[ga] The facts about professional registrants (domainers)

["Prophet Partners Inc." <Domains@xxxxxxxxxxxxxxxxxxx>]

Hi Michael,

We'd like to dispel some misperceptions and point out some facts using your
analogy of launching a new TLD compared to building a city.

1) Professional registrants (hereinafter referred to as domainers) do not
TAKE all the prime real estate of a new TLD. Domainers PAY for it via annual
registration and renewal fees.
2) These annual registration and renewal fees are paid in advance. This
means that the registry has access to and use of that money, before
providing services to domainers for the money received. The registry earns
interest off of that float from day 1 of the registration. Domainers provide
the majority of the initial revenue base and operating capital for the
registry to attract new registrants, allowing the registry to diversify the
source of revenue and income. Most domains held by domainers are renewed
year after year. As a result of domainers,  the registry benefits from a
RELIABLE source of RECURRING revenue and income.
3) Domainers take on higher degrees of risk by being among the first to buy
into an unproven investment. It's the same as when American pioneers settled
into the wilderness. Many died along the way, but some also had great
success. Similarly, not every domain registered by domainers is profitable
and any seasoned domainer has their share of losers, for which they paid
registration fees. The large sales that you hear about in the media are the
exception, not the norm. It is estimated that large firms such as BuyDomains
only turn over 1-2% of their inventory each year. The rest goes unsold while
they continue to pay annual renewal fees. Using basic investment theory, the
higher the risk, the higher the potential reward and vice versa. Think of
domainers speculating in a new TLD as venture capitalists funding a new
startup venture, in this case a new registry.
4) Domainers POSITIVELY impact the ability to attract new registrants by
creating the perception that there is demand and a bright future for the new
TLD. Prospective registrants feel more confident in registering a domain in
a new TLD knowing that others have already made a monetary commitment to the
TLD. Would you open a grocery store in a neighborhood that had planned
housing developments or in a deserted area with uncertain prospects? In the
absence of the domains registered by domainers during a new TLD launch, the
new TLD would look like a ghost town. We find it hard to believe that a
deserted TLD would attract many new registrants. If you need proof, just
look at the .pro TLD. There's plenty of available .pro domains with top
quality keywords. Why aren't more non-domainers registering .pro domains?
5) Domainers by putting up for sale signs of their domains increases
exposure for the TLD. The registry freely benefits when people see and
inquire about the empty land (unregistered domains) next to land that has
already been claimed (registered domains with a for sale sign).
6) Complaining that domainers PAYING registration fees on a registered
domain is worse than having an unregistered domain WAITING for a new
registrant is absolutely ludicrous. If we're landlords, we'd much rather
have someone there paying rent, than having an empty space that generates
zero revenue and income, in the hopes that someone will come along and pay
the SAME amount.
7) The bottom line is domainers do not COMPROMISE the launch of a new TLD,
but instead STIMULATE its growth.

Sincerely,
Ted
Prophet Partners Inc.
http://www.ProphetPartners.com
http://www.Premium-Domain-Names.com


----- Original Message ----- 
From: "Michael D. Palage" <Michael@xxxxxxxxxx>
To: <ga@xxxxxxxxxxxxxx>
Sent: Thursday, August 31, 2006 10:19 PM
Subject: [ga] Combined Response - Tiered (Variable) Pricing


<snipped>
>
> Although I generally avoid using property analogies in connection with
> domain names, launching a TLD is a lot like building a city where the
> government needs some discretion with regard to zoning and planning. If
> a registry launch is compromised by professional registrants that take
> all the Class "A" office space and put for sale signs in the windows,
> that negatively impacts the mayors ability to attract new inhabitants
> into the city and build sustainable and diverse revenue base.
>
> Best regards,
>
> Michael D. Palage