- Back in 2018, the US government reached an agreement
to allow .com prices to increase
by as much as 70% over the next decade,
and this is after prices have been frozen since 2012.
It took a while for this to kick in,
but the price increases are here
and this is just the beginning.
The precedent set by the US government shows that
they may allow astronomical price increases in the future
and this is something that could affect
your business or your bottom line,
especially if you have a lot of domain names.
So in 2020, ICANN officially authorized
these changes to the contract with Verisign,
giving them the authority to start increasing
prices for domain names.
And on September 1st, 2022 the wholesale price
for a.com domain is going from
8.39 a year to 8.97 a year, up 7%.
While this price increase on its own is not that significant
and not gonna break the bank,
this is more about the big picture of the future
of the domain industry.
But wait a minute, who is ICANN, and who is Verisign,
and what does wholesale pricing even mean?
We all get our domain names from a domain registrar,
these are companies like GoDaddy, Namecheap or Porkbun.
And while you can't actually own a domain outright,
you lease a domain from these companies
and that's why you pay a renewal fee every year
to keep your domain name going.
Now, you may be asking, wait a minute,
how do companies like GoDaddy, and Namecheap, and Porkbun
all sell the same domain names?
How can I buy abc.com at all three of these places?
Where's the consistency here?
Well, these providers are actually
leasing the domain name from the registry.
What is a registry?
Well, it's basically a database of a TLD,
or top level domain,
this is the domain extension like .com, .net or.org.
So every domain extension has its own registry.
The .com registry is run by a company called Verisign.
Verisign has a huge database of all the .com domains
to ever exist and it has instructions
on where each .com domain is pointed.
So you might be wondering, wait a second, Christian
if a company like Verisign
gets to maintain the.com database,
who decides that they have the right to do that,
after all maintaining a TLD registry is very lucrative,
there's a lot of money to be had in doing this,
especially for a massive mainstream TLD such as .com.
So who makes this decision?
It's actually a non-profit organization called ICANN.
ICANN is responsible for coordinating the maintenance
of these domain databases to ensure
the internet's stable operation.
Companies are awarded contracts
to have sanctioned monopolies on TLDs,
and in the case of .com it's Verisign.
So what does this all have to do with the price increase?
Well, in 2018, the US government extended its contract
with Verisign to allow them to have
the sanctioned monopoly and exclusive access
to run the .com database,
only there was one significant revision
in this contract renewal.
It gave Verisign the right to increase .com pricing
by 7% per year with two year freezes every four years.
This was very significant because .com pricing
had been frozen since 2012.
There was just one problem.
See, ICANN, that organization we talked about earlier,
still had to approve these changes for Verisign
to be able to increase prices of .com domains,
but guess what they did?
They ignored over 9,000 public comments
urging ICANN to stop these changes,
and they just rammed it through anyway.
Why? Well, because ICANN wants to maintain
a good relationship with world governments,
and since the US government already reached
a private agreement to allow these changes with Verisign,
ICANN was basically gonna sign off on whatever
the US government said was okay,
and they weren't interested in reviewing
any of the public comments,
they really wanted to just maintain their status
as the organization responsible
for maintaining all these databases,
and that means they pretty much
have to do whatever the US government wants.
Verisign implemented the first price change
on September 1st, 2021, bringing the wholesale price
from 7.85 a year to 8.39 a year.
And guess what?
Exactly one year later on September 1st, 2022,
they're increasing the price again
from 8.39 a year to 8.97 a year,
raising the price by another 7%.
And you might be saying so what Christian,
is this really that big of a deal, .com wholesale pricing
is up a little over a dollar versus two years ago,
A dollar's not gonna break the bank.
But keep in mind, this is just the price increase
to the wholesale pricing,
or the cost that domain registrars like GoDaddy,
Namecheap and Porkbun have to pay.
They all mark these domains up and charge a profit.
So the price increase that you are likely to see
is going to be even more than the $1
that Verisign is making.
But still for right now, this is not that big of a deal.
Maybe you're gonna pay a dollar 50 more per year
for that .com domain than you did two years ago,
it's not gonna break the bank.
But we have to look at the bigger picture
of what's happening in the domain industry.
What is going on with TLD price regulation?
Is it just.com?
Is it other TLDs?
Can we use other options out there that are safer,
or can any domain just skyrocket in price over the years?
Well, it's other TLDs too.
In 2019 ICANN removed all price regulations
for the .org TLD.
Instead of saying, you can raise the price by 7% a year
or even 10% a year, they just said, you know what,
you can charge whatever you want for .org domains,
there's no regulation, if you wanna start charging
$3,000 a year tomorrow for this, go right on ahead.
And PIR, the company currently running .org domains,
so far has not increased the prices by much
and they said they're committed
to keeping the pricing more affordable.
But the .org registry was recently in talks of being
acquired by a different company
and that company flat out said
that they would increase .org pricing
by 10% a year in perpetuity.
This means that 30 or 40 years from now,
the price of a .org domain would be ridiculous.
