Tucows 2014 Annual Report Download - page 91

Domain Services
Wholesale
During Fiscal 2013, domain services revenue decreased by $0.1 million to $87.3 million when compared to
Fiscal 2012, primarily the result of two customers who have acquired their own registrar accreditation no longer
registering new domain names on our platform.
Value-Added Services decreased by $0.3 million to $10.3 million when compared to Fiscal 2012. This decrease
was largely due to the $0.6 million decrease in revenue from sale of domain names and advertising from the OpenSRS
Domain Expiry Stream which was primarily attributable to slower sales to certain third-party partners. This decrease was
partially offset by increased digital certificate and email sales.
During Fiscal 2013, the number of transactions from all new, renewed and transferred-in domain name
registrations that we processed decreased by 0.1 million transactions to 9.1 million when compared to Fiscal 2012 and
reflects the impact of customers who have acquired their own registrar accreditation no longer registering new domain
names on our platform. While we anticipate that the number of new, renewed and transferred-in domain name
registrations will continue to incrementally increase in the long term, the volatility in the market could affect the growth
of domain names that we manage.
As of December 31, 2013, the total domain names under our management remain essentially flat at 10.6 million,
when compared to December 31, 2012. The total domain names under our management continue to be impacted by two
customers who have acquired their own accreditation no longer registering new domain names on our platform. In
addition, we provide provisioning services on a monthly basis to accredited registrars who use our technical systems to
process domain registrations with their own accreditation. As of December 31, 2013, we managed 3.6 million domain
names on behalf of other accredited registrars, an increase of 0.2 million compared as of December 31, 2012.
Retail
Net revenues from Retail for Fiscal 2013, as compared to Fiscal 2012, increased by $1.6 million to $8.4 million.
This increase was largely due to the success that our retail marketing initiatives and improved websites are having on our
ability to attract new customers and retain existing ones for Hover.
Portfolio
During Fiscal 2013, Portfolio revenue increased by $1.5 million, or 25%, to $7.5 million when compared to
Fiscal 2012. This increase primarily resulted from payments we received on our withdrawal for the domain related rights
for our .media and .marketing new gTLD applications being partially offset by lower sales of big ticket domains and
certain of our vendors electing not to repeat market development programs that they undertook during fiscal 2012.
We have two primary buyers for our domain names - domain investors and businesses. While businesses domain
sales continue to grow, we have begun to see evidence of domain investors interest slowing as they attempt to assess the
impact the introduction of new gTLD’s may have on their businesses. Accordingly, until the impact of new gTLD’s can
be appropriately assessed, we will be shifting our efforts towards appealing more to businesses while continuing to work
with domain investors.
The market for monetization of domain names is rapidly evolving and is being impacted by uncertainty around
the implementation of ICANN’s New gTLD Program.
Network Access Services
Ting
Page 91 of 20
2
tcx20141231_10k.ht
m
9
/
13
/
201
6
https://www.sec.gov/Archives/edgar/data/909494/000143774915004707/tcx20141231_10...