As I mentioned last week we sponsored this year’s IIA Internet Congress. The event was held on Monday in the regal surroundings of Clontarf Castle in Dublin.
I hate travelling to events the same day as the event itself, so I went up the night before and had a very pleasant evening with some of the other delegates and speakers.
The actual congress itself started officially at 9.30 am on Monday morning, but people were arriving in the hotel from around 7 am onwards to setup stands and have breakfast.
The turnout was impressive, with over 150 people travelling to the event from the four corners of Ireland. The Cork contingent included Tom Raftery, who I hadn’t met in more than a year, while our guests for the day included Alan from Spoiltchild
Other companies that were present included OSD, DEG, Realex and many more.
The talks I was more interested in were those related to domains, email marketing and the IIA domain guide.
One of the email marketing sessions was held by Denise Cox from Newsweaver, who gave a very informative talk on newsletters citing examples from their client portfolio.
Her talk was followed by that of David Curtin entitled “Domain Developments Worldwide”. Curtin covered a number of interesting developments in the domain market, while also discussing the IE space within the international context. He also mentioned a number of the IEDR’s plans for future development.
One of the areas that Curtin talked about in relation to IE vs .com was the usage statistics. As Curtin admitted, accurate stats are hard to come by, however trends can be identitified with some degree of accuracy.
Unfortunately some elements are still trying to put a spin on the IE domain pricing which is nothing short of hypocritical. One of their staff was overheard to be telling delegates about their “crusade” on pricing. Considering that they still charge more than most IE domain resellers who gives them the right ?
Until such time as the IEDR introduce an RRP (recommended retail price) or something similar the pricing debacle will continue. However, as was to be expected, Curtin announced that there would be another pricing cut on the wholesale (reseller) pricing of IE domains in January 2006.
What does this mean?
In essence the IEDR will charge companies, such as ourselves and Novara, Hosting365 etc., lower rates on registrations and renewals. It is a basic element of free market economics that each company reserves the right to either pass on that saving to their clientele or use it to amass a higher profit on sales via a better margin.
If you want to champion pricing then you should pass on the savings to your clients. We did earlier this year. Costello seems to be very good at “talking the talk”, but I didn’t see any drop in their retail pricing.
The afternoon saw the launch of the IIA’s guide to domains which was prepared by the IIA working group on domains and hosting. I was involved in the production of this guide though I have since left the working group.
In light of the increasing number of domain scams the publication of such a guide is timely.
After the afternoon sessions delegates adjourned to the bar for a complimentary drink before going their separate ways.
The way this is worded, Michele, it could be easily mis-construed as one of the IEDR’s staff was overheard…
Tom
I’ll edit the wording 🙂
Michele
Ironically, I offered my stats to the IEDR and they are the most accurate stats in the world on the Irish hosting business. However they continually show a preference for cnoib domains over .ie amongst Irish registrants. The reasons for this are mainly economic – with the choice between an expensive .ie and a cheaper .com, the cheaper option almosts always wins. It is simple economics. The IEDR has been working hard to make .ie more attractive to businesses by marketing the uniqueness and and credibility of .ie as a brand.
The utilisation aspect of domains is interesting. Since the traditional utilisation of cnoib is in the region of 70%, around 30% of the cnoib domains registered are never set up for internet use. The utilisation for .ie is around the 95% mark.
An announcement of an announcement of a reduction is hardly news. The price of the .ie needs to fall if it is to be a viable option. Perhaps culling the board of IEDR and replacing it with people with actual industry experience and knowledge would be a start. Curtin has turned around the IEDR but I think that there is a reluctance to change in the board of IEDR which is limiting what he and the current management of IEDR can achieve.
John
I think the real issue about pricing is one of perception. A lot of people seem to think that the IEDR set the retail pricing, whereas they only set the wholesale rate.
As was mentioned previously companies that sell high volumes of IE domains pay lower prices. It is they who need to decrease their pricing in line with the IEDR’s pricing reductions. Based on what has happened to date how can consumers have any confidence that a reduction on the IEDR side will result in any pricing change on the retail side?
Michele,
The perception is that IEDR, a not for profit organisation, made a very significant profit from being the .ie cctld Registry. Beyond the improvements in operational efficiency, there is a serious question about the high pricing of .ie to be answered: why is the .ie priced so much so that the IEDR can make a very significant profit?
