New nominet pricing

It is impossible for self-managed tags to avoid the significant price rise.

There is no valid explanation to be had. I was on the phone long enough to Nominet yesterday to realise that. The "costs" line doesn't hold water, and there is no alternative explanation that matches the facts.

As a director, you should be putting the brakes on a 50%+ increase in the core product sold by the company you provide oversight for. That should be true in any business or industry.

The red flag is much much redder this time, because it's a 50% increase in a situation where historically the price has been frozen for nearly the entire existence of that industry (the web in 1999 was not the must-use household thing it is now, even if the first .com boom was under way)

It's true that Nominet's costs have risen since 1999. How could they not? They had so few names under management back then they could have done everything on a couple of servers. I exaggerate, but not that much.

But their revenues have risen many-many-many-many-fold since 1999 too. Not only do their 2015 revenues cover their 2015 costs significantly more than adequately, but they also provide for a fat, juicy surplus to be syphoned off to the Nominet Trust and another chunk of cash to get stashed in the ever-growing float in Nominet's bank accounts.

So the "logic" provided for the price rise, that of rising costs, falls to pieces. In an automated industry like Nominet is in, the cost that matters is not the total cost (so long as it is more-than-covered by revenues) but the marginal cost i.e. how much of that cost is imposed on every new domain registration. The latter is a matter of pennies since all the fixed costs are long since taken care of by the revenue from the existing registrations, so the marginal profit margin on each registration is likely to be of the order of 90%-95%.

That is the reality of the situation. It's all there in black and white in the Annual Reports, for everyone to see.

The facts do not describe a business in "distress", they describe a business floating in gravy.

Given that and Nominet's current requirement to operate on a cost-recovery basis, I cannot understand either their actions or your relatively laid-back, laissez-faire attitude to this.

 

Respectfully (a word I dislike because we know what it really means) you're smart enough to know that you're putting up a straw man argument by invoking the fact that none of us can predict the future.

What we can however do is look at the lessons we have access to. None of the 1,000+ new GTLD has gone as far as to wobble the pedestal that .com is on, despite the fact that some are extremely well funded. Renewal rates in general have not been at "replacement" level i.e. most new GTLD namespaces are shrinking.

Meanwhile, the new and exciting and jazzy and innovative .uk has been met with a "so what" response - and even if it dethrones .co.uk in time it's an internal competitor because Nominet offers both.

The .london domain is toast (from a competitive point of view - I'm not suggesting the registry is going to go out of business). It launched in a blaze of publicity and a flurry of partnerships, but deletions for non-renewals are outstripping new registrations now that we've passed the first anniversary of launch (and besides, it's a regional domain and therefore not even on the radar screen of 85% of the country)
https://ntldstats.com/tld/london

So unless you're describing the death of domains as a concept then there's quite literally no chance of this so-called "competitor" emerging.

And if you really want to make the case that Nominet is protecting itself against the day when people don't need domains at all, I will direct your attention back to that ever-growing pile of cash in their account which is more than adequate for any business to pivot and reinvent itself.

 

Nominet's PRIMARY purpose is and has always been the management of the .uk namespace.

It may also have a post-facto, self-imposed public purpose obligation with respect to what it does with the small surplus it may generate from doing so, but the entire organisation was tasked to do one thing back in 1996 and that thing hasn't changed. We shouldn't be pretending it has!

If Nominet really want to go off and do something else - and fund-raise to do so off the back of registrants - then .uk management should be put out to tender with a very narrow remit enshrined as part of the tender process.

It's high time Nominet's wings are clipped, in any case. They seem to do egregious things that are counter to the best interests of the .uk namespace every few months on average these days.

 

Very well put Edwin. However none of your points will be addressed I suspect. In every post invincible has simply stated 'costs are rising' with no further explanation. The facts are we know nominet don't need to raise the prices this much, nominet knows nominet don't need to raise the prices this much. Nominet *want* to raise the prices and they will. The same as they *wanted* UK which nobody except the main large registrars wanted. They have *wanted* to do lots of things in the past and, on the odd occasion where people have been given a say, they have totally ignored that say and performed exactly as they *want*. Do they, and you Invincible, really believe people are too stupid to see the obvious?
However if I was nominet I would just say it exactly like it is. 'From march we are putting the prices up. We will no doubt increase our salaries way beyond these rises. We will no doubt raise directors renumerations way beyond these rises. We will have our board meeting in a 6 star hotel in Dubai and fly first class. If you don't like it TOUGH. Go and buy another extension because we barely give a toss about the co.uk as it is. We're riding the gravy train baby and nobody is going to stop us.' You can't claim to be non-profit, tell people how many extra millions you have, 'give it away', then tell people you need to raise prices because of increasing costs. The whole thing has been a farce since day one.

 

I'm still waiting for the government to take notice of the many many many millions which they could take.

 

I think it's more of a gravy train than a gravy boat



All aboard!

 

Something else to think about...

The 2 year registration cost of a domain name for a responsible and sensible business will, over the 2014-2019 period, have risen 300%.

