.TV Corporation unveiled its business plan on Wednesday and started taking reservations for Internet addresses in the ".tv" domain for US$1000 a pop. The company, in turn, will share some of its revenue with Tuvalu, a tiny country that was originally granted the country code top-level domain.
"We're providing Internet-savvy companies the opportunity to brand their web sites with one of the most recognized words in the world �- TV," said Jason Chapnik, president of the .TV Corporation, a subsidiary of Information.ca.
.TV Corp. bought the right to use the .tv domain from Tuvalu for undisclosed terms in August. At the time, Canadian Business reported that, as a result of a bidding war, the Toronto company would pay Tuvalu a $50 million advance.
Chapnik declined to discuss the terms of its agreement with Tuvalu, but said the government of of the South Pacific island nation, population 10,000, "receives the majority of revenues from the first year registration fees and renewal fees."
"We researched this decision carefully and are confident that Jason Chapnik and the .TV Corp. have the Internet expertise and are the right people to successfully manage this new domain on behalf of Tuvalu," said Tuvalu's Prime Minister Bikenibeu Paeniu in a statement.
.TV Corp. will charge $1000 to reserve a name, and a $500 annual renewal fee. Chapnik would not forecast revenues or name technology partners or companies that have already signed up. But he said the interest in the .tv domain just today has been a "whirlwind."
"The potential market size is unlimited," he said.
In the future, .TV Corp. will look at a potential initial public offering, Chapnik said.
But the arrangement once again raised protests about how domain names are doled out by a coalition of private companies and government-backed organizations. Critics said such arrangements create monopolies that exact heavy tolls from Web-site operators.
"The result of monopoly is higher prices," said Karl Denninger, founder of alternative top-level domain provider eDNS. "This should surprise no one."
.TV Corp. will try to make money by registering addresses for TV networks, Internet directories, studios and advertising agencies. Chapnik �- who is a veteran of the Realtor.com Web site venture -- said a portal Web site is in the works.
The site is accepting "reservations" for domain names as of Wednesday, and will begin registering the names in February, said Chapnik.
If demand for addresses like MTV.tv matches Chapnik's expectations, there likely will be huge disputes. To resolve them, .TV will hold auctions, Chapnik said.
"I think their chances of making any money on it are directly proportional to [their amount of] skill and power at marketing" and domain administration, said Antony Van Couvering, former president at NetNames, a domain name registration company, and also a bidder for the .tv domain. "I don't know how they are going to do that, but I don't think they have a tremendous amount of experience."
Van Couvering first consulted the Tuvalu government on how to profit from its .tv designation. He later dropped out as a consultant, though, to become a bidder. While at NetNames, he helped run similar arrangements with countries like American Samoa's ".as" and Turkmenistan's ".tm"
Other countries have also tried to make money from their country code top-level domains.
For example, quite a few people register sites in the .nu domain, which was granted to the Polynesian island of Niue, for $25 a pop. Perhaps it's because nu means naked in French.
Competition for the .com, .net and .org domain names opens up this spring, when Network Solutions is scheduled to loose its monopoly on these names. Network Solutions charges $117 to register addresses in those domains for two years.
Time will tell if companies pony up the money to reserve their .tv domains.
"I think .com is still too well recognized for people to pay $1500," said Rick Miller, analyst at International Data Corp.
