The future of vanity TLDs: Porn's .XXX business plan
At a recent summit, porn industry leaders and an expert panel held a discussion with .XXX's Vaughn Liley. The open industry Q and A, to form the industry's business plans for the new TLD, did not go well.
Big Porn's take-away illustrates a troubling future where vanity TLDs are nothing more than a frontier for prospectors that look more like copyright trolls than legitimate prospects.
ICANN's board recently voted to increase the number of Internet domain name endings–generic Top-Level Domains (gTLDs)–from the current 22 to a unlimited number of new Top Level Domains. The vanity extensions could range from .apple to .zynga - but right now the very first of the vanity TLDs is getting ready for opening registration day: the porn extension .XXX.
In preparation, .XXX's ICM Registry is sending their Director of Sales Vaughn Liley to adult conferences, summits and conventions to meet with porn industry leaders and "win hearts and minds."
Watch the one-hour video of his appearance on a recent panel along with Connor Young (President and CTO of YNOT Group), Tom Hymes (AVN) and Eric M. Bernstein (Attorney at Law) with questions from a conference room of leading porn webmasters, and I think you'll agree that the feeling is more of a sinking one, than a soaring one.
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Expectations were high before the summit discussion began.
"A lot of people are trying to decide what dot-xxx means for their business,” Young said. “This presentation will give everyone the details they need to make an informed decision, whichever way they decide to go."
Liley stated, "With the launch of the registry less than 80 days away, I look forward to informing community members of the benefits of dot-xxx names and how and when to apply for them."
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Like a porn version of Angry Birds, without the porn
The video of the question-and-answer session is very revealing.
Most left feeling like there were few reasons to buy a .XXX domain other than in self-defense - which may whisper the future of what an unlimited number of vanity gTLDs will look like.
Tensions were high the minute the session started, and moderator (popular adult genre author) M. Christian cautioned adult webmasters and panel experts alike to maintain civility, knowing that temperatures were already running hot about the contentious TLD.
One of .XXX's uniquenesses is that .XXX domains are to be governed by an oversight board, ICM's proposed IFFOR ("International Foundation for Online Responsibility"). The purpose of IFFOR has changed many times since .XXX's inception ten years ago, and its role is still unclear other than creating policy for .XXX domain owners.
Connor Young explained to the summit that if you buy one of these domain names, it's IFFOR that tells you how the domain can and can't be used. He posited a murky future, suggesting that if a domain owner were to invest money into creating a domain of value, ICM is offering no security against IFFOR deciding to change the Board policy for domain admin rules.
Then what, he asked? Do you give up the domain or fight? "Either way," he told the summit attendees, "you will be at the receiving end of a board that will decide how you run your domain and that may not be in your best interests."
ICM's representative Vaughn answered this concern by stating that for IFFOR, ICM had confirmed former ACLU President Nadine Strossen, and Indiana University's Professor Fred H. Cate, who specializes in information privacy and security law issues. Vaughn said, "The appointments should send a signal that we are for free speech and we mean business, and are going to do a good job with it."
Tom Hymes was quick to point out that Strossen and Cate are actually on IFFOR's policy council - which makes recommendations but is not the body that will set policy.
It was one of the few times ICM's rep would be called out on inaccuracies or self-contradictions; including one made later regarding Twitter's participation in .XXX.
Countries threatening to block the domain
Hymes continued, stating the concern that many potential ICM customers have about .XXX domains being blocked by individual countries, such as India. This quickly turned into a heated shouting match over which countries did or would block the domain, with Vaughn insisting that India "had not made up their mind" about blocking the TLD, and Hymes re-stating the concern, adding Australia as a potential block.
Vaughn Liley's next line of reasoning was not what I expected. He turned to the room and asked, "Who gets revenue from India? Why does it matter if the country is blocked when you don't get revenue from them anyway?"
He minimized the filtering issue by telling the room it was no big deal. "Other countries already block .coms, .nets, anyway."
When queried about potential U.S. legislation around .XXX, Liley basically said it was someone else's job to do any talking with legislators. This did little to reassure a business that deals with opportunities of legislation on a regular basis that tries to restrict their businesses, and a TLD that has already been suggested for censorship in Congress.
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Brands, trademarks, your kid's name, and... Twitter.XXX?
Another chief concern was voiced by Hymes when he challenged Vaughn openly on ICM's popularly perceived business plan of defensive registration. More than one summit attendee voiced they they felt they were being extorted for their identities. "Dot-XXX's buy now before it gets squatted is a fear tactic."
Attorney Eric M. Bernstein asked Vaughn simply, "What's the procedure your company is going to take to prevent people from buying domain brand names that are not theirs?"
Vaughn Liley told him, "There is a Sunrise program in place, much like an orderly boarding process for a plane. Trademarks get called to board first, own the name in another strength - you get called first." He continued, "This has not been done with any other TLD, we did that expressly to protect the [adult] industry."
No one mentioned the fact that this is, in fact, what every new TLD has done during the sunrise period.
Still, Bernstein continued, "But what is the process you're going to use for advising each and every adult and non-adult company, every website owner from .gov to whoever?"
Vaughn answered, "It's done in several ways." He listed press releases and PR campaigns, visibility in the media, and "I can come talk to people." He explained that this advising - nee screening? - was going to take place between the registrar and its customers, when the registrar ("like GoDaddy") contacts its customers and offers it."
