Ready To Pay More for Love? Dating Apps Demand Deeper Pockets As You Search For The One

The quest for love in the digital age has hit a bump as dating apps resort to costlier subscription tiers and special features to bolster their revenues amidst a saturated market and decelerating growth.

What Happened: Dating apps have metamorphosed the romantic landscape into a gigantic industry over the last ten years, with users spending over $5 billion globally on these platforms in 2023 alone, according to the Financial Times.

Match Group MTCH, a $9.9 billion behemoth that owns 45 dating brands such as Tinder and Hinge, increased its subscription costs and unveiled new service levels across its leading platforms in 2023 to reinforce its revenue and stock price.

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Despite the 6% YoY decrease in Tinder’s user base due to elevated prices, Match Group’s total revenue increased by 10% YoY to $508 million in Q3 2023, thanks to the $499 per month Select subscription on Tinder, offering “unrivaled access” for its most popular profiles.

Match Group’s CFO Gary Swidler stated, “We’re not focused on a specific key performance indicator…we want to maximize overall revenue,” thereby elucidating the company’s comprehensive pricing approach.

Why It Matters: This tactical shift comes as Match battles with decelerating sales growth, dwindling paid users, and a stock price that is currently 63% below its 2020 listing price.

The dating app sector, which largely follows a “freemium” model, is grappling with user reluctance to pay for additional features and services. The idea of commodifying love doesn’t sit well with many.

In 2022, the number of dating app downloads reportedly hit their lowest point in four years. Moreover, the cost of living crisis is also taking a toll on millennial daters, adding another layer of complexity to the evolving digital dating landscape.

However, apps like Hinge and Bumble are exploring monetization strategies and introducing subscription tiers to increase their revenues. According to a Benzinga report from December 2023, Grindr, a leading dating app, is experimenting with artificial intelligence to improve user experience and potentially boost revenues.

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This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.