Responses incorporated below.
and yet more response incorporated below
- -----Original Message-----
- From:
HJW [mailto:[EMAIL PROTECTED]]- Sent:
Monday, January 07, 2002 6:43 PM- To:
[EMAIL PROTECTED]- Subject:
RE: [icann-delete] Proposal: Registry Re-circulation System
- ...are you not then in effect alerting him or her to the fact that
their name may have some value, and encouraging them to renew rather
than allow the name to expire? This may be a brilliant scheme
for goosing up renewal rates, but how does it help registrars and
registries gain any upside that they would presumably only enjoy if the
name actually changed hands?
You know what I meant, Harold. Peter's will-intentioned RRS proposal was created to deal with the expired name "re-cycling" opportunity. I was just pointing out that in this regard the proposed mechanism didn't seem to fit that description. Of course I wouldn't encourage "domain abandonment." Don't be silly. For the past year now SnapNames has even offered a free service (SnapShot) that people can use to monitor their own domain names to make sure they don't expire accidentally - a very popular feature with the IP community.
I know what you SAID, Ron - "but how does it help registrars and registries gain any upside that they would presumably only enjoy if the name actually changed hands?". That statement strongly suggests to me that the registrars have more to gain if the domain expires, rather than renews. It indicates that the only "upside" to be "enjoyed" is by the name changing hands. (Through your hands, too, I might add)
- Correct me if I'm mistaken, but the reason you NEED the current
registrant's permission is that in order to circumvent the registry, you
want to be able to use the XFER command instead of actually deleting the
name. I suspect the IP constituency might have some serious
heartburn over this as it creates all sorts of liability problems when
the creation date of a domain name record is not reset upon a new
registrant receiving the name. Using the XFER command in this
way exposes the new registrant to potential litigation from the prior
registrant who may claim the registrar did a lousy job of tracking him
down with a renewal notice "because they'd make a lot more money
auctioning off my name than letting me renew it." The original
transfer date matching his filed invoices could imply that the name is
still his since apparently it was never deleted.
- It's also not clear to me that registrars Terms & Conditions extend the current registrant's rights to the domain name past the actual expiration date and into the grace period. If this is the case that the current registrant's rights have already ended then the registrar would essentially be warehousing and speculating with this name during the grace period. Perhaps someone from ICANN or VGRS can clarify this for us. Dan or Chuck?
- It's also not clear to me that registrars Terms & Conditions extend the current registrant's rights to the domain name past the actual expiration date and into the grace period. If this is the case that the current registrant's rights have already ended then the registrar would essentially be warehousing and speculating with this name during the grace period. Perhaps someone from ICANN or VGRS can clarify this for us. Dan or Chuck?
I fail to see the connection you are trying to make. If you're asking me whether speculators should be entitled to make a $500 or $1000 profit on a name while registrars be relegated to making only $1 or $2 per name and also make continuous investments in hardware and software to support your business, I guess I'd have to say that it strikes me that this is somewhat out of balance. The registrars and registries, with these proposals, are merely trying to get a miniscule slice of what you make on the inventory, in order to restore some health and stability to their businesses. I don't see this as a crime. Apparently you do.
I do not set Registrar's prices, they do. Registrars are not making "continuous investments in hardware and software to support MY business, they do this to support thier own business. Many are doing this to profit from the deletion business too, without "your help". The REGISTRY is the only one making the huge cash grab with YOUR proposal, from what I can tell. Oh, yes, SnapNames profits too. Do Not put words into my mouth, I never said anything about Registrar's making a profit was a crime. That the Registry is finding a way around the government mandated $6 cap might be a different matter though...
- It seems to me that there is a distinction between the WLS (as
proposed) and the RRS (as proposed), in that the WLS allows registrars to
capture "backup demand" for any name throughout the entire
year. The RRS only allows the capture of demand during a portion of
the 45-day grace period window, which inherently means it would be
primarily of interest to, and accessible to, speculators, not mainstream
consumers.
SnapNames' site traffic is 100% registrar-driven and as such our customer mix is like registrars' typical customer mix - some speculators, some mainstream, as one might naturally expect. We physically cannot and ethically will not (were we physically able to) discriminate between them, any more so than any registrar can or would. The WLS mechanism collects buyer demand all year long, however, not just during the last five days of a batch-deleted name's existence, and as such will create fair and equal access for mainstream customers who are not scouring delete lists looking for opportunities.
You have edited my question above, I wonder why? You also did not give me a direct answer. What percentage of SnapName's income is derived from speculators? Do I need to name the top 5 speculators so that you can get a handle on this? If it is such an even "blend" of mainstream/speculators, why is this a tough question?
