Why .io domains are so expensive & popular
In the past few years, the TLD dot io has seen a significant increase in popularity. And on pages like Namecheap or GoDaddy buying an unregistered dot io domain is more expensive than a dot com domain. But why is that the case & what makes dot io so popular?
1) Registry "Internet Computer Bureau" setting high fees
A registry that has the right to sell domains of a particular TLD determines the standard fee for its transactions. The "Internet Computer Bureau" holds the rights to sell dot io domains and it is likely that they charge high fees. We can't know the exact fees they take. But every domain marketplace like Namecheap, Godaddy etc have higher prices for dot io domains than dot com. This can either be due to higher demand or the higher fees are the reason.
Often the higher demand is given as the reason for these prices, but there are reasons that suggest that the fees charged by the "Internet Computer Bureau" are the main driver of the cost.
First, because the "Internet Computer Bureau" not only holds the right to sell the dot io TLD. They also hold the rights to the dot sh and dot ac TLDs. However, these two TLDs are not nearly as popular as dot io but still cost $29.57, leading me to conclude that they have set relatively high transaction fees.
Second, if demand were the main driver behind the high prices, then dot com should be more expensive. As of September 2020, there were 3.4 million dot com domains registered. That represents about 68% of all registrations that month (4.9 million). While dot io didn't even make it into the top 10 TLDs of newly registered domains. This leads us to believe that "Verisign" has lower fees than the "Internet Computer Bureau".
But the demand argument is not completely absurd. While it's not true that demand for dot io is higher than for dot com, there is something to be said for customers being willing to pay more for dot io. GoDaddy has made the decision to price dot io 20% higher than the other "Internet Computer Bureau" TLDs they sell. This suggests that a higher price will be accepted by most customers looking for a dot io domain. They have even removed the promise of having the "same price next year". And by that, keeping all options open to generate even more income if the trend continues to grow.
2) I/O stands for Input/Ouput which made it popular in the tech scene
Since I/O stands for input/output, this TLD has become another great option for tech companies. In particular, founders who are bootstrapping a startup or simply working on a side project use alternative TLDs more often than they don't. The clear favorite here is dot io.
Dot com just doesn't seem as modern and contemporary to creative geeks. As a result of so many entrepreneurial minds working with these alternative TLDs, dot ios' ranking in the top 10,000 domains increased by almost 2,000% in four years.
3) Great com domains are incredibly expensive
While there are cheaper dot com domains the good ones are 10-100x more expensive. Many founders want to build their website on a short domain. But all 2-letter dot com domains are already taken. The same goes for 3-letter and even 4-letter domains. Adding to that, all 5-letter domains for English words are also registered. The only 5-letter domains still available are made-up words & garbage, which makes it incredibly hard to find good domains. Even we at Indiebrands barely hold 5 letter dot com domains.
Not only dot io is growing with great margins, but also dot co is becoming more and more popular. The trust in alternative TLDs is increasing rapidly, especially among young and tech-savvy people. This is not just a belief we have, but we have done in-depth research on this topic. In doing so, we learned that dot co has grown by 79% from 212,000 registered domains in 2018 to 379,000 in 2020. Read more about it here: 10 Reasons why .io & .co Domains are growing in popularity and trust.
Update 15.09.2022 Prices for .io domains got even more expensive as of September 2022. The prices rose by roughly $5.