To register a .XXX domain, ICM states that buyers must prove they are members of the adult entertainment industry. Attorney Bernstein pushed Vaughn to explain how the registrars will be policing the registration process according to ICM's assurances to protect names and brands.
I'm not talking about the industry. Adult already knows about .XXX - what about the millions of average website owners like me? Is everyone non-porn going to have to trademark their non-adult names to protect themselves against a .XXX registration?
I am 99% sure that many lawyers are unaware that their clients' names could be registered and used essentially against them, a site to bash, to defame, or to downgrade their clients' brands. I can't buy [mysitename] as a dot-gov. What is ICM doing to prevent everything unrelated to adult being put on these sites?
About the registrars, Liley answered only that "they are doing it on their own," and explained that ICM has educated them about it. "If you want a .XXX domain, go to [our website] and read about the sunrise period. Then call your registrar, watch the press for new information." He said that the .XXX process is not a surprise for anyone, "we've been in the press a lot, we are working with PR."
Liley explained basic web registration, that any domain owner in the world can buy their domain name "(...) in any other form; you are free to do so. You are out of touch with the domain business if you think this business is any other way."
Liley offered little in his answers by way of assurance that any porn webmaster would not be able to come along and register domains; in fact, no points of vetting, rules or requirements were put forth. When Bernstein asked what the requirement for pretesting was, Liley responded with a glib referral to the sunrise period saying that "If you want to buy the domain the sunrise is in place for trademark owners and if you miss that, you miss your opportunity."
In a later answer he elaborated saying, "With our process we're allowing a sunrise process for big brands to get their brands." Liley told the summit that after a domain is grabbed [by someone else, not the rightful owner] it can be resolved via UDRP "for about $5,000. You can pay us $60-70 now, or chase it through the courts later."
A female entrepreneur asked what the average cost per domain for non-use registration and Liley answers that he thought it would be around $300. She replied, "I have 35 domains for my business. Why does it cost more for non-op?"
Liley told her, "You can buy the domain and have it blocked or buy it and have it not resolve. The price is going to be set by the registrars. The cost is a case of the function of making it not resolving and we have to do the various checks of making sure you do own the domain, there is a sum cost to ICM to make sure you own it."
It was clear that no one was hearing Liley's answers and thinking, .XXX is where I’ll cash in. Like the rest of us, they were thinking, I better buy my business name, my daughter’s name, and my own name… just in case.
Attorney Bernstein wanted to know, "How does a child or someone non-business (like a blogger) that has nothing to do with business protect their names? How does John Doe protect themselves if they don't have the $300 to spend?"
Vaughn stuck with the policy line: "To buy a domain you have to attest you are a pornographer and be 18." Bizarrely, he fantasized, "Twitter will want to buy .XXX and they might want to do an adult Twitter so anyone that wants adult info can go to Twitter.XXX."
Hymes asked, "Why should Twitter pay to protect its name when it is not an adult website [to buy it] in the first place?"
Vaughn replied, "Twitter will just buy everything, sponsored or not."
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It's not so much about the children anymore
When it came to open questions, it seemed even more like ICM's Liley was shooting from the hip.
When one industry member asked what .XXX might offer on piracy issues, Liley suggested that maybe the policy council could create and enact a three strikes rule, after which "we can turn off the domain."
Child protection was another major concern the summit felt ICM needed to address. Connor told Liley, "Child protection keeps coming up because it's what was used originally by .XXX, and now you've moved on."
Liley responded saying that "every .XXX domain comes with a powder label, equivalent to an RTA label, that lies in the domain name itself. The responsibility of accessing the adult content is in the home and lies with the parents. It's a label the browser reads; you can tell the browser not to allow .XXX sites, so the responsibility is in the home."
An SEO-minded attendee asked Liley if ICM had talked to Google and Bing about .XXX indexing.
Liley responded like a company man. "We did talk to them and we are launching our own dot-XXX search engine. They did not say they would not index us, but we feel that independence is important."
In my mind that if ICM is doing its own search engine for .XXX then that means no, Dorothy: your site ain't getting indexed in Kansas (by Google, anyway).
He wound up with a sales pitch to an audience that wasn't buying it. Liley opined that if ICM could educate the wider consumer (ostensibly through PR) to search for adult content on .XXX, then ICM could offer good ROI (return on investment) to customers. He said it would make it "at least $60 worth of traffic."
Liley told the panel and adult industry representatives that ICM had just done an $8 million deal with McAfee. When you register a .XXX domain with them, he explained, customers will get McAfee for free. Liley told the business group, that this would make their sites look more viable because McAfee had shown that consumers spend more on sites "that have that green checkmark" and that it is a $360 value.
ICM's Vaughn Liley pitched the room, "What do you have to lose, $60? Give it a shot."
The overall sentiment of the adult industry was echoed in sentiments by Jay Kopita, Director of Operations for YNOT Summit:
In the final analysis, there just seems to be no real benefit to owning domains with the .XXX extension.
They are expensive, countries are starting to block them, and furthermore, all registrants have to agree to a third-party to monitor their sites for compliance. Why put yourself at risk for censorship and blocking?
I have absolutely no desire to purchase nor develop websites with a .XXX domain and I urge everyone else to follow suit.
It's a grim future if this is how the vanity TLDs are going to behave.
Images by Michiel (first page), Peter Shanks (second page) and Ajay Babber (third page), under Creative Commons 2.0 Generic license, via Flickr.