Also, have there been ANY "SnapBack" subscriptions that have even gone to term so that you could definitively state the number of subscriptions that failed? I do not believe that you have been offering the "1 year" subscription for even close to a year now, am I correct? Your statements the "most SnapBacks 'ripen' within the first 60 days indicates to me that most of your customers must be doing thier homework on which names to choose, is this something that most "mainstream" customers do? I know that speculators certainly do this... I also know that most speculators I have spoken with (and you know I talk with a lot of them) do not care for this "100% success for one person" idea either, except for the top five who already know how to game your system.
- Mainstream customers are unlikely to happen to discover a need for a
domain name during any particular 45-day period, learn how to search for
it from about 1.5M names that would presumably be up for auction during
such period, learn how the bidding mechanism works, dig in their pockets
for a credit card to pay a $2 fee (smacks a bit too much of $2 .biz
lottery fees - yikes - bad memories!), and sit around to monitor the
whole thing. Odds are 9:1 that the discovered need for a name would
happen sometime other than that 45-day window. (I'm simplifying
this by assuming the average registration is about one year in term
anyway.) The RRS proposal states that consumers would have
"open, fair access to deleting domain names in an environment
free from high-tech gaming and first-mover advantage" but the
method described doesn't seem to meet this definition.
I know for a fact that speculators are already "whipping up robotic algorithms" to immediately pounce on WLS slots on names the second they go on hold. This seems like a red herring to me.
Which argument are you making Harold? On the one hand you say that a $69 to $99 retail price for a WLS subscription is too high, but on the other hand you say that you know "for a fact" that speculators are already planning to pounce on these slots. You can't be making both arguments at once, so just pick ONE, would you?
Where did I say the RETAIL price was to high? Which hand was that? My argument, or one of them, has consistently been that the WHOLESALE price is way out of line. Just because your "market reseach" shows that the market will "bear" high Retail prices does not mean that the Registrars will charge that, nor does it remotely justify the wholesale price. My comment about the top speculators already formulating "pounce plans" are true. That is what speculators do. You know this, as well as you know just how much income those same speculators bring you today.
Consumers are also not likely to wait anywhere from 1 to 344 days to then have to monitor an auction process, and then be prepared to spend an undefined amount of money to get the name. I can see speculators being willing to do this all day long - they're good at it - but mainstream consumers? For them I believe this type of mechanism would be deemed yet another "game of chance" with $2 betting fees, and could become a lightning rod for litigation against registrars, ICANN, VeriSign, et al. Speculators may be just fine with the game of change (some seem to even thrive on it) but mainstream customers would be anything but enamored by the prospect of it.
The WLS proposal is still a "Game of Chance", in my opinion, due to the fact that it encourages the sale of WLS "positions" on names NOT known to be deleting. If total market saturation were to occur on 32 million names, how many consumers would recieve absolutely nothing? The idea of being able to "switch names" 3 times also indicates to me that this is still something that would require the consumer's attention during the subscription period, if only to avoid recieving nothing in return for whatever fees they paid. Why can a consumer buy a WLS on a name that isn't even going to expire during the term of the WLS? If a name were "accidentally" deleted during this term, would it not have to be returned to the original registrant anyway?
It's a matter of degree, if nothing else, Harold. If there is a chance that a name will renew and not expire, that's outside the registrar/registry's control. But if it expires and the efficacy is less than 100% then, from a consumer's perspective, it is a "game of chance" because this is something that seemingly should be within the control of the registrar/registry. It would be a controllable factor in the instance of the WLS, but not with the status quo, nor with the RRS proposal. WLS subscribers do not need to "monitor" their subscriptions in the same way as having to monitor an auction to make sure they are not outbid by some swift or robotic counter-bidder.
I am not too keen on Peter's auction proposal either, but if it is only a "matter of degree" it is still a "Game of Chance". Again, you failed to address the other questions I posed in the above secion as well.
Further, while I fundamentally agree that variable-pricing makes a lot of sense in the long run, it's extraordinarily tricky getting it right when it comes to domain names, and now doesn't seem the right time to implement such an advanced marketplace concept. Witness the number of different models that have been tried and abandoned by some of the ccTLDs - a perfect one is yet to be found. One concern from an FTC standpoint is that uninitiated domain name buyers might be goaded into paying unwarranted prices for domain names because of the heated action of an auction. This is where sites like NameWinner are actually safer, because everyone there is at least a quasi-professional speculator and knows how to appraise the value of a name. If unwitting consumers are successfully drawn into an active bidding event for domain names, they could potentially be misled into paying exorbitant prices. One benefit of the flat pricing of the WLS structure is that it eliminates the possibility of this sort of complex and problematic consumer experience. Again, you might ask the FTC how many such complaints they've received from eBay customers over this sort of thing.
What this has to do with anything, I don't know. The FTC doesn't much care for monopolies either, as far as I can tell.
You've made your disinterest in mainstream customers' experiences very clear over and over during the past few months; no need to repeat it again. We all understand your agenda.
