News from the Internet Corporation for Assigned Names and Numbers (ICANN) recently has a lot of business people in a stir. Intellectual property and branding attorneys to some of the world’s biggest brands, the new domain naming convention for domain name endings, also known as generic top-level domains (gTLDs), will certainly change the game of naming.
ICANN Fuss
The stir is over what were 22 endings we have come to know and revel in, domain endings like .com, .net, .gov and .org – but it’s not so much the endings that were and are important – but who has them. As early as next year companies like Apple, Nike, Microsoft, virtually any brand you can think of, will soon be able to register gTLDs like .apple, .realty, .shoes, .justaboutanything – for a price, that is.
An article my partner Phil Butler wrote at RealtyBizNews spoke a bit about these game changing events. As Phil noted, the playing field for Dot Branding (as experts call it) will be even more un-level. Why? Well, ICANN suggests the cost of registering these domains will exceed $180,000, that’s how. Look at any smaller online brand, buying a domain for 200 grand is an impossibility.
Let’s look around the Web for some expert opinion on this Dot Brand news. Anthony Spotora, a Los Angeles trademark attorney alluded to the “potential for inclusiveness, and exlusivity” where the new gTLDs are concerned. In an article on Law Firm Newswire, Spotora had this to say:
“The new gTLDs allow businesses to make their domain names as inclusive or exclusive as they see fit. The top level domain can be a source of business and income as a company can create second level registrations and agreements with suppliers, distributors, and other partners who fit with the brand.”
Of course Spotora goes ahead and recommends companies get themselves a trademark attorney (a good idea to use Spotora or?). And so the navigation for good info about ICANN goes forth, a drop here, a dribble there, and businesses that should be on the leading edge, maybe get the general idea things are changing, eventually, sooner or later – and for some later is not a good thing. Steve Jones, COO and co-founder of Domainate, dispels some of the mist surrounding the new initiative on Business Insider. Myths like “Anyone can now have their own extension” are laid to rest, and I quote Steve on this one:
“It will cost $185,000 to apply for an extension and an additional $25,000 per year to keep it active among other costs. Costs for a company offering public registration of domains will shoot to well over a million dollars for infrastructure. Could your business afford that? “
Which Way to Answers
Also always wanting to be in the know, Ann Smarty, resident SEO expert and editor over at Search Engine Journal, talked with another expert on Dot Branding, Nicolas van Beek of Vayton Brand Capital. Van Beek seemed to have the inside track on solutions for brands needing help with the new gTLDs. In response to Smarty’s question about small and medium sized entities, and how the new domains affect them, he responded:
“Well, for one, thanks to this law, brand owners can better protect their IP assets in several ways. One of these is obviously the exclusivity created with costs. However, for some marginally prepared businesses there are strategies for entering the game.”
Vayton Brand Capital is in Luxembourg, not 50 kilometers from our offices here, interested in what Van Beek called “auto-financing” I gave the company a call. I was immediately put in touch with Van Beek. I asked him about how his company was stepping up efforts to assist clients with these new domains. Van Beek outlined the positives so:
1.The new Brand TLDs will be an opportunity for famous brand names to create a secured community as well as for combating against counterfeiting.
2. For the banking industry the new domains will become a unique way to secure their system from A to Z; with the DotBrand, the domain names could be managed internally.
3. Vayton can help a future dotbrand owner to file these application, setup the technology, and optimize the revenues generated by the new IP rights here in Luxembourg, not to mention taking advantage of applicable tax incentives.
As for Vayton, one of their more interesting marketable features, Van Beek’s “auto-financing” basically uses Luxembourg tax laws to help businesses pay for the high costs of the new gTLDs. The up front cost is one thing, but the year to year $25,000 to maintain the dotbrands has not been discussed. Luxembourg tax incentives via the new Luxembourg tax regime, gives up to an 80 percent tax break to companies with registered IP (Intellectual Property) in the country.
No Poor Man’s Game
Let’s take as an example apple growers of Anywhere USA. Could they afford this? Even if they could get to the counter before Steve Jobs’ Apple, taking charge of .apple could be cost prohibitive. But, what if they were based in Luxembourg? Dot Apple might be possible then? Sadly though, the new ICANN initiative seems certain to leave some Internet businesses standing with their pockets out.
Many are saying that ICANN is just looking to make a ton of money off the new gTLD market, others suggest these highly targeted domain names are a necessity, whether the ICANN glass is half full or half empty, remains to be seen. It is clear though, the little guy is not going to fare as well where branding online goes.
We will monitor this news and keep you updated. I leave you with a video segment from Bloomberg.
Featured image courtesy ICANN Flickr stream.
About Mihaela Lica Butler
Great post, thanks for covering dotbrands in such detail.
From a branding perspective this is obviously something the rich brands can implement to further differentiate themselves. It can also be a great way to link off-line and on-line advertising. Almost like a QR code, dotbrands give you the ability to link a specific domain to an offline advertisement.
Excellent point, Addison. I expect the rich brands will also dominate search for every single term related to their domains when this is live.