Dutch domain name market contracts as 12-month non-renewals rise

Likely causes include sluggish economy and decline from pandemic-era registration peak

Decreasing growth visualized by blocks with arrows

Over the last year, the number of .nl domain names has fallen by 1.7 per cent. The contraction is in line with the wider Dutch and European market trends. Putting our own data together with information published by the trade association CENTR.org, it's clear that the pandemic-era market high is behind us. We consider the causes of the downturn and the implications for the period ahead.

Dutch market

In the Netherlands, the .nl domain has contracted by 1.7 per cent – a little more than the 1.3 per cent recorded for the market as a whole. Nevertheless, the brand preference for .nl remains unchanged. The main reason for the discrepancy is that many Dutch businesses have been expanding into neighbouring markets. As a result, Dutch registrations of French (.fr), German (.de) and UK (.uk) domain names were significantly up, with a combined annual net growth of 84,000 domain names. The number of .uk registrations in the Netherlands was particularly striking, given that the UK's domestic domain name market contracted by 12 per cent in the same period. The main driver of such registrations seems to be the export activities of Dutch businesses, which are forecast to grow significantly in 2024. Here in the Netherlands, the other top-level domains to contract included .eu and a number of new generic TLDs, such as .online and .top.

Contraction of .nl due to non-renewals after first year

The main reason for the fall in the overall number of .nl domain names was that fewer registrations were renewed at the end of the first year. Non-renewal can have various causes. Often, a registrant will register a name in connection with plans that ultimately don't go ahead. Another factor is that initial registrations are frequently discounted by registrars. When the time comes to renew at the full price, it seems that a growing number of registrants have second thoughts, especially since the price rises introduced in 2022 and 2023 when the cost of energy shot up. The wide disparity between the discounted introductory prices of .nl domain names and the renewal prices is likely to be significant in this context: the average first-year price is now just 10 per cent of the average renewal price. Discounting is a marketing strategy that registrars independently choose to adopt.

What's driving contraction in the Netherlands?

Naturally, the figures prompt the question, why is the domain name market contracting? While the precise cause is hard to pinpoint, a number of significant factors have been at play in the last year:

  • In the early part of 2024, the Dutch economy shrank more than forecast (-0.5 per cent), impacting the demand for business domain names.

  • Google made a number of updates to its algorithm, which adversely affected bloggers and affiliates. That resulted in a sharp drop in demand from those quarters for websites and domain names to go with them.

  • Artificial intelligence has started to displace conventional browser-based searching. Although this trend has yet to gather real momentum, it certainly seems that the popularity of large language models (LLMs) such as ChatGPT is on the rise. Domain names play a much less prominent role in AI-based searching than in traditional searching.

The latter 2 factors could explain why markets are shrinking not only in the Netherlands, but all across Europe. The Google updates were rolled out simultaneously in all EU countries, and the rise of AI is a general phenomenon.

Implications for the domain name industry

For hosting and domain name registration service providers, the Dutch market is not as attractive as it used to be. Much will depend on service providers' ability to adapt to the new climate by, for example, focusing more on activation, customer retention and upselling. Such strategies can reduce the percentage of registrants that don't renew after the first year, which is likely to be the key to growth. We're committed to helping registrars maintain the health of the market for .nl domain names. As well as to the development of activities that contribute to the quality and security of registrars' services. For example, we invest in the security of the zone, providing a sound infrastructure, communicating with start-up businesses, and, crucially, partnering with domain name registration service providers.

At the time of writing, not all TLD registries had published data for the first half year. This article therefore doesn't take account of developments involving various TLDs, including .com.