Looking at the price schedule for the .biz lottery:
> Pre-registration submissions (lottery system):
>
> - up to 5,000 pre-registration submissions: $3.00
> - 5,000 - 15,000 pre-registration submissions: $2.70
> - greater than 15,000 pre-registration submissions: $2.30
Presumably someone at OpenSRS anticipates the likelihood of an RSP
submitting in excess of 15,000 pre-registrations. So let's say I submit
15,000. I would have to pay up front:
15,000 x $3.00 = $45,000, plus
15,000 x $10.00 = $150,000, for a total of $195,000.
When the dust finally settles, I get back $10 per failed registration, plus
a (delayed) rebate of 15,000 x $.70, or $10,500.
If OpenSRS pays $2.00 per pre-registration (assuming they can't negotiate a
better rate from the registry), their gross profit on the pre-registration
fees is $4,500 (15,000 x $.30). In addition, they have the use of (or
interest on) the $150,000 for up to three months, and the rebate of $10,500
for up to four months. Add to that the margin on any successful
registrations, which I don't know for sure, but let's assume it's around
$4.00 per domain year, as for the other gtld's.
The unknown, of course, is the percentage of successful registrations, which
must be somewhere between 0 and 100%. We could argue all day about the
likely figure, but nobody really knows. The facts are these:
1. If a single RSP submits more than one pre-registration for the same
domain name, OpenSRS will have collected more money than the RSP can
possibly owe in the end.
2. By collecting $10.00 per domain up front (as opposed to say, $6.00),
OpenSRS is not only "covering" it's cost of the potential registration, but
also it's own margin or gross profit for said registration.
3. By increasing the financial burden on the RSP for each pre-registration,
OpenSRS is decreasing the number of possible pre-registrations, reducing the
potential return for everyone, including OpenSRS, the RSP, and the registry.
4. If potential .biz registrants pre-register somewhere else because of the
high cost imposed by OpenSRS on its resellers, more successful registrations
will occur elsewhere, depriving OpenSRS and its resellers of potential
revenue (and future renewals).
I am not privy to the thinking behind the announced policy, but from my
perspective it would be in the best interests of OpenSRS to take the
long-term view and make it as easy and affordable as possible for RSP's to
submit .biz pre-registrations.
