March 8th, 2017 · by Domains Direct · 2 min read

One of the reasons I decided it was the right time to sell Web Drive in 2014 was that I felt the hosting and Domain industry was about to plateau and any substantial further growth could only come from buying up our competitors. By 2014 we'd already acquired 16 of them and there was simply no one left to acquire (at least, that were willing to sell.)

From the late nineties to around 2013 the web industry was booming. Businesses were still setting themselves up online and there was plentiful business for all web designers and hosts. Nowadays, virtually everyone that was going to get a website now has one (even though only 60% of NZ businesses have no web presence), so acquiring new customers meant working hard to convince the market why they should change providers.

As I look at what's happened in the 3 years since selling it's clear to see that the plateau has materialised.

In 2008 total .nz registrations grew by 90 per day (registrations less cancellations) By 2015 it was just 22 per day.*

^{*This figure is adjusted to remove top-level .nz Domains, of which we work on the assumption that only 20% have not had a .co.nz (or other) equivalent registered.}

The graph below shows the total active Domains per year, including the top-level .nz Domains released in 2014.

If we remove the top-level .nz Domains we can clearly see the plateau as new registrations balance out with cancellations.

The next question is: how much longer will top-level .nz registrations sustain growth? Surely by now, everyone who wanted to register the top-level (e.g. domain.nz) equivalent of their Domain has already done so? The graph below shows the net growth of the top-level .nz suffix.

As you can see there was a big boom in 2014 to 2015 (which coincides with the 3 Sep, 2014 go-live date) as nameholders registered the top-level versions of their names; but then in 2016 these registrations dropped to a trickle. The initial rush produced over 100,000 new registrations, but in 2016 there were just 10,150 registrations.

It was thanks to these ten thousand new registrations that .nz had any growth at all. The dominant .co.nz Domain, which enjoys 73% of total market share actually shrank by 182 Domains in 2016.

As companies like Domains Direct will struggle to grow from any significant increase in new registrations, it's now more important than ever for registrars to be looking after customers to retain their loyalty; especially given the vast pricing differences for what has essentially become a commodity.