John
Didn’t they post losses in previous years? I could be completely wrong, but if my memory serves me well the profits they are now showing would only offset the previous losses…
Michele,
It looks like they’ve taken care of the losses of previous years.
“The Company now has a strong Balance Sheet and the accumulated deficit as at 31st December 2004 of €61,264 has already been extinguished in 2005.”
John
See? I was wrong 🙂
Michele
The main reason for the high cost of .ie domains is the lack of a workable API for the registration/management of the domains.
The cost reflects the Significant amount of man hours that goes into the current managment of the domains.To reduce the cost we need to Rectify this major problem and have the ability to register .ie domains quickly and Efficiently.
Sposs
I agree entirely with your point about the extra manpower required and I hope that the introduction of some form of API will be forthcoming.
As you may remember we used to sell IE domains close to cost price, however we had to increase the price to cover the cost of managing our portfolio.
Michele
We currently have two full time members of staff running .ie domains alone (whereas 1/3 of a person manages 5 times the number of cnoib domains). Once the API is a reality, prices will drop.
What Steve pointed out as regards manual processing is the a major flaw with .ie domains. Reducing the price may increase demand for .ie but the cost of processing a higher number of registrations. This is why I thought that a price reduction would lead to a .ie count of about 75K within 18 months rather than a .ie count of 100K as evisaged in the Silicon Republic article.
A significant reduction in the wholesale cost of .ie domains in conjunction with a proper API and an acknowledgement of the hosters role in verification would make .ie a lot more viable for hosters. The balance of ie:cnoib for most hosters is weighted against .ie and most smaller hosters do not even bother promoting .ie domains due to the hassle.
While IEDR might claim that it is a managed registry, it seems that it is the hosters that do the managing and are the ones proofing the registrants’ entitlement to the domains. Perhaps IEDR should consider that and revert merely to a supervisory role settling problematic registrations. Reducing the wholesale price by 30% to 50% with a clearer definition of what a hoster has to ensure in order to register a domain for a client might be the way to do it.
Not exactly the most lucid of my posts due to flu. The point I was making was that reducing the price of .ie might increase demand for .ie domains but the costs of processing those added registrations might prevent the reductions from being passed on to the customers. So unless there is a significant reduction with more automation, there will be little change in the status quo. A reduction under 20% will probably be irrelevant, especially if it is not accompanied by a usable API.
Steve – I know what you mean. We don’t usually worry about CNOIB domains unless there is an issue with a transfer in. They almost look after themselves and we can thus offer lower prices.
With regard to the IE domains we have to charge enough to cover our costs as do most companies.
However there is a very big difference between covering costs and profiteering.
If automation is the key to reducing pricing doesn’t Eoin’s statements sound even more hypocritical especially as they have their own “automated” interface with the IEDR????
Or maybe I missed something….
Michele
Michele,
To continue the point about there being a difference between covering costs and profiteering, the IEDR has an image problem. It has a high enough turnover to cover costs and yet it makes nearly 40% of that in operating profit according to its financial reports. Surely Eoin has a fair point about .ie being over priced when you take this into consideration?
The automation argument requires automation at two points – at the hoster and at the registry. A functional API provided by IEDR is the key to this. I just hope that it is well designed and not designed by the people who developed IEDR’s previous billing system.
Hehe, my thoughts exactly actually. Surely the IE Express Choo Choo would allow Eoin to sell .ie at 39.95!
Steve – aye. If it’s all automated there’s no excuse 🙂
John – Whether the IEDR are making a profit or a loss is irrelevant when you consider that Eoin is paying under €30 per IE domain yet selling them for close to €80
Michele – there are effects that are the direct result of the high price of .ie domains and they would not be permitted in any proper market.
The distribution of .ie cctld is completely anti-competitive. Two ISPs, Eircom and Esat, have the biggest concentrations of hosted .ie domains. The .ie domains are concentrated on a handful of hosters. The spread of cnoib dommains reflects a healthier market. There is a concentration on top end hosters but there is a middle ground where smaller (Tier 3 and Tier 4) have significant numbers of domains. Many of these Tier 3 and Tier 4) hosters have miniscule numbers of .ie domains. These guys don’t even bother promoting what is supposed to be the national domain.
So what you’ve got are decrepid super hosters like Eircom and Esat getting massive discounts while smaller hosters get screwed. Surely you don’t agree with this anti-competitive market situation that the high price of .ie causes?