By Jay Daley for CircleID
It is pretty common knowledge now that domain name growth started to drop around two years ago and is falling still. At this rate there is every chance that TLDs that have only ever seen growth will start to see a decline sometime in the next few years. What follows is a theory on where that growth has gone.
It is widely stated that the greater choice provided by hundreds of new gTLDs means that demand is dissipating across them and that’s where the growth has gone. But the 6.5+ million registrations in new gTLDs are nowhere near enough to account for the reduction in growth across established TLDs. So where has the growth gone?
The theory I’m going to put forward is that it’s actually the impact on speculative behaviour that is the primary reason for the decline in growth.
‘speculative’ is used here in a broad sense to cover the following two overlapping behaviours:
- Early purchase of a domain name that the registrant is thinking of using in the future; and
- Purchasing a domain name that the registrant believes has value greater than the purchase price that they can unlock at a later date.
This speculative behaviour originally emerged because of the perceived scarcity of domain names. In other words, it was the perceptions of meaningfulness of domain names by potential registrants that created the scarcity rather than any technical limitation.