Why some domains are “Premium”, and why they cost more

For something so fundamental to the Internet, the domain name industry contains a lot of surprises. Some of them are good - like the way .nz and .au registrations help fund groups that advocate for an open and free global internet. But then some surprises aren’t so great, as anyone who has tried to register a “premium domain” has found out.

Premium pricing can get very serious. The few remaining two-letter .co domains, for example, are listed for US$150,000.

This article explains where premium prices come from (spoiler alert: not us!), why they spring up so late in the registration process, and what happens in the background while you decide whether the extra cost is worth it.

Prices are set by registries

Every top-level domain (TLD) has a wholesaler, or registry, that sets prices. (If terms like “top-level domain” and “registry” are new to you, keep our Glossary of domain-related terms handy while you read on.) Often that means that they set one wholesale price which applies to every domain with the same TLD. That's how it is in the .nz, .au and .com namespaces, for example.

In some other cases, registries define a small number of domains as "premium", and charge retailers like us a higher amount to register them. Of the TLDs that we offer, .co and .biz are the most popular ones to do this. When it happens, we are left to pass on higher costs to customers like you.

One way to avoid premium prices is to avoid unregulated, profit-driven TLDs. Plenty of common TLDs are premium-free zones.

Premium pricing might amount to a few extra dollars, or it could be jaw-dropping. The few remaining two-letter .co domains, for example, are listed for US$150,000.

It is not a coincidence that .co and .biz are both overseen by GoDaddy Registry, which is a private for-profit operator. Our article about how a domain’s TLD can help you predict its future price looked at the difference that this can make:

"Some registries are profit-driven businesses. We’ve seen a lot of steep wholesale price increases within this category of TLDs. This is nothing more than market forces at work."

GoDaddy Registry has the right to charge whatever it likes for domains. When they give a domain a premium price, they say this is to “reflect its relative value in the marketplace”. Things that imply a higher value include:

• The short length of one, two and three-character domain names.
• The inclusion of popular search keywords.
• Something they call “brandable domains”.
• Much more generally, “domains that are in high demand”.

Whatever the amount is, you might not find out that a particular domain counts as premium until after you’ve tried to register it.

As well as costing more to register, premium domains can carry other costs like higher transfer fees, which would apply if you moved your domain registration between providers.

Premium prices aren’t easy to see

Like most domain retailers, we list a single price for each TLD on our website and in our store. For example, in our store today .biz domains are priced at $40/yr and .co domains are $80/yr. We don't have a price list of premium domains, because the supplier doesn't provide one.

So if you've been trying to register a domain and you've been caught out or slowed down by premium pricing, we're sorry. We couldn't see it coming any more than you could.

The domain is automatically set aside so you have time to make up your mind before anyone else can grab it.

When you search for a new domain, say, premiumexample.biz, our systems can automatically check whether it is available, but not whether it is “premium”. That bit of information doesn’t flow to us until after you’ve selected the domain and submitted your payment.

Obviously, this is not perfect.

The upshot is that your attempt to register the domain fails and, importantly, no money leaves your credit card. We are told why the domain registration failed, and then it's our slightly embarrassing job to get in touch with you and explain that, sorry, premiumexample.biz costs more than anyone realised before now.

It’s entirely your decision whether you pay a premium price or not. The domain is automatically set aside so you have time to make up your mind before anyone else can grab it. If you decide to go ahead, the domain is yours to register. Otherwise you can return to your search.

Avoiding premium prices

One way to avoid premium prices is to avoid unregulated, profit-driven TLDs. Plenty of common TLDs are premium-free zones. To give some popular examples, there’s no premium pricing on:

• .com
• .net
• .org
• .nz
• .au

If you'd rather stick with the same TLD (like .co or .biz), look for something longer or less distinctive.

On the other hand, if the price is right and a premium domain is an investment worth making then it’s your decision. There’s a bit of back and forth along the way, but we’re always happy to get the registration done.

Images: Tuxedo dog by Caity from Pixabay; Piggy bank by Quince Creative from Pixabay

MyHost's list prices for .co and .biz domains are accurate as of 16 April, 2024.