Why are domain renewals getting so expensive?
A few of my domains are up for renewal in the next few months. I checked the prices and I'm pretty shocked to see $xx renewal prices. When I bought these domains for multiple years initially, with no discount, they were $7.99. I recall a few years before that that I was renewing domains I owned for only $4-5.
What gives? It amazes me that $1.99 will get you 100GB of cloud storage for a year, that you can run your website including its API in the cloud for an insignificant cost, and that you can stream unlimited movies for less than $10/month yet somehow maintaining a couple of DNS records (and some associated paperwork?) costs $xx/yr. Is it the registrars expecting unjustifiable levels of profit? I also see no real competition, maybe ICANN is collecting fees (and if so, where is the justification)?
Is there an actual reason why these fees are much above cost to maintain the records let alone increasing at a pace that puts just about any investment source to shame? More importantly, is there anything we can do about this? It seems completely absurd to me.
Registrars are hit up on multiple fronts:
-ICANN charges contract fees, $100k+ to registrars to become accredited.
-TLD operators (like Verisign for .com and others for every other cool TLD your users might want to register) charge a base fee to the registrar per domain that is registered.
For example, Verisign (holder of the .com TLD) charges roughly $6 per domain to the registrar.
Registrars then have to pass on those costs to you AND add a little more for their own operating expenses and profit.
Many registrars use domains as a loss leader. They LOSE money on domains in order to upsell you on other services (hosting, SEO, ecommerce, etc.).
Because registrars have huge lock-in effects.
It is extremely tedious to transfer domains between registrars. There are periods around the renewal date where you cannot do this at all, and it might involve paperwork and phonecalls. The old registrar can stall and make it more difficult on purpose.
And if you are renewing a domain, it has some value for you. Registering a new domain might be an impulse purchase, but if you want to keep it after a year, you most likely have a site worth more than $xx/year running there. This domain might go offline for months or even be lost if the transfer is messed up.
Altogether, the old registrar can make it difficult to transfer domains out, and could cause you to lose the domain. Paying $xx/year is the easy way out, and they know it.
I remember paying Network Solutions $99/year back in 1997.
$8 a domain? It's cheap...
Yes, there are reasons, but it doesn't matter because whatever there reasons are - you'd disagree with it anyways, correct?