a range of options to choose from, as they seek to build a strong, competitive and realistic strategy for the future of .uk