2020: a boom year for domain name trading
But plentiful supply keeps prices down on the secondary market
Last week, Sedo and hosting service provider InterNetX presented their Global Domain Report, describing developments on the international domain name market. The report covers both new domain name registrations and the trade in existing domain names. For domain name trading in particular, 2020 was a boom year. During the lockdown, Sedo's trading volume almost doubled. Strikingly, however, that didn't result in higher prices. It would seem that the supply of domain names up for auction still comfortably exceeds demand.
The domain name market
The market for domain names is traditionally divided into two segments:
New registrations (the primary market)
Trading of existing domain names (the secondary market)
Various good sources of information about the global primary market are available. In addition to the annual Global Domain Report, there is the Domain Name Industry Brief published by .com provider Verisign, for example. The statistics published by the industry association CENTR are very useful as well. The secondary market is less transparent, because many sales are private and few market players are large enough to generate global statistics. Auction platform Sedo, which claims to lead the market with a share of 50 per cent, has been publishing figures for some years, but is certainly not the market's only player.
Plentiful supply keeps prices down on the secondary market
Most domain name trading doesn't involve names going under the hammer at set times, but being made available indefinitely on the Sedo platform. A trader will typically register a number of domain names, then put them up for sale. People looking for names can search for a particular term or for names linked to a particular theme, and make offers for any that catch their eye. The cost of retaining a domain name is usually small in relation to the potential selling price, so the supply of available names is huge. Sedo reports that it had more than twenty million domain names available in 2020.
The enormous supply provides an obvious explanation for the most striking finding in the report. Although the volume of sales in 2020 was sometimes almost double the year before, prices barely increased. In fact, the typical price paid for a .com name traded through Sedo fell to $300. Sedo's turnover nevertheless grew by 26 per cent relative to 2019.
Figure 1: median prices of .com, .org and .de domain names (source: Global Domain Report 2021).
Volume of .nl domain name sales increased
Information about .nl and the Dutch market is also provided in the report. The Netherlands performed better than average in 2020: the number of domain names grew by 3.5 per cent, while turnover from the trading of existing domain names was up by 26 per cent. The latter figure is particularly impressive, given that most of the trading involved relatively low-value names: the average price of a .nl fell 15 per cent, from €1,518 to €1,314. That figure makes .nl a middle-ranking domain for prices. At $2,500, the highest average selling price for a country-code domain was claimed by .ai, the TLD for Anguilla. The Caribbean island's extension owes its value to understandable popularity in the world of artificial intelligence (AI). The domain's standout transaction involved expert.ai, which changed hands for $107,000.
No mega-sales, but new TLDs rise in price
2020 wasn't a year for record prices. That was never likely, however, after voice.com set a new world record in 2019, when it was bought for a staggering $36,000,000. Nevertheless, the value growth achieved by some new top-level domains (nTLDs) was notable. The term 'nTLD' is applied to extensions created since ICANN's most recent application window in 2012. One of the leading nTLDs is .app, used in the Netherlands by delivery supermarket Picnic and others. The popularity of .app was underscored by website builder Shopify paying $200,000 for shop.app. Another nTLD to do well was .club, buoyed by growth of the Clubhouse app – see the article we published last month for details.
Highest disclosed prices for .nl domain names
Similarly, 2020 wasn't a year for record .nl prices, certainly where disclosed sales are concerned. The one name that stands out is gereedschap.nl, which sold for €35,750. It's also worth mentioning a name that isn't a .nl but has clear a link to the Netherlands: holland.de was bought by a German provider of Dutch holiday accommodation for €34,000.
Domain name | Price in euros | |
|---|---|---|
1 | gereedschap.nl | 35,750 |
2 | zakelijklenen.nl | 6,200 |
3 | domus.nl | 5,100 |
4 | megacasino.nl | 5,000 |
5 | ciso.nl | 3,799 |
6 | vakmanschap.nl | 3,700 |
7 | spil.nl | 3,569 |
8 | casemanagement.nl | 3,200 |
9 | nlplatform.nl | 3,025 |
10 | pwh.nl | 3,000 |
Table 1: the ten highest disclosed prices for .nl domain names traded on Sedo in 2020 (source: Global Domain Report 2021).
Shorter is no longer always better
Another interesting trend is the increasing value of longer domain names. Although the biggest price tickets were all attached to names with fewer than seven characters, there was an eye-catching upturn in sales of domain names with about fifteen characters. Underpinning that shift are changes in user behaviour: people now read domain names more, but type them less. Consequently, longer names are more valuable than they used to be. Download the full report.
