The domain name industry

The domain name system plays a critical role in how more than 3.2 billion users interact with the Internet. Worth over $4 billion, the domain name industry continues to grow. There are currently more than 300 million domain names registered globally.

There are two types of top-level domains (TLDs). Country code top-level domains (ccTLDs), are those representing a country or state, such as .CA, .us, and .uk. Generic top-level domains (gTLDs) are those such as .com, .net, and .org. Between 1984 and 2013, only 22 gTLDs existed, with .com representing half of all domain names registered.

2015 was a banner year for the domain name industry.The Internet Corporation for Assigned Names and Numbers (ICANN), the global body charged with managing the domain name system, approved more than 1,000 new gTLDs. Within less than a year, registrations for these new gTLDs topped 22 million.

At the same time, government-led initiatives in China led to unprecedented domain industry growth there, as investors looked to the domain market to make-up for shortfalls in other traditional investment sectors. This has contributed to a new speculative market for domains, particularly across Asia. As a result, this was the first year that .com warned investors that they would experience a decline in quarter-over-quarter domains under management. According to a report in Quartz from earlier this year, upwards of 75 percent of released two letter domains have been purchased by Chinese Registrants. In Domain Name Journal’s annual state of the industry report, there was near universal agreement that market movements in China were driving significant numbers of registrations.

With the rise of the new gTLDS and their potential for branding to the right of the dot, businesses and investors typically outside the domain industry have started to take a greater interest in domains.

Global top-level domain registration trends

Chart with data from the domain researcher Zook showing that the top 6 gTLDs have had higher growth in numbers of domains registered than all ccTLDs. However, the top six gTLDs and all ccTLDs are converging.

Source: Zook data

Despite the activity in China and across Asia, global growth in the domain industry has slowed over the past two years. TLD growth overall in 2015 and 2016 frequently fell below one per cent quarter-over-quarter. ccTLD registrations historically outpaced those of gTLDs between 2007 and 2014,with growth rates between 2 and 5 per cent per quarter. With the introduction of over 1,000 new gTLDs, ccTLDs may start to take a backseat to their generic counterparts.

Global top-level domain growth (excluding .cn)

Chart with data from domain researcher Zook that shows  slowing domain growth rate for gTLDs, ccTLDs and all domains total. This data also shows a spike in Q4 2015 to Q1 2016 for gTLDs.

Source: Zook data

Over the past six quarters, gTLDs have continued to experience modest, yet positive growth, while ccTLDs have been living with negative growth. Growth rates for ccTLDs, excluding China, have declined to less than zero over the past six quarters, suggesting a possible reversal of fortune for these domains as new widely-available gTLDs crowd the market.

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.

This is a simple data table
  gTLDs ccTLDs (Without China) ccTLDs and gTLDs (Without China)
Q1 2010 2.98% 3.61% 3.21%
Q2 2010 2.32% 3.23% 2.66%
Q3 2010 2.15% 3.06% 2.49%
Q4 2010 2.02% 3.32% 2.51%
Q1 2011 2.82% 3.87% 3.21%
Q2 2011 1.75% 2.97% 2.21%
Q3 2011 2.01% 2.95% 2.37%
Q4 2011 1.69% 4.00% 2.58%
Q1 2012 2.41% 3.67% 2.90%
Q2 2012 1.19% 5.01% 2.70%
Q3 2012 0.79% 3.05% 1.70%
Q4 2012 0.65% 3.48% 1.81%
Q1 2013 1.39% 3.36% 2.21%
Q2 2013 0.63% 2.75% 1.52%
Q3 2013 0.86% 2.88% 1.72%
Q4 2013 0.79% 1.89% 1.27%
Q1 2014 1.44% 2.49% 1.89%
Q2 2014 0.26% 0.88% 0.53%
Q3 2014 0.49% 2.10% 1.19%
Q4 2014 0.29% 2.13% 1.10%
Q1 2015 0.93% -0.57% 0.26%
Q2 2015 0.13% -0.78% -0.28%
Q3 2015 0.97% -0.69% 0.24%
Q4 2015 3.22% -0.41% 1.64%
Q1 2016 2.46% -0.24% 1.30%
Q2 2016 0.39% -0.80% -0.11%

Top six [legacy] gTLDs – market share

Chart with data from domain researcher Zook that shows that the ccTLDs have slowly captured market-share in the global domain market since Q1 2010.

Source: Zook data

The top 6 gTLDs and ccTLDs have nearly all domain maket-share globally – with ccTLDs taking over 45 per cent of the market.

The top six legacy gTLDs, (.com, .net, .org, .mobi, .info, .biz),continue to represent more than 99 per cent of total gTLDs, and 54 per cent of all registered TLDs. All, but .mobi, have seen an increase in growth. With the introduction of more than 1,000 new gTLDs in the market over the last 18 months, however, three in the top six (.mobi, .info and .biz) no longer dominate the TLD market. The gTLD leader by far continues to be .com. Even with new competition, desire for .com domains remains high and its growth is steady. Investors are particularly interested in snapping up .com domains as an asset hold, with availability becoming scarcer.

Top 3 gTLDs

With 130,265,726 registered domains, .com continues to be the most popular TLD in the world. The second most popular domain, .net, has 16,130,302 registered domains, 7.5 times fewer than .com.

Top 20 ccTLDs

This is a simple data table
ccTLD Country Last Period Domain Count
cn China 19,502,493
tk Tokelau 19,242,447
de Germany 16,126,473
uk United Kingdom 10,679,523
nl Netherlands 5,643,201
ru Russian Federation 5,245,491
br Brazil 3,869,791
eu European Union 3,815,601
au Australia 3,035,915
it Italy 2,960,676
fr France 2,943,299
pl Poland 2,712,473
ca Canada 2,484,422
in India 2,114,209
co Columbia 2,018,450
ch Switzerland 2,005,411
es Spain 1,819,818
us United States 1,680,153
be Belgium 1,549,082
jpu Japan 1,431,769

Among ccTLDs, .cn and .tk continue to lead the industry. .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. As previously mentioned, registration trends for .cn should be treated with caution, given market disruptions caused by registration rule changes.

Germany’s ccTLD, .de, follows third with 16,126,473 domains under management. CIRA holds a strong market position, ranking 13th globally.