The domain name industry

The Internet has become a ubiquitous part of the lives of nearly 2.5 billion people worldwide. In the 28 years since the first domain name was registered in 1985, more than 265 million domain names have been registered, a growth rate unparalleled in any other industry at any time.

Generally speaking, there are two types of top-level domains: generic top-level domains (gTLDs) (.COM, .NET, .ORG, etc.) and country code top-level domains (ccTLDs) (.CA, .US, .UK, and so on). It should be noted that many ccTLDs (.CA included) have presence requirements for registering a domain name, limiting their potential market. Others, such as .CO and .TK, have no such requirements and can be registered by anyone, regardless of place of residence.

Global top-level domain registration trends

The domain boom continues with steady growth in new registrations every quarter. Over the last 5 years, registrations are up by 70 per cent to almost 240 million domains online.

Global top-level domain growth rates (without .cn)

Note: We have removed .CN from this analysis due to a change in registration rules within China's .CN domain in 2010 that resulted in sudden and dramatic growth, then a drastic decline in registrations. This anomalous activity would result in confusing data for presentation.

Total TLDs globally - 56% gTLDs, 44% ccTLDs

By the end of June 2013, the top six gTLDs accounted for 56 per cent of all registered domain names (147,570,438 in total). At the end of the same period, ccTLDs accounted for 44 per cent of total registrations (115,032,554 in total). However, the growth rate for gTLDs has been steadily decreasing, whereas the growth rate for ccTLDs has increased slightly over the same time period.

gTLD Top Ranking

gTLD Top Ranking

With 111,719,747 .COM domain names registered, it continues to be the most popular TLD in the world accounting for approximately 40 per cent of all domain names registered. .COM’s registrations outnumber those of .NET, the second most popular TLD in the world, by more than seven times.

Among ccTLDs, .TK is the most popular in the world with 19,754,054 domains under management. .TK is the ccTLD for Tokelau, a territory of New Zealand that has a population of approximately 1,400. The tremendous popularity of .TK is due to the fact that there are no residency requirements to register a .TK domain name, and .TK domain names are offered for free (for the first year) with minimal restrictions.

Top 20 country code top-level domains

Top 20 country code top-level domains

Top 25 top-level domains

Top 25 top-level domains

Top-level domain registrations per 1,000 Internet users, 2013

.CA continued to perform well relative to its counterparts. For the second year in a row, .CA was the 19th most popular TLD in the world and the 14th most popular ccTLD in the world. In terms of penetration, there are 71.3 .CA domains for every 1,000 Canadian Internet users; gTLDs enjoy a penetration rate in Canada of 165.6 per 1,000 Internet users. .CA’s growth rate is the sixth highest overall.

Top-level domain registration per capita (1,000s), 2013

In most countries, ccTLDs enjoy greater per capita penetration than gTLDs in their respective nations, with the exception of Canada, the United States, France, and Australia. In the United States, gTLDs outperform the .US ccTLD by a ratio of 400 to one. In Canada, gTLDs – predominantly .COM – outperform .CA by more than double. Due to Canada’s shared cultural values, language and geographic proximity with the U.S., it is not surprising that gTLDs, and especially .COM, enjoy a greater market share.

The Internet has become a ubiquitous part of the lives of nearly 2.5 billion people worldwide The Internet has become a ubiquitous part of the lives of nearly 2.5 billion people worldwide

In the 28 years since the first domain name was registered, more than 265 million more have been registered In the 28 years since the first domain name was registered, more than 265 million more have been registered

There are two types of top-level domains – generic top-level domains and country code top-level domains There are two types of top-level domains – generic top-level domains and country code top-level domains

In 2013, the rate of growth for all top-level domains averaged 2.51 percent In 2013, the rate of growth for all top-level domains averaged 2.51 percent

The five most popular TLDs in 2012 were generic, with ccTLDs making up the remainder of the top 20 The five most popular TLDs in 2012 were generic, with ccTLDs making up the remainder of the top 20

.CA is the 19th most popular TLD in the world and the 14th most popular ccTLD in the world .CA is the 19th most popular TLD in the world and the 14th most popular ccTLD in the world

New gTLDs

1000+ new gTLDs

The domain name industry is facing one of the most significant changes in its history. In 2013, ICANN began the process of potentially adding 1,000 new gTLDs to the Internet’s root. These domain names will start to be added in 2014.

A change of this size is akin to deregulation, and the impact on the industry is unknown. One thing is clear, however. It will affect all stakeholders in the domain industry including Registries, Registrars and domain name holders, as well as Internet users in general.

