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Domain Dilemma Puzzles Big Media

Land grab for new Internet extensions is either a proactive strategy — or an exercise in futility

What’s in a name? For the entertainment biz, a flood of new Internet domain addresses could spell both pain and gain. Nearly 2,000 new top-level domains — including .movie, .film and .video — are in line to join familiar extensions. When they go live in the coming months, these new top-level domains, or TLDs, could serve as powerful new marketing destinations. But they also will be a haven for squatters as well as a headache for legal departments that are tasked with policing digital identities and trademarks in an area that’s up to six times the size of the current domain name system.

Of the dozen major media and entertainment companies contacted for this article, none would officially comment on the expansion of the Internet’s domain space. Largely, that’s because they don’t want to tip off speculators about their strategies.

Privately, however, TV and studio execs express a mix of concern and bullishness about the situation. “We anticipate that we’ll have work to do concerning trademark and content infringers,” one digital veep said.

Others see a chance to own and control a piece of the Internet. Several big media and tech companies have applied for TLDs themselves, including ABC, Amazon, Apple, CBS, Comcast, Google, HBO, Microsoft, Netflix and Yahoo.

Many of those bids are defensive, aimed at heading off poachers who could, for example, plant their flag at .abc before Disney had a chance. But some companies definitely are exploring ways to use new TLDs for branded online services, said Brian Winterfeldt, a partner with Steptoe & Johnson specializing in trademark law, who works with Fortune 500 clients. Media firms are now warming to the idea as “an opportunity to develop customized, targeted Internet spaces to better connect with consumers,” he said.

Meanwhile, bizzers have doubts about whether new names will really gain any traction or awareness anywhere near .com, still the Internet’s preeminent neighborhood. “It’s kind of like Florida real estate: ‘Hey, we’re building off Key West and everyone’s going to move there!’ ” one senior veep at a media conglom said.

Skeptics point out that .tv, the country-code TLD owned by the Polynesian island nation of Tuvalu, has garnered only about 145,000 registrants. The namespace, operated by Verisign, has been marketed as a place for premium video since 2006.

L.A.-based Internet Corp. for Assigned Names and Numbers, the not-for-profit org that coordinates IP addresses and domain names, this spring approved 93 generic top-level domains. That wave, skedded to be operational by the summer, comprises international strings, most of which are in Chinese, Arabic, Hebrew and other languages with non-Latin alphabets. Icann is set to start to approve generic English names on a weekly basis over the next several months.

Seattle-area startup Donuts is the most aggressive prospector in the new-domain gold rush, having spent $57 million to apply for just 307 names including .movie, .film, .video, .studio, .audio, .music, .events, .games, .theater and .broadway. (Icann charged $185,000 per TLD just to get in the mix.)

Donuts’ pitch: New names will fix the scarcity problem of .com, which has more than 106 million second-level domain registrations (like variety.com). “If the domain name is the fulcrum for finding information on the Internet, you want to be able to have relevant, specific naming options,” Donuts communications veep Mason Cole said. “The whole point of this program is to increase consumer choice and competition in domain names.”

While Icann received 1,912 applications for generic TLDs, many are duplicates that will be auctioned off. For instance, Donuts is squaring off against eight other entities for .movie (including Amazon and Google) and three others for .video (which Amazon also wants). The startup has raised more than $100 million in VC coin, and this month said it hauled in “tens of millions” more in second-round funding to try to win as many of the contested names as possible.

The new TLD hopefuls downplay fears of possible trademark abuse. Out of the gate, Icann has 14 rights-protection mechanisms that apply to the new names. Cole said Donuts adds another eight on top of those: “.Video is going to be safer than .com and .net,” he claimed.

Well, maybe. The potential for infringement problems in the new TLDs remains “huge,” said Fred Felman, chief marketing officer at brand-protection firm MarkMonitor, a unit of Thomson Reuters. It’s especially acute for media firms, he added, given that the body of
their intellectual property is substantial.

Whether they like it or not, studios and other entertainment brands will be forced to at least closely patrol the generic TLD frontier — if not try to turn .lemons into .lemonade.

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