Free dating website Chicago

Tinder challenged by millennials who won't pay for dating apps

Paul Eggler has three free dating apps on his smartphone and hasn't found a partner yet.

Even so, the 28-year-old, who is pursuing a master's degree in computer science at Washington University in St. Louis, isn't willing to pay for more features or a premium matchmaking service that might give him a better chance.

"Why spend 20 bucks a month when the free ones are pretty good?" said Eggler, who has been looking for a partner on Tinder, Hinge and Coffee Meets Bagel.

Tinder rolls out services in March — including the ability to undo swipes indicating interest in a potential partner or not — at a time when young singles are relying less on EHarmony and other traditional dating websites, which can cost $30 to $40 a month and typically target an older age bracket. At stake is a chunk of an industry with annual sales of more than $2 billion, according to IBISWorld.

"All eyes are on Tinder right now, " said Mark Brooks, a dating-website analyst and consultant. "They'll set the tone for monetization."

Tinder, based in West Hollywood, California, has been testing Tinder Plus, which also lets people swipe for matches around the world, at different prices up to $20 a month, depending on the features.

Tinder is part of IAC/InteractiveCorp, Barry Diller's holding company of websites and dating apps, including Match, OkCupid and HowAboutWe. Sam Yagan, chief executive officer in charge of IAC's personals division, said it's fine even if there isn't widespread adoption of Tinder Plus.

"The vast majority of people will decide not to use it, " Yagan said. "We're in the first inning on monetization. We're trying to figure out which features users care about."

Tinder could bring in $45 million in revenue in 2015, Oppenheimer estimates. That would make it difficult for IAC to reach its goal of Tinder generating as much as $75 million a year in earnings before interest, taxes, depreciation and amortization.

"The math would suggest they're seeing generally happy users, " said Jason Helfstein, an analyst at Oppenheimer. "The company is now confident enough to ask to get paid for certain features."

Tinder's challenges also include the distraction of a sexual-harassment lawsuit by a female executive, as well as the conundrum facing every dating app or service: A successful match means the loss of a paying customer. When users find a partner, they no longer need the service, at least until they're single again. That's compounded when the app starts out as a free service.

"I wouldn't ever pay for Tinder, " said Natalie Harms, 23, an associate editor at the Houston Business Journal and self-proclaimed lazy dater. "Part of the reason I'm on Tinder and other dating apps is because I don't want to pay for costly online-dating sites."

Behind the proliferation of dating apps is their popularity. One in 10 people in the U.S. have used mobile-dating sites or apps, and an estimated 38 percent of people searching for a partner in the United States have signed up for an Internet dating service, according to the Pew Research Center.

Hinge, which taps into a user's Facebook connections to find about 20 matches a day, isn't planning to introduce any steps to monetize its dating app until 2016, according to CEO Justin McLeod.

"We want to keep growing through word of mouth, " McLeod said.

Match, OkCupid, Zoosk and Plenty of Fish rank among the top 10 grossing apps, excluding games in the iOS and Google Play stores, according to App Annie, which collects data on the mobile-app industry. The startups' key asset — something smaller competitors lack — is scale, according to Scott Kessler, an analyst at S&P Capital Markets.

"Dating is one of those areas where your network effects are tremendously important to build out your business, " Kessler said. "There's a big difference between building something that has appeal, and turning it into a defendable, sustainable business."

Almost half of the revenue in dating services is shared among three companies, according to IBISWorld. IAC is the leader with a 27 percent market share, followed by EHarmony with 14 percent and Zoosk with 5.1 percent. Dating apps attracted $64.8 million in venture capital during 2014, according to CB Insights, and are racing to amass members and edge out competitors

"One of the most difficult things in this industry is developing a user base, " said Jeremy Edwards, an analyst at IBISWorld. "For the first five to 10 years of developing a lot of companies will focus on marketing efforts and don't really try to turn a profit."

You might also like:
Fox Chicago w/ Bela Gandhi of Smart Dating Academy
Fox Chicago w/ Bela Gandhi of Smart Dating Academy ...
FREE Online Dating at Confirio.com
FREE Online Dating at Confirio.com
Related Posts