Conference presentation White paper regarding Universal Acceptance 12 March 2017 Michael Kende, Andrew Kloeden 2008414-415 | Commercial in confidence
2 Agenda Agenda ▪ This presentation sets out the work Analysys Mason has performed on behalf of UASG in producing a white paper related to Universal Acceptance. ▪ We have circulated a draft version of the paper ▪ The agenda is as follows: – Introduction and purpose of our paper – Overview of content and messaging 2008414-415 | Commercial in confidence
3 Introduction and purpose of the paper Introduction and purpose of the paper ▪ We have produced a white paper for UASG regarding Universal Acceptance (UA) of new generic top level domains (gTLDs), including Internationalised Domain Names (IDNs) ▪ The purpose of this paper is to raise awareness of the benefits of UA, showing the value of the new names, in order to encourage UA – The paper is pitched at a senior-level commercial, policy, and cultural audience – It is short, clear, and non-technical, with an executive summary and infographics ▪ Our paper is based on the following methodology – 10 interviews with key players, including registries, users of the new domains, and application owners – The production of 5 case studies – Secondary research of third party sources 2008414-415 | Commercial in confidence
4 Overview of content and messaging of the paper Overview: our paper has a clear and simple storyline that highlights both the importance of UA, and the relative ease of implementation ▪ The focus of this paper is the benefits of UA for software and application owners, to be able to accept users regardless of their domain: – UA has progressed, but is not complete. Without UA, people will not be able to use their preferred ‘identity’ that the new gTLDs and IDNs have enabled – UA has benefits for software and application owners, domain registrants, and Internet users more broadly, driven in part by the take up and popularity of the new domains. (There is demand for gTLDs, and registrations have grown strongly, although IDNs have been less successful) ▪ The key benefit of UA to software and application owners is to seamlessly receive demand from the many users of the new domains in order to maximise their revenue and satisfy their customers – The effort required to implement UA in most cases is not onerous but depends on the initial software design, organisational factors, and the upgrade schedule of the software. This is the case for both gTLDs and IDNs ▪ However, certain systems (e.g. aviation booking systems using Teletype) may have difficulties that require further upgrades – It makes sense for application and software owners (e.g. enterprises, cultural institutions, government institutions) to implement UA to gain the benefits from the strong demand for the new domains 2008414-415 | Commercial in confidence
5 Overview of content and messaging of the paper Demand for gTLDs has grown, and this underpins the benefits of Universal Acceptance; IDNs have grown but remain at a lower level Cumulative registrations of gTLDs Cumulative registrations of IDNs (top level) 30 1,000 Millions Thousands There are an additional ~1.8m 900 country-code IDNs 25 also registered in Russian and Chinese 800 700 20 600 15 500 400 10 300 5 200 100 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 - Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Total registrations Used domains 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2008414-415 | Commercial in confidence Source: nTLDstats.org
6 Overview of content and messaging of the paper The benefits of UA accrue from the benefits of the new TLDs, flowing to end users, domain owners, and application owners Benefits Entity ▪ Internet users gain from UA fundamentally because it means the Internet “works” without extra tweaking Internet users ▪ Users with new email addresses will have their emails delivered, and will have access to all the services they normally use ▪ The benefits of UA for domain owners flow from the benefits of the new domains Domain and website owners ▪ The new domains allow a stronger or new identity, helping with marketing or awareness. UA means the domains work, which means that domain owners don’t look bad in the eyes of their customers ▪ If an application does not accept new domains, it looks bad to its customers. This causes a problem in proportion Application and software owners to the number of customers using the new domains ▪ E.g. an email system without UA will scramble the presentation of emails from the new domains These benefits can create a virtuous circle. Internet users benefit from the acceptance of the new domains, which drives traffic to domain and website owners, which further spurs application and software owners to implement UA 2008414-415 | Commercial in confidence
