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Each app has its own competitive advantage or spin on the dating game: With its monthly subscription fee, Match. com attracts people willing to put their money where their mouth is. When it comes to the most popular apps in the US by audience size, Tinder, Plenty of Fish, Match.
com and OkCupid lead the pack respectively. And, while Tinder is the most popular among year-olds, Match. com is most popular for the demographic. Still, when it comes to actual ownership by company, these two models become more blended. Users might not realize that Match Group actually comprises 45 brands , including big names such as Match.
com, OkCupid, and Tinder, and it IPOed in There are two factors that have shifted the landscape towards the giants in the market, the first of which is the huge success of Tinder. Very few of the newer apps will end up lasting.
Most of them are gone almost as quickly as they show up. With so many dating sites, it can encourage customers to try out its other sites as well. According to PrivCo, while funding was up in , the size of individual rounds is declining. Small amounts of funding are generally not enough for the large marketing budgets that dating apps require for user acquisition. While VCs are notoriously seeking loyal and longer-term users, dating apps tend to attract periodic users without much loyalty and who like to switch between services.
On top of that, monetization for dating apps has been slow, with apps wanting to focus first and foremost on the user experience. We will discuss dating app monetization and business model in the next section. In addition, the dating giant Match Group is also owned by IAC. For the dating apps still seeking funding, all hope is not lost. There are some common traits among the ones who have received funding in the last few years. Investors also seem to prefer apps that simplify dating options.
While it might become more difficult for smaller players to succeed, the industry has been abuzz since Facebook announced its foray into online dating. Facebook users will soon be able to elect to create a dating profile on Facebook, and since Facebook has so much data on its users, such as mutual friends, dating preferences, and common interests, it claims it should be able to deliver better matches.
Users will be able to browse events in their city, but their activity and dating profiles will only be visible to others also utilizing the dating feature. Still, Facebook could face some obstacles in building enough separation between the dating service and the legacy social network; some users might not like having both activities live on one app.
And, Facebook has failed many times before , including Snapchat copycat apps Slingshot and Poke, as well as Room , which was meant to be a pseudonymous app that allowed users to create forums about any topic. com might be the most vulnerable to Facebook.
If Facebook sticks to simply helping people find events and groups to connect at, there may not be as much overlap between the two services. On an earnings call post-announcement, Ginsberg also pointed to the fact that only a quarter of Tinder users still rely on the Facebook platform to access the app. Other apps have indicated that they might actually move closer to Facebook.
For example, Bumble, founded by a former Tinder executive, said they had already reached out to Facebook regarding how to collaborate. So, how exactly do dating apps make money while keeping in mind the importance of utility to the user in the space?
In general, the business model for dating apps falls into three broad categories : subscription plans and freemium, which utilize advertising and in-app purchasing. The subscription model is the oldest model in the dating app sphere, requiring users to pay a fee to use the app for a set period of time usually a week or a month.
The payments are typically recurring. The most prominent example of such is Match. These sites are focused on finding people a serious relationship and tend to skew towards an older population who are willing and able to pay. Zoosk, eHarmony, and Chemistry, and Our Time are also paid dating services. Typically, the paid subscriptions are cheaper by the month if the user commits to a longer period of time. The freemium model hinges on the concept where users can sign up and use the basic functionalities of the app for free, while the app generates revenue either via advertising or unlocking enhanced features for a fee.
Without a barrier to entry , freemium dating apps often wait to build scale , loyalty, and active users until they introduce paid features. They typically use a combination of both options.
In-app advertising is a way for the app to generate shared revenue with advertisers from clicks, views or transactions. In April , Tinder launched its first ad campaign for Budweiser, where users viewed a Budweiser video within a few swipes. The campaign went viral. However, Facebook has gone on record saying that its dating service will not include ads. Though basic membership is free, users can pay for extra, enhanced features. As of September , Tinder was the highest-grossing app on the app store among US consumers.
It took Tinder about three years since its inception to start monetizing, as it was working to build its user base and loyalty before turning on the monetization engine. In second place is female-friendly Bumble, which also only started to monetize in August of
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