What Success Means to Us: Measuring What Matters
A deep dive into Radix’s first-time renewal data, and its impact on revenue.
When Covid hit in early 2020, domain names, along with all sorts of digital products and services, saw a sharp boost followed by a sustainable acceleration in growth. A report by McKinsey claimed that 10 years’ worth of progress in terms of e-commerce transition was achieved within the first three months of the lockdown. IBM said it was worth 5 years of digital progress. Adobe said that’s between 4 to 6 years.
With this came heightened activity in new business formations and existing businesses going online to maintain continuity. This led to a direct increase in the demand for domain names and other products related to building websites.
The overall domain market saw a significant jump in new registrations in the first few months. At Radix, we saw that .online and .store had the most uptake, growing by over 60%* between 2019 and 2020. Our other TLDs including .site, fun, and .tech also saw a spike in registrations.
Historically, major events like this have been the trigger for disruption and change. This time around, the pandemic ushered in a new spurt in doing business online to the extent that owning a website was no more a good-to-have. It was a must. After all, do you even exist if you are not available online in the post-pandemic world that we live in?
It has been over a year since we witnessed these major market shifts. Looking at the domain registration and renewals data since then led us to some interesting insights about the market in general and our TLDs in particular.
Measuring first-time renewals since the pandemic
When reviewing 1st-time renewal rates for nTLDs registered in the Jan – June 2020 period, the aggregate first-time renewal rate has remained steady, very similar to 2019. Details of the collection of data and the methodology used are explained in the notes below.**
What’s more, the nTLDs that make up the top 10 in terms of absolute renewals (based on a monthly avg) also remain the same. Most of them, however, have seen significant growth in their 2021 monthly renewal numbers (absolute count of renewals).
Specifically looking at Radix TLDs, we see that .online, .store and .site have seen a 60%+ increase in absolute first-time renewals, and .tech has seen a growth of 35% for the same period.
Taking a deeper look at Radix’s renewal data, we find that in the period from Jan 2021 till Jun 2021, Radix saw an 80% increase in first-time renewals compared to the same period last year. The upward trend takes Radix’s 1st-time renewals to 50,000+ renewals per month.
Putting this into perspective, here is a stacked view of the first-time renewals for .online in comparison with other nTLDs, and ranked by the absolute number of 1st-time renewals. .online has 60% higher first-time renewals compared to the next ranked nTLD. Other Radix TLDs make up for over 30% of the top 10 renewals market share.
Impact of renewals on revenue
As renewals and renewal revenue are much more concrete indicators of market success versus sheer registration volume, we took our study one step further to determine the renewal revenue generated for Registrars.
In order to do this, we used the 3rd party renewal data and applied standard renewal costs across registrars, assuming that the margin across TLDs will be more or less the same. We then stacked up all nTLDs in the order of those that generate the most renewal revenue for the industry.
.online leads the charts by adding over $2.3Mn in first-time renewal revenue (this does not include the registrar markup on registry cost), followed by .store at rank 2, adding over $1.2Mn in first-time renewal revenue.
This revenue only includes 1st-time renewals and doesn’t account for annuity premium renewal revenue either.
It is worth noting that .online alone accounts for 26% of overall renewal revenue amongst the top 10 nTLDs. And the 4 Radix TLDs that appear in the top 10 above account for 54% of the total renewal revenue generated by the top 10 nTLDs.
While these are promising numbers, we will continue to track the performance of renewals through the next few months as well. We are eager to see how things shape up as we move beyond the peak of the pandemic.
Why measuring renewals matters
At Radix, we have a fundamental belief: you cannot improve what you don’t measure. Constantly looking at the scoreboard is how we track the health and growth of the business. That the domain industry is the most measurable industry in the world only makes data tracking a lot more comprehensive.
We understand that a TLD’s renewal performance is also an indicator of the quality of its domains under management. Ultimately, the true measure of success for any nTLD is qualitative usage, a goal fulfilled by marketing strategy and focus on renewals.
This philosophy has led to many innovative marketing initiatives that are reflected in the awareness campaigns we have executed in the recent past. From startin.tech to pitch.tech to academy.get.online, Radix’s marketing campaigns are about the enablement of new businesses.
After all, the growth in the domain industry is dependent on the growth in businesses, old and new, going online. For us and the industry, on the whole, it’s a unique opportunity to be at the starting point of the web presence of a business and we’re excited about the times ahead.
* This compared new registrations numbers between 2020 and 2019 and excludes registrations from Chinese registrars.
* All data excludes data from Chinese registrars. Given that the China market has differential pricing and other market nuances, the geo has been left out of this study.
* A version of this article was originally published on DNJournal.com.