And other TLDs are seeing massive price increases as well.
For example, in 2017, the .hosting TLD
went from about $20 a year in wholesale pricing,
to $300 a year in one price increase,
the price went up by 1,400% in one price change.
ICANN says they're in favor of removing price regulations
on TLDs ever since they started accepting applications
for new TLDs in 2012.
You may remember a time when the common domains
were .com. org. net.
you know, all the classic domains you're used to seeing.
But somewhere along the lines recently
we started seeing this huge flood
of new domains like .media .xyz .wiki,
all these cool trendy TLDs that are a lot of fun
to implement with your brand.
We've seen all these TLDs pop up
because ICANN started accepting new applications.
And at the time in 2012,
they said that they weren't gonna impose
any price regulations on these new TLDs,
and for a good reason.
Running a domain registry is very expensive.
It takes a lot of capital investment up front,
it is very risky, and there's a good chance
that your new TLD is going to fail
and you're not gonna be able to afford
to even stay in business.
So if you're going to launch a new registry,
you need to have a lot of money.
And to be fair to all these entrepreneurs
that were putting their capital on the line,
ICANN said, you know what, we're not gonna put
any price regulations in place.
If you wanna launch .hosting, go ahead,
you can charge whatever you need to charge for it
and we're just gonna let the free market dictate
what people are willing to pay for your domain names.
And here's the thing,
this argument actually makes a lot of sense
for new trendy TLDs, but they're trying to
apply this same logic to classic TLDs like .com and .net,
saying, well, since we're not regulating the price
on all the new TLDs since 2012,
why should we be regulating pricing on old TLDs.
We wanna standardize all of our contracts with registries,
and just remove price regulations all together.
But TLDs like .com and .net have a significant advantage.
They have volume and they have a TLD that everybody wants.
Let's be honest, at the end of the day,
most people own a .com domain, or they buy a .com domain
because it's common and everybody knows it
and this is basically the domain extension
that we all assume as standard.
So Verisign is not exactly hurting for money.
In fact, their annual revenue in 2021
was $1.32 billion, with a net profit margin of 59%.
The reality is, Verisign doesn't need to make more money.
This looks like a case of corporate greed
and like Verisign is just looking to increase
their profit margin without having
to sell more domain names.
The domain market is very saturated
and I can't imagine the overall number
of .com domains is increasing that much,
it's likely plateaued, so this is pretty much the only way
that Verisign can increase revenue going forward.
It's really the true definition of a monopoly.
So how can you protect yourself
from these crazy price increases?
Well, the reality is the .com TLD is probably
unlikely to surge to $300 a year overnight,
but other TLDs may potentially see big price hikes
like .hosting, and in general if you wanna make sure
you have the best price on your domain name
for as long as possible,
you can actually renew your domain name
for up to 10 years at a time with the current pricing.
And by the way, make sure you renew your domain name
at a quality registrar.
If you're using something like GoDaddy, it's time to stop,
they're charging way too much of a markup,
you don't need to be doing that.
Look at a registrar like Porkbun or Cloudflare domains.
I like Porkbun, they're a great value registrar
and they give you just about everything you need
to maintain your domain name,
or you could go to a place like Cloudflare domains,
if you want to purchase domains at wholesale pricing
with no markup, but be aware there are some gotchas
and limitations to Cloudflare domains,
so be sure to check out
my domain registrar comparison video over here.
The other thing you can do to be forward thinking
is to invest in NFT domains.
These Web3 domains are a new type of domain
that you can buy once and own it outright.
It's actually stored in your crypto wallet,
so there's no company that has control over your domain,
you don't have to lease it,
you pay for it once, you store it in your crypto wallet
and you have it forever.
Once again, there are some gotchas to this avenue,
NFT domains are currently very limited
with what you can do with them.
You can only access them in certain browsers,
in some cases you have to modify your DNS settings
on your computer to even be able to pull up NFT domains,
and you're very limited to where you can connect them,
it's not super easy to point it to web hosting right now.
I have a whole video taking a look at NFT domains
that you can check out here.
But definitely be aware that NFT domains
aren't ready for mainstream use yet,
but it may be worth investing in an NFT domain
and buying one that corresponds with your brand now,
because remember, you pay for it once, you own it forever,
and the price of NFT domains
can really only go up over time.
Think about if you do both of the things I just mentioned,
if you renew your current domain name for 10 years
because you know you're gonna be using it for that long,
and you buy an NFT domain, there's a good chance
that NFT domains are going to be ready
for the mainstream in the next decade.
A company I've used before to buy my NFT domains
is Unstoppable Domains.
They have a great website, you can browse through
several different TLD equivalents in the NFT domain space,
and you can buy your domains starting at
I think, around $20 and remember that's a one time fee.
If you'd like to renew your domain
before the next price increase,
you have two days to do that
as of the release of this video,
and I'll have my domain registrar comparison linked below
so you can decide the best place to do that.
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With that said, I'll catch you guys next time.