MY AGENDA? Am I the one trying to form a monopoly? And when have I disparaged the "mainstream customer"? All I have done is repeatedly remind you that your biggest customers are the very same speculators that you consistently eviscerate in the press. For the record, My "agenda", if that is what I have, is for equal access and competition for registrars and registrants alike. My position is that your proposal does neither. Registrars can now choose a number of different models to compete. With your proposal, I see only one.
Finally, putting on my Wall Street hat for a moment, the RRS lacks two especially nice financial features of the WLS which is that it provides no forward visibility on certain revenues (i.e. if 60% of my registrants do not renew next year I know that x% of the names in question would automatically go to a wait listed customer) and no growth in deferred revenue, a key valuation driver. For public companies (there are currently six publicly-held registrars) this is particularly important, as it is for the valuation of any registrar that hopes to be acquired someday.
While the WLS may indeed provide these nice "Wall Street" benefits for SnapNames and Verisign, it has been stated already by some registrars that the margin on WLS sales by registrars will most likely only be a dollar or two. All it takes is for ONE registrar to do it and ALL the others will have to follow suit in order to be competitive. Again, this also seems to be "encouraging domain abandonment" rather than "registration retention", although I agree that a certain percentage will not renew anyway.
Again, you are espousing two conflicting positions, Harry. If, as you say, the registrars will inevitably, through some "curse of nature," choose to price their products $1 above cost, then what difference does it make where the product is priced? The wholesale price proposal was based on a standard healthy margin range predicated upon a retail price that market research indicated the market would bear, producing the 5% market penetration estimate. By your theory it doesn't matter if VGRS proposed a $0.40 price or a $400 price, the registrars would only charge a $1 or $2 mark-up.
My name is not "Harry", and you know that too. I have kept my dialog restricted to the subject and respectful. I strongly suggest that you do the same.
Again, you conveniently edited my question above too. I repeat, is it your contention that every registrar "hopes to be aquired someday"? By whom? Verisign?
As far as the $1 or $2 over cost retail pricing, I was not the one to suggest that. The registrars themselves have stated this several times, and strangely enough "curse of nature" was not one of the reasons given. From your statement above, am I to read that you arrived at the $40 wholesale cost only because of what you deducted the "Retail cost" that you decided "the market would bear" and NOT justified by actual cost to produce and operate? Thank you for confirming one of the most common complaints of all the registrars that I have seen post. I do not believe it is me espousing two conflicting positions here, Ron. Perhaps you have me mistaken with somebody else? By the way, you might have a better chance of selling this proposal to the registrars if the cost was lowered to $0.40, but even then I think you would still find resistance.
Many registrars would prefer to have the chance of creating a significant new revenue stream, nonetheless. And in case you hadn't noticed, those registrars who do hold the high water mark on domain name pricing, at $35 retail, are by far the most profitable and successful of the lot, despite the continued marketing of $6.50 names at the bottom end of the market. I know you subscribe to State of the Domain, so I'm somewhat surprised you are not aware of these readily available financial analyses. This assertion that all registrars would be "forced" to discount the price to $1 above cost is the most absurd thing I've heard since Bin Laden's last videotape. It's a very poor argument for how to properly price a new product.
Again, I submit that yours is not the only "true path to enlightenment" for the registrars to "create a new revenue stream". I never stated that registrars were not interested in more revenues, just that the vast majority of the "revenues" from your offering does not seem to go to the registrars. I do indeed enjoy your "State of the Domain" reports, and those same Registrars you speak of charging the high dollars seem to be the same ones losing maket share. I am sure that the same registrars that shared thier thoughts on the inevitability of $1 to $2 markups will appreciate your connection to Bin Laden's last videotape as well.
For the record, while it is true that I do have a vested inerest in the outcome of this, no matter what that may be, my position is and always has been focused. My Position is equal access to this resource combined with CHOICE for registrars and registrants alike. Your model does not fit my definition of choice in that there is only your model to choose from.
As far as your model giving "equal access" to the mainstream registrant, it is undeniable that you have the most market exposure but I still submit that it is only a few keen speculators that know how to get the jump on everybody else (and have the bankroll behind them) for the premium names, leaving the "little guy" out in the cold. At least with the current system, the "little guy" still has a chance by utilizing any of the several other services available. What happens if your proposal becomes reality? The "little guy" will just get left out in the cold, with nowhere else to turn.
Honestly, does SnapNames derive a majority of its income from speculators, including a few that spend $50,000 at a time, or is it really just the all the "little guys" that make up the majority? Would those same High Rollers "spread the wealth" amongst the registrars (as they do now, for the registrars active in the deletion game) or will they just gravitate towards one spot with your proposal, presumably the least expensive, since all other incentives are gone?
Harold Whiting
