Why do some domains renew more expensive than others?

In the domain name market, there are significant differences in the renewal prices of different domain names. Some domain names may only cost a few dollars per year, while others cost hundreds or even thousands of dollars. So why do some domain names renew more than others? This article will explain several key factors that affect domain name renewal prices through data analysis.

1. Differences in top-level domain names (TLDs)

The renewal prices of different top-level domain names (TLDs) vary significantly. TLDs are domain name suffixes, such as ".com", ".org", ".net", and the popular ".ai", ".tech" in recent years. The Registry behind these TLDs has the right to determine the registration and renewal prices of domain names.

According to Verisign's 2024 report, the renewal price of the world's most popular domain name ".com" is about $10.26/year. In contrast, some newly launched TLDs such as ".ai" can renew for up to $70-100/year, which is much higher than the traditional ".com" and ".net" domain names. Some industry-specific TLDs, such as ".tech" or ".health", are also more expensive due to their specific uses and industry needs.

These differences mainly come from the supply and demand of TLDs, as well as the pricing strategies of registries for specific TLDs.

2. Market demand and scarcity of domain names

The supply and demand relationship in the domain name market also has a huge impact on renewal prices. Domain names related to popular industries or domain names with features such as short characters and easy spelling are usually more attractive. Therefore, the renewal prices of these domain names are often higher than general domain names.

Take the ".ai" domain name as an example. Due to the rapid development of the artificial intelligence (AI) industry, the market demand for domain names with the ".ai" suffix has soared. In the past few years, the number of registrations of ".ai" domain names has increased significantly, resulting in higher renewal prices. Some high-demand ".ai" domain names have even renewed for nearly $100 per year.

In contrast, the renewal fees for domain names in some unpopular industries or domain names with complex character combinations are relatively low.

3. Pricing strategy of domain name registry

Each TLD is managed by a different registry, and the pricing strategy of the registry directly affects the renewal fee of the domain name. In order to increase the attractiveness of their TLD, some registries may offer low price discounts in the first year of the domain name, but the renewal price will increase significantly from the second year.

For example, the domain name with the .xyz suffix usually costs only about $1 in the first year, but the renewal price is close to $13/year. This strategy of "first-year discount, subsequent price increase" is a common practice for many emerging TLDs. In addition, some registries will also make dynamic adjustments based on market demand. For example, Verisign has raised the renewal price of .com domain names every year since 2020, and it is expected that by 2025, the renewal price of .com domain names will reach $11.39/year.

4. Service fees of registrars

The services provided by different domain name registrars will also affect the renewal price. Although the registry determines the base price, the registrar can charge different additional fees based on market competition, service quality, after-sales support and other factors. These additional fees will cause the renewal price of the same TLD to be different at different registrars.

Taking GoDaddy and Namecheap as examples, the renewal price of .com domain names provided by GoDaddy is about $20/year, while the renewal price of Namecheap is $13/year. This difference mainly stems from the difference in additional services provided by the two companies, including privacy protection, DNS management, customer support, etc.

5. The impact of policy changes on renewal prices

Policy changes may also cause fluctuations in domain name renewal prices. For example, ICANN allows registries to increase the prices of specific TLDs year by year, resulting in a gradual increase in the prices of traditional TLDs including .com and .net. In 2024, ICANN approved Verisign's price increase plan, allowing Verisign to increase the price of .com domain names by 7% each year.

Over time, the upward trend in domain name renewal prices has become inevitable, especially in the case of policy changes or market fluctuations. For webmasters and businesses that need to use domain names for a long time, the increase in renewal fees will become a cost that must be faced.