as a footnote to this, what we have seen are additonal costs being attributed today
to ICANN's "cost recovery" process. This includes unanticipated costs with:
1)the .name registry over exclusive e-mail services
2)the .pro registry over
marketing expenditures
3)the .coop registry over exclusive registry/registrar
abilities
4)Unexpected legal expenditures as a result of the the .biz lottery
scheme
Each of these examples, to me, were nothing short of an attempt by
each "winning" applicant to overcome weak, per-unit pricing models. My point
with Afilias is that they probably will be able achieve positive cash flows but at
the expense of some stated proof-of-concept objectives - such as the execution of
a sound marketing plan.
The ICANN process clearly placed the marketing burdon
upon the first round registries/applicants. Yet marketing budgets were not
built into the per-unit pricing model (at the 90% confidence level) by these winning
applicants. Is it not reasonable that Afilias would have garnered 700,000 units
today at $10 each instead of $5.75 allowing some wiggle room for sound marketing
execution? I think so. Instead, actual cash flows are not allowing for
it, imo, and certain proof-of-concept objectives are unable to be fulfilled as a
direct result.
NSI-Registrar, for example, carries a gross margin of about
$15 per .info & .biz registration per year. As of 12/31, NSI-Registrar had
a combined 160,000 unit registrations in info & biz, more than any other registrar.
That's $2.5M in margin rivaling the revenues of each of the new registries (info
& biz). To my knowledge, none of the registrars are being required to perform
marketing strategies - or definition - of the new TLD's. Chosen TLD financial
models - including per unit pricing - have failed or retarded certain proof-of-concept
objectives (such as true competition).
Ray