The introduction of new gTLDs will significantly increase the domain name choice for consumers. Registrars will have an enhanced product line to offer. This will result in a more complex market, as the incumbent TLDs, like .CA and .COM, will begin to compete for ‘shelf space’ with Registrars. New and incumbent TLDs will likely enhance their marketing activities – if they haven’t already done so – in 2014, as the market becomes much more competitive.

New gTLDs also brought increased mainstream media attention to the TLD industry. Although an integral part of the Internet’s operations, TLDs are generally not ‘top-of-mind’ among most Internet users. This enhanced visibility of all TLDs will have a positive effect on the industry as a whole.

In March 2013, CIRA surveyed Canadian Internet users to gauge their interest in new gTLDs. While slightly more than half of respondents have no interest in new gTLDs, there is virtually no difference between those who are interested (20 per cent) and those who ‘Don’t know’. A small percentage (six per cent) responded that they are ‘very interested’.

Canadians' interest in new gTLDs

80% of RARs intend or are considering adding new gTLDs

With 40 per cent of .CA Registrars indicating that they will add and new gTLDs to their product offering and 40 per cent considering doing the same, new gTLDs will surely have an impact on the domestic TLD market. Fifteen per cent of Registrars surveyed are not sure if they will be adding new gTLDs, and five per cent have indicated that they will definitely not be adding them.

As new gTLDs are offered by Canadian Registrars, interest in them will increase. The real winner with their introduction will be the Registrant, with access to more product choice and a competitive marketplace. This will ameliorate the current saturation of the primary gTLD market, particularly as the Internet is about to add two billion more people online.

The introduction of new gTLDs will significantly increase the domain name choice for consumers The introduction of new gTLDs will significantly increase the domain name choice for consumers

Global Internet access and use

Global Internet access and use

There are currently more than two billion people connected to the Internet. It has become a critical part of the global social and economic fabric, bringing enhanced communications, access to information and economic opportunity to much of the world. According to the International Telecommunication Union (ITU), in 2013 nearly 78 per cent of households in the developed world had Internet access.

In 2013 nearly 78 per cent of households in the developed world had Internet access.

The Internet has been slow to bring that prosperity to the developing world. Only 29 per cent of households in the developing world had Internet access in 2013. That said, since late 2010, the growth rate for household Internet access in the developing world has been steadily increasing, outpacing the growth rate in the developed world.

Percentage of households with Internet access by level of development, 2002-2013

Note: In this chart, the values shown for the developed and developing worlds are relative to their populations, and the percentage of households with Internet access for the ‘world’ includes the population of the globe.

Individuals using the Internet by level of development, 2008 and 2013

Individuals using the Internet by level of development, 2008 and 2013

Source: International Telecommunication Union

Within the next five years, approximately two billion more people will be brought online, doubling the current population on the Internet. Like the introduction of new gTLDs, this expansion will have a profound effect on the Internet ecosystem for a couple of reasons:

  • First, those new users will come from the developing world. In spite of the low rates of Internet penetration, the number of individuals in the developing world using the Internet is already nearly twice that in the developed world. When Internet penetration rates in the developing world rival those in the developed world, and they will, Internet users in Asia and Africa will greatly outnumber those in the rest of the world.

    While English may be the dominant language on the Internet today, the English-speaking world will make up a small minority of the online population.
  • Second, they will largely be accessing the Internet via a mobile device, due in part to sub-standard telecommunications infrastructure. In fact, it is possible that in five years, many of the people online will have never used a desktop or a laptop to get online. While fewer households have Internet access in the developing world, mobile subscription rates are already approaching 100 per cent. In 2013, more than 17 per cent of the globe’s Internet traffic came from a mobile device. With two billion new users coming online using mobile devices, this number will increase greatly. In 2012, ComScore predicted that mobile traffic will surpass ‘traditional’ Internet traffic by 2014.

Mobile-cellular subscriptions per 100 inhabitants, 2001-2013

Active mobile-broadband subscriptions per 100 inhabitants, 2007-2013

There are currently more than two billion people connected to the Internet There are currently more than two billion people connected to the Internet

In 2013, nearly 78 per cent of households in the developed world had Internet access In 2013, nearly 78 per cent of households in the developed world had Internet access

29 per cent of households in the developing world had Internet access in 2013 29 per cent of households in the developing world had Internet access in 2013

Over the next 5 years 2 billion people will be brought online, doubling the population on the Internet Over the next 5 years 2 billion people will be brought online, doubling the population on the Internet

Mobile subscription rates in the developing world are approaching 100 per cent Mobile subscription rates in the developing world are approaching 100 per cent

In 2013, more than 17 per cent of the globe’s Internet traffic came from a mobile device In 2013, more than 17 per cent of the globe’s Internet traffic came from a mobile device