7 Overview of content and messaging of the paper Bayern Domain Gmbh has positive experiences with the use and acceptance of the .bayern domain, which has provided cultural benefits Bayern Domain gmbh owns and registers the .bayern domain, which is used in Bavaria for regional content (e.g. the Bayern München football team’s website in Case study subject the local dialect) The benefits of UA to Bayern Domain, and to Bavarians flow from the benefits of the new domain. These include a stronger regional identity that is of benefit to Benefits of UA entities with a strong Bavarian link. UA allows these domains to work seamlessly across the Internet In Bayern Domain Gmbh’s view, UA, as it relates to the .bayern domain has now Experience with UA progressed well. Most applications now accept the domains of its clients. Bayern Domain Gmbh helps its clients deal with UA issues as they arise. In their Cost and effort to upgrade experience, it is not a great effort to implement UA, since there is a continuously updated list of new domains, and the coding effort is similar to a normal bug fix Other interviewees have also suggested implementation of UA is not typically difficult 2008414-415 | Commercial in confidence Source: interview
8 Overview of content and messaging of the paper We have conservatively estimated the total benefit of UA to be USD 9.8 billion Estimated per annum benefit of UA for IDNs by language group and by gTLDs, USD 7 6.2 Vietnamese 0.1 0.3 6 Russian 0.5 Arabic 5 2.2 Chinese USD billion 4 3.6 3 2 3.2 Indian languages 1 0 gTLDs IDns 2008414-415 | Commercial in confidence Source: statista, Ethnologue, Internet World Stats, Verisign, Radicati
9 Overview of content and messaging of the paper Our estimation methodology is conservative and relies on a number of key assumptions Calculation methodology for the impact of UA for IDNs Calculation methodology for the impact of UA for gTLDs Number of non-Internet users: Total active gTLDs: ▪ ▪ Russian: 68m 11.7m ▪ Chinese: 550m ▪ Arabic: 132m ▪ Vietnamese: 19m Total active gTLD based email addresses: ▪ ▪ Indian: 805m 154m, assuming 13 email addresses per domain 22% (based on primary research) Number of non-Internet users for whom Total gTLD email addresses where users lack of local language content is a barrier: do not have a second non-gTLD address ▪ Russian: 15m ▪ 77m, assuming 50% of email addresses ▪ Chinese: 121m are used by people with no non-gTLD ▪ Arabic: 29m address ▪ Vietnamese: 4m ▪ Indian: 177m 5% (conservative assumption) E-commerce spend per email address ▪ Global average of USD360 per annum New internet users based on UA ▪ Russian: 0.7m ▪ Chinese: 6m Proportion of web sites missing out on this ▪ Arabic: 1.4m revenue due to lack of UA ▪ ▪ Vietnamese: 0.2m 13% based on .club testing ▪ Indian: 8.9m USD 360 average spend per new user Total e-commerce revenue that could be generated if all e-commerce sites implemented UA Total benefit of USD6.2 billion ▪ USD3.6billion Note: we count speakers of all Indian languages (and also Chinese dialects) as a single group 2008414-415 | Commercial in confidence Source: Analysys Mason, statista, Ethnologue, Internet World Stats, Verisign, Radicati
10 Overview of content and messaging of the paper Studies show that progress has been made toward UA, but this is incomplete Acceptance of the .club domain by various website categories Results of ICANN testing on the acceptance of domains of different formats 100% 100% 5% 11% 90% 90% 21% 22% Could not test 23% 17% 9% 32% 36% 80% 80% 11% Failed ICANN found better 13% 70% 70% acceptance of gTLDs 22% than IDNs in its testing 8% 60% 60% 12% 50% 50% 40% 80% 40% 78% 67% Passed 65% 60% 30% 30% 55% 52% 20% 20% 10% 10% 0% 0% Total E-mail Retailers Travel Social Newsletters Music Short gTLD Long gTLD IDN.com Unicode Right-to-left Unicode mailbox, IDN IDN networks gTLD domain 2008414-415 | Commercial in confidence Source: ICANN, .Club Domains LLC
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