2014 picture: £6/2 years (VAT included)
2019 picture: £18/2 years (£9 for the .co.uk, £9 for the .uk)

Now if that's not naked profiteering, I don't know what is!

Nominet can do what they like, but I wouldn't expect any unrelated party to agree with what they have chosen to.

 

Hoping common sense will prevail!

Some very useful observations so far (especially from Edwin).

The landscape of the UK namespace will change forever if Nominet get this through.

Many UK portfolio holders have sold on or let expire their portfolios (well done, those that could see what was coming).

As a portfolio holder, due to the 50% price increase, I will reduce my .co.uk portfolio even further than I have done to date, reducing NET revenue to Nominet.

This reduction of my portfolio also takes into account, shortly having to double the costs with acquiring the .uk.

Due to the dropping of .co.uk domains, there will be more UK domains to register, which I can see as the only benefit of the current policy.

The Director's personal windfall will be short lived as I can see action being taken against the direction of Nominet.

Nominet got it so very wrong with .uk in there first auction announcement, with a weak premise to push it through, they have got it very wrong this time.

If Nominet want to enter some game of providing higher prices, so they can slash them like giving .uk away free for a year or big promotional budgets to registrars, these are all cheap con's and should be avoided.

Nominet's arguments of justification for a price increase,
simply do not stand up to any scrutiny.

Unless Nominet can show they need to spend £10 million+ in the next few years and then every few years after that, on extra capital expenditure, it makes no sense at all.

Hoping that common sense will prevail!

Stephen

 

Stephen, it's not going to be solved by conventional routes. I put it to 2 people at Nominet on the phone yesterday and these price rises are 100% happening.

 

So, the higher the price, the greater the saving. Hmmm.



There has always been a funny smell at Sandford. It now looks like the wind is blowing the other way.

 

He's probably off fighting with the Peshmerga, but don't you miss people like Graeme at times like this.

Nominet were always going to do this, these last years will have seen scores of people jockeying for positions as it evolves and won't do diddly or put their head up for fear of falling off the gravy train.

The member elected directors are not going to be of any use, if they say anything to rock the boat someone may point out they may not have made full disclosures on their applications and terminate their tenure.

Shame as Noninet have awesome staff

 

Assuming they don't increase prices before then.

- Rob

 

I don't agree with it in principle as I think it stinks really but who's really going to notice other than portfolio holders? And shoot me down if you like but maybe it will help somewhat in making people think twice about snapping up and holding onto any domain name that they think might have some value rather than a real end user being able to register it, for a change.

 

I think you may have stumbled on to the wrong forum, netmums is over there somewhere >>>

 

Are you going to decide who a 'real end user' is then? The industry could do with someone to make these decisions for them.

 

Since Nominet themselves (historically the domain investor's worst enemy) has deemed domain investment a valid business activity, this particular argument is not only dead and buried, it's so deep there are dinosaur bones mixed in.

 

Possibly. Maybe that's the point. Looking at it from a non domainers point of view, in reality "normal registrants" won't even notice or care about a price increase. I doubt they even know what a domain costs or know or care who Nominet is. I myself don't really have any interest in Nominet and I'm a member. Not saying I agree with the increase because I don't but £1.25 is less than half a lager so somebody renewing a domain for their business or whatever won't give a stuff, as long as it works that's all that matters.

I've already decided who a real end user is and I'm not concerned of what the industry thinks or does at this point.

That's fair enough. If people can make a living from it then good luck to them but I've seen one comment on the article linked to earlier I think about somebody trimming their portfolio because of the price increase. That tells me they're obviously just holding domains that somebody else might use just to profit from them which their perfectly able to do but they can't be that valuable if they'll just let them go. They want to sell the domains for inflated prices but complain when Nominet inflates theirs. It's a bit like the pot calling the kettle black.

 

No. It's simple maths.

If you take the example of a smallish portfolio (1,000 names)

The current holding cost is £3,000/year (£5+VAT for 2 years)
The holding cost from March 2016 will be £4,500/year
The holding cost from June 2019 will be £9,000/year (.co.uk + .uk)

Now imagine they sell £5,000/year worth of domains. That makes it a nice little earner - perhaps an extra holiday or a few more gadgets under the Christmas tree. But at £4,500/year it becomes a marginal proposition that probably won't repay the effort put in on an hourly basis, and at £9,000/year the business is dead.

There are plenty of businesses in the real world whose business model can't survive a 10% price change (a lot of retailers operate on margins less than that) so it's actually very easy to see how the 50% then 200% price rise could make maintaining existing portfolio levels untenable without really saying much about the average portfolio quality.

 

What non domainers fail to realise is, while they piss and moan about paying say £100 now, 50% increase on stock holding, for someone like myself with 500-600 names, its adding thousands, if I make 20-30 sales per year, how much do I add on to each sale ? Now who is going to cry when my minimum price of £249 on a low end name is now £319 (made up figures).

Many may say who cares if domainers pay more, well they will care since domainers hold most the names.

 

It's a kick in the mush to domainers, and they know it!

The only way to get back at them is to point out any of their failings, because the membership has no power to do anything else!