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ICANN Accredited Registrars) » Headquarters in Reston, VA 3 ICANN Dubai – March 2008 (Araad; .ORG) As a Comparison Distribution Channel Mgmt Registry/Registrar Relationship – gTLD View Alexa A. S. Raad, CEO Public Interest Registry March 27, 2008 Agenda » About PIR (.ORG Registry) » Registry Business Model – Deferred Revenue System – Key Financial Decisions » The Distribution Channel – ICANN Accreditation – Registrar Landscape – Registrar Trends & Business Models » Relationship Management – Sales – Financial – Policy 2 ICANN Dubai – March 2008 (ARaad; .ORG) About PIR » Established 2002, as the exclusive Registry Operator for .ORG – Delegated the policy-making power for .ORG • Registration eligibility requirements • Registrar accreditation » Responsible for: • Setting the wholesale prices • Managing Industry relations • Determining marketing/branding and product mix » Back-end registry operations provided by Afilias » Over 6.4 Million registrations – Registrants in over 100 countries around the world » Over 600 channel partners (ICANN accredited registrars) » Headquarters in Reston, VA 3 ICANN Dubai – March 2008 (ARaad; .ORG) As a Comparison TLD January 2008 January 2007 Change Percentage Domain Count Domain Count Change .ORG 6,369,595 5,465,212 904,383 16.5% .COM 71,369,595 58,847,629 12,895,342 21.9% .DE 11,673,389 10,442,702 1,250,687 12.0% .NET 10,617,354 8,610,889 2,006,465 23.3% .UK 6,654,263 5,802,462 851,801 14.7% .CN 10,108,622 1,860,716 8,247,906 443.3% Total 122,107,590 94,865,650 27,241,940 28.7% Source: Intelliscan Domain Scan, CNNIC, DENIC, Nominet Note: The growth of .cn is indicative of CNNIC’s aggressive pricing ($0.13/domain) as well as growth in Chinese market overall. 4 ICANN Dubai – March 2008 (ARaad; .ORG) Registry Business Model » Based on a “Deferred Revenue System” (Per US accounting laws) – Means booking revenue over lifetime of domain • Hence, revenue earlier in Fiscal Year is more “valuable” • Longer terms for domain years is more valuable • But… industry has been tracking to slightly over 1 year terms – Need an extensive Deferred Revenue System (DRS) for audit trail and accounting requirements • With detailed financial reports to include: – Renewal rates – Domain years – Net new creates 5 ICANN Dubai – March 2008 (ARaad; .ORG) Deferred Revenue System (Create Domain) Posted 5 day grace Revenue = $X/365 period (not the case for all gTLDs) DRS .ORG Registry “Deferred Revenue Pending System” Registrar Account $X CASH 6 ICANN Dubai – March 2008 (ARaad; .ORG) Cash Basis System – Channel Partner » The registry operates on a cash basis with our channel partners $10,000 .ORG » They pay 100% up front and must maintain cash reserves to register domains. $10,000 .com/.net Registrar $10,000 .info » From a capital perspective, the more TLDs that a registrars sells, the higher the capital requirements are for their business $10,000 .biz Deposit Capital Required: $40,000 7 ICANN Dubai – March 2008 (ARaad; .ORG) Example: Fictional and not minimum requirement The Distribution Channel Registrant Millions globally Reseller Potentially hundreds of thousands (optional) unseen by the registry 926 - # of ICANN Accredited Registrars 79.2% US Critical to the financial 9.8% Europe success of the registry Registrar 9.6% Asia 1.2% Rest of World Registry Whois DNS 8 ICANN Dubai – March 2008 (ARaad; .ORG) ICANN Accreditation Requirements » Registrar Application Process which includes; – Company's financial and technical information – Registrar Accreditation Agreement (RAA) » Financial Considerations: – US$2,500 non-refundable application fee, to be submitted with application – US$4,000 yearly accreditation fee due upon approval and each year thereafter – US$70,000 in working capital requirement. This does not need to be paid to ICANN. – US$500,000 in Commercial General Liability Insurance Coverage 9 ICANN Dubai – March 2008 (ARaad; .ORG) ICANN Requirements » When ICANN requirements are met, ICANN will notify the registry that the registrar is ICANN accredited by that TLD. – Additional information: http://www.icann.org/registrars/ accreditation-documents.htm 10 ICANN Dubai – March 2008 (ARaad; .ORG) Registrar Landscape » The market is concentrated – top 10 account for 65% of market » Almost all are US based » But ..Registrar location does not correlate with registrant location Source: Webhosting.info 3/21/2008 11 ICANN Dubai – March 2008 (ARaad; .ORG) Registrar Trends » Vertical integration: – Become a registry • Ex; Directi, Go-Daddy Registrant – Resellers become registrars Reseller Registrar Registry 12 ICANN Dubai – March 2008 (ARaad; .ORG) Registrar Trends » Horizontal integration – Consolidate – buy your competition • Enom purchasing Bulk Registrar – Aggregate traffic, build domain portfolios and accrue PPC • Ex: Dotster, Intercosmos Registrant – Move into the secondary market • Ex: Fabulous, Moniker Reseller – Domains as media - Ex: Enom Secondary Registrar 1 Registrar 2 PPC Market/Resale Registry Traffic Aggregation 13 ICANN Dubai – March 2008 (ARaad; .ORG) Other Registrar Trends » Registrars want to diversify internationally in growth markets – UK, Germany, Asia-Pacific – Offering ccTLDs, website localization/resellers in market are the prime means rather than IDNs » Competition has driven margins out of primary market domain name sales. Hence many look to diversify their offerings or business » Lack of IDN focus (in the short-term) in the overall channel » Strong focus on small and home-based businesses and a lack of focus on consumers 14 ICANN Dubai – March 2008 (ARaad; .ORG) Relationship Management » Establish an online resource center with tools and material to help educate and sell • Create brand/differentiation • Provide information and material they can easily customize • FAQs • Data Sheets » Set up a database capturing key information about your channel – What are their top markets, what are the expected or projected growth markets? – How can the registry assist that growth? Growth for Registries = Growth for Registrars » Appoint staff who are sales or operational contacts ICANN Dubai – March 2008 (ARaad; .ORG) Relationship management » Encourage feedback to your organization. – Surveys – Tech-support escalation procedures – In-person meetings » Dispute resolutions – Document and communicate your policies – Establish well known procedures for resolution on financial or policy matters Note: As a gTLD we have to observe “Equal Access” provisions ICANN Dubai – March 2008 (ARaad; .ORG) Key Financial/Policy Decisions – Pricing • Set the wholesale pricing • Uniform for all channel? • Pass through any additional levies/taxes/fees? – Credit & Payment Policies – Domain Policies • Grace period? • Domain tasting policies? – Financial auditing and reporting parameters ICANN Dubai – March 2008 (ARaad; .ORG) Key Actions with Registrars » Develop Support Materials – Technical – Marketing / Sales – Policy » Meet & Educate » Follow-up with each account – Meetings to outline specific programs/next steps 18 ICANN Dubai – March 2008 (ARaad; .ORG) A final note about the channel… » Large and constantly changing – Hard to distinguish the 2nd tier in the channel (the resellers) but they are nonetheless important » Market is competitive and increasingly noisy – Registrars/ resellers/ registries » Respect differences and trade secrets » Consistency in communications and treatment is essential 19 ICANN Dubai – March 2008 (ARaad; .ORG) ﺷﻜﺮًا ﻣﺘﺸﻜﺮم.
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