Price Increase for .RU/. Irina Danelia for ccNSO meeting at ICANN - PowerPoint PPT Presentation

Price Increase for .RU/. РФ Irina Danelia for ccNSO meeting at ICANN 61 San Juan, 14 March 2018

History Fee for 2 nd level domain name registration/renewal for registrars was stable since 2007 180,0 160,7 160,0 ~ 2,02 USD* According Rosstat official 140,0 148,4 inflation rate from August 120,0 120,0 2007 till June ~1,18 USD* 2017 was 100,0 128,21 % 80,0  from 01.06.2003 till 31.08.2004 - 5 USD 78,1  from 01.09.2004 till 30.06.2005 – 5,64 USD 60,0 70,0  from 01.07.2005 till 31.07.2007 – 2,72 USD  from 01.08.2007 till 30.06.2017 – 70 rubles 40,0 20,0 * at the exchange rate RUB/USD on July, 1 2017 0,0 01.06.2003 - 01.09.2004 - 01.07.2005 - 01.08.2007 - 01.07.2017 - now 31.08.2004 30.06.2005 31.07.2007 30.06.2017

Market Landscape Russian TLDs (excl VAT, rubles) .SU 211,86 .MOSCOW/.МОСКВА 220,3 .РУС 375,00 gTLDs (USD) .COM 9.05 .ORG 9.68 .ОРГ 8,25 .ОНЛАЙН 20 .САЙТ 20

Market Landscape Average price for 2nd level domain name registartion/renewal for registrant in 2015-2017 years, rubles 1 000 858 900 849 829 800 739 671 700 600 427 500 443 416 400 329 369 436 462 322 399 300 200 100 - 01.01.2015 01.07.2015 01.01.2016 01.07.2016 01.01.2017 01.07.2017 01.01.2018 registration renewal Source: registrars’ web -sites (publicly available data)

November 2014 exercise  Proposal: increase from 70 rubles to 87,5 rubles (excl VAT)  Ground: • negative growth in Mar-Oct 2014 • negative fcst for 2015  Proposal hasn’t been approved by Council of Coordination Center for TLD .RU/. РФ  Outcomes • Cut in expenses, mostly – advertising and funding of industry events

Price elasticity study Period: November-December 2016 140 scenario-based interview (12 registrars, 28 resellers, 100 registrants)  It became evident during the interviews that respondents understand that price increase might happen sooner or later and that Coordination Center has the reason for such an increase, i.e. growing operation costs  Scenario of price increase up to 100-120 rubles is considered as most probable. Bigger registrars are ready for such an increase. Most negatively reacted the registrars dealing with domainers and dropcatchers.  Price 150 rubles was considered “sharp” or “many - fold”  Price increase up to 150 rubles or higher almost all respondents perceive negatively  Most respondents predict 10-15% drop in renewals in case of price increase up to 100-120 rubles, mostly due to the domainers segment. Price 120-150 rubles may cause the increase of end-user price and drop in renewals in the private user segment.

Decision 70 120 Fee for registration/renewal/transfer from 01 July 2017 The increase of the registration/renewal fee gives the Coordination Center the opportunity to fund the broad-scale projects focused, as defined in the statue, on development of domain names registration system, facilitating the security of the Internet usage, broadening the use of global network to the benefit of users, business and state.

Model for Forecast Domain names in .RU by registrant category 2% 3% 1 - 10 5% 6% 3% 11 - 100 101 - 500 8% 56% 501 - 1000 17% 1001 - 5000 5001 - 10000 10001 - 50000 Quantity of domains by category 1 000 000 3 100 000 3 061 960 940 015 922 383 937 406 928 863 914 877 916 543 921 720 941 347 900 000 3 000 000 2 990 782 800 000 2 935 758 2 900 000 2 860 029 700 000 2 774 149 2 800 000 600 000 500 000 2 700 000 431 245 2 701 411 411 361 431 548 2 652 415 383 210 366 740 350 968 338 988 400 000 395 767 2 600 000 358 440 319 069 2 566 392 305 607 335 299 319 673 285 378 300 000 287 375 252 761 266 105 290 367 226 819 227 372 2 500 000 227 480 227 930 220 352 228 968 200 000 174 604 176 895 165 905 127 533 153 192 177 057 198 544 134 036 152 044 147 955 146 694 175 524 131 282 2 400 000 151 797 142 394 100 000 116 871 135 589 115 904 92 993 109 491 102 047 111 836 137 666 82 792 0 2 300 000 dec. 13 jun. 14 dec. 14 jun. 15 dec. 15 jun. 16 dec. 16 jun. 17 1 - 10 11 - 100 101 - 500 501 - 1000 1001 - 5000 5001 - 10000 10001 - 50000 > 50000

Model for Forecast  Forecast assuming no price change: new registrations & renewals by segment. Total growth in 2017 +2,7%  Adjustment by segment (vs ‘no change’ forecast) : • New registrations -10% • Renewals -5%...- 25%  Total growth 2017 fcst: -1,7% • 2017 EOP fcst: .RU 5,344,000 domains, . РФ 868,000 domains  Stress test: drop 20%

Market Reaction  Feb 2017 – silence  End of March 2017 – letter from registrars to Council and Board of Founders of Coordination Center for TLD .RU/. РФ • Voting results: • 120 rub is OK - 5 registrars (market share 45%) • Price increase should be less - 6 registrars (market share 43%) • No price increase - 28 registrars (market share 18%) • Forecast: drop 11% in 2018 & 25% in 2019 Some domainers predicted that .ru will drop below 5 bln this winter  May 2017 – open public consultations  End of June 2017: 9 registrars sent complain to Federal Antimonopoly Service. Still under investigation  July,1 – price increase came into force

Market Reaction  Side effect: growth in new registrations & renewals in June 2017  Minimal increase of registrars’ price for end -user customers  Main category of registrants (1- 10 domains per registrant) continues to grow  2017 actuals better then forecast  Side effect: strong discussion regarding transfer (change of registrar)

Stats (as of Feb, 1 2018) Jun’ 17 Sep’ 17 Dec’ 17 Jan’ 18 Total domains (.RU + . РФ) 6 410 808 6 353 434 6 239 355 6 183 973 New registrations in .RU + .РФ (actual vs fcst) 21,72% -12,46% -1,04% -2,32% Renewals in .RU + .РФ (actual vs fcst) 43,22% 3,01% 5,51% 3,67% New registration in .RU + .РФ Renewals in .RU + .РФ 190 000 450 000 180 000 400 000 170 000 350 000 160 000 150 000 300 000 140 000 250 000 130 000 120 000 200 000 Jun' 17 Jul' 17 Aug' 17 Sep' 17 Oct' 17 Nov' 17 Dec' 17 Jan' 18 Jun' 17 Jul' 17 Aug' 17 Sep' 17 Oct' 17 Nov' 17 Dec' 17 Jan' 18 FCST ACTUAL FCST ACTUAL

Thank you for your attention! Any questions? i.danelia@cctld.ru