The .COM price hike and its impact on you

After the revised contract was signed between Verisign and ICANN to maintain and manage the .COM registry in 2006, the price for the most popular TLD in the world has increased by $1.35. Come January 15th, 2012, .COM prices will rise once again from $7.52 to $8.03 for every year of registration and renewal, making it a rise of $1.86 or 31% over four years.

With this contract, Verisign has the authority to increase .COM prices by 7% every year with a 6 month notice to its Registrars. Furthermore, a similar contract signed in June this year for .NET allows for a rise of 10%.

These price increases also mean that every Registrar, including us, will be forced to increase our prices, given the razor thin and sometimes unjustifiable margins we work with.

While not increasing prices at all isn’t a viable option for us, we decided to evaluate options where we could improve operational efficiency, cut costs and pass on a smaller percentage of the hike to you.

Thus, with this price hike we’ll be increasing the price of .COM and .NET Domains as follows:

As you can see, we’ve tried to ensure that new entrants and smaller providers are able to maintain their profit margins while the big, established providers still get one of the best prices in the industry.

Will this affect your Customers?

Having said the above, I believe this is not going to pinch the end consumer that purchases a single domain or even a couple of them, but will definitely hurt Domainers with 1000s of domains under management. You might also see a preference for ccTLDs for both types of audiences rise slightly (Something you can definitely cash in on with the right marketing efforts).

Another interesting aspect to note and something I’d love your views on is whether this price rise will affect adoption of new gTLDs. Do you think the higher price of .COM Domains will drive Registrants/Domainers to consider new gTLDs more favourably?

How are you going to tackle this?

I have personally been through the previous 3 hikes and have seen our Resellers tackle this in different ways – some increasing their own prices and some not, thereby reducing their existing margins. It’ll be interesting to see how you are going to tackle it this time.

Of course, as Registrars, while we will be passing on this price increase to our Resellers, we’d also like to make sure that you are aware of these facts. Knowing and locking in your current price by renewing NOW can go a long way in helping you stay profitable, especially if you or your Customers have a large portfolio of .COM Domains. I would be glad to address any of your concerns/feedback on this price increase – Do comment and let me know.