Premium Domains
TLDR
- All domains have a pricing classification, aka fee class.
- A domain’s fee class is not exposed to registrants.
- The price tiers for registry premium domains are not well-defined.
- The term premium is an ambiguous, overloaded term.
- Registry premium domains have no price protection.
Overview
Premium domains, or more precisely registry premium domains, are domains that registries do not put into the standard price class. They typically include short domains or domains with high-value keywords and have significantly weaker price protections than standard domains.
Fee Class
All domains have a fee class. RFC 8748 defines the Registry Fee Extension for the Extensible Provisioning Protocol and is the best public source of information for determining how premium prices are applied to domains. The fee class for a domain is set by the <fee:class> element. RFC 8748 describes the fee classes that may exist (truncated).
Section 3.7 of RFC 8748
If a server makes use of this element, it should provide clients with a list of all the values that the element may take via an out-of-band channel. Servers MUST NOT use values that do not appear on this list.
Servers that make use of this element MUST use a <fee:class> element
with the value “standard” for all objects that are subject to the
standard or default fee.
This means there are two primary types of fee class. All non-premium, aka standard, domains will have a fee class of standard. Registry Premium domains may be given any other value for the fee class.
Opaque Classification
Registrants are not provided with the fee class for domains, especially for registry premium domains. If buying a standard domain, it is reasonable to assume the domain is in the standard fee class, but registrants will often lack the documentation to prove this and will be vulnerable to reclassification.
When registering a domain with a premium label, it is likely, but not guaranteed, that you are getting a registry premium domain. Some registrar APIs, like Namecheap’s will show if a domain is a registry premium domain, but typically do not expose a domain’s fee class.
If spending a large amount of money on a premium domain, consider consulting with a domain broker. High-quality domains in the standard fee class are more valuable than high-quality registry premium domains because of the difference in renewal costs and price protections. It is important to understand the distinction.
Unlimited Premium Tiers
There is no limit to the number of premium tiers (aka fee classes) registries can create. Registrants are not given access to the list of fee classes used by the registries and each registry may use a different list. The classifications are arbitrary and registrants will find it difficult or impossible to obtain fee class for their registry premium domains.
This is an important risk to be aware of because the lack of transparency can leave registrants vulnerable to non-obvious price discovery and discrimination tactics. Additionally, although there is a pragmatic limit on non-standard, aka premium, fee classes because they must be predefined and provided to registrars prior to use, nothing forbids registries from creating small or unique fee classes for extremely valuable domains.
Overloaded Terms
The term premium is frequently used to describe many different things. This overloading of the term can make it complicated for registrants interested in purchasing high-value domains. All premium domains fall into at least one of two groups.
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Registry premium domains are registrations the registries made directly available to registrants.
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Aftermarket premium domains are domain registrations that are sold in 3rd party marketplaces. The registrations are not sold directly to registrants by the registry. Instead, the original registrant of a domain will offer it for sale and will transfer the registration to a new registrant that buys the domain.
This can be confusing if a premium domain falls into both groups. For example, an aftermarket premium domain can also be a registry premium domain. If such a domain has a low, near-standard renewal price, it can be difficult for registrants to understand if the domain is in the standard fee class or a non-standard, aka premium, fee class. The distinction is important.
No Price Protections
Unless a registry provides a registrant with an agreement that defines specific prices or percentage increases for the renewal of a premium domain, it is reasonable to assume there is a risk of arbitrary price increases.
As described in price protections, registrants can agree to waive identical renewal pricing protections after “clear and conspicuous disclosure of such Renewal Pricing”. Registrants will need to agree to this for all registry premium domains and, as long as the registration agreement discloses renewal pricing will be higher for premium domains, renewal pricing can be anything between $0 and infinity.
Namecheap does a good job of disclosing the higher renewal pricing (emphasis added, truncated).
Section 11 of Namecheap’s Registration Agreement
Non-standard domains have non-uniform renewal registration pricing, such that the registration fee for a domain name registration renewal may differ from other domain names in the same TLD (e.g. renewal registration for one domain may be $100.00 and $25.00 for a different domain name).
Porkbun does a good job of describing the expectations registrants should have (emphasis added, truncated).
Porkbun’s Premium Domain FAQ
Please note that some premium domains have a high initial price but renew at a low, non-premium (“GA”) price, while others renew at a higher price on an ongoing basis. Be sure to check the projected renewal price (displayed at checkout) before you register a premium domain name.
The base registry agreement does not forbid or limit changes to the renewal prices for premium domains, so registrars cannot give any guarantees to registrants. The renewal prices registrars show for premium domains should, as Porkbun correctly describes them, be considered projected prices.