Did you get an email from your domain registrar stating that your domain’s price is about to increase? You’re not alone, millions of people owning a .com domain will be facing a price hike… and there’s no sign of it stopping anytime soon.
Who is Increasing the Prices?
You might be tempted to think that it’s your domain registrar’s fault for inflating the price, but it’s far from true. In fact, thousands of domain registrars have been continuously increasing .com prices at this time of the year, every year.
In 2020, the cost to renew a domain at NameSilo was as low as $8.99 a year. Several years later, it costs an extra five dollars. The same applies for other registrars such as Namecheap, which increased by almost $3; or Domain.com, which skyrocketed by a staggering $8.
Most of these registrars sadly didn’t have a choice but to increase prices, majority of them are against it too. So what’s the real reason for .COM’s inflation? Verisign.
What is Verisign?
Verisign is the large company behind .COM domains, along with several others including .NET and .NAME. They are the reason why domain registrars have to continually raise the price.
Why are They Inflating Prices?
For several years, ICANN (the Internet Corporation for Assigned Names and Numbers) mandated that Verisign keeps .COM’s wholesale fee at $7.85. This means that if you buy a domain name for $8.99, $7.85 goes to Verisign, a small portion goes to ICANN, and the remaining dollar goes to the registrar.
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However, in 2020, Verisign changed their contract with ICANN. The new deal allows Verisign to increase the base price by 7% each year (with a few exceptions.) This means that the Domain Registrars must adjust prices accordingly if they want to continue profiting.
Besides Domain.com, the majority of the domain registrars have only been slightly raising their prices to keep up with Verisign’s new price. The registrars continue to make the same amount of money while also having to charge more for the same product.
ICANN Receives $20 Million
Over five years, ICANN received twenty million dollars from Verisign. The official reason for this is not known, and ICANN has not announced where the money will be spent or invested
Two-Year Price Freeze
The good(ish) news is that for every four years of price hikes, there will be two years when the price will freeze. Because the price increased in 2020 and each year throughout 2023, the price will remain the same in 2024 and 2025. But after the two-year grace period, prices will continue increasing for another four years.
The Future of .COM
By the end of the decade, the wholesale price of .COM will be around $13.35. But you would be paying far more than that, since domain registrars charge extra to make a profit.
Both NameSilo and Namecheap had steady gradual price hikes. If they continue gradually increasing the cost at this rate, then they will both cost likely $20 per year. On the other hand, Domain.com had a massive sudden hike in price. If they keep doing huge increases, their domains would cost nearly $37 a year—however, this is unlikely. They might have had a big increase now so they could keep the price as-is for the future.
What you can do
If you renew your domain before the increase this September, you won’t have to pay the increased fee. If you renew several years in advance, you can lock in the current price—although you’d have to pay years of fees all at once.
Or, you can bundle in a domain with a hosting plan. This way, you receive the domain for free and don’t even have to worry about the price increasing!
While Verisign’s price hikes are annoying, there is no sign of it stopping anytime soon, and registrars won’t be able to do anything about it.