We took a look at 50 of the largest dating apps and sites to give you an idea of what singletons are willing to splurge on, and how much money there is in digital courtship.
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For the full analysis, please refer to this spreadsheet.
It’s no secret: not all single people want to be single. And we live in an era where there are more singletons than ever.
However, since Match.com (the OG of dating apps) launched in 1995, a flurry of new options have become available pairing courtship with technology. No longer does your relationship status rely only on your in-person network or pure luck, but instead your ability to build a profile, swipe tactfully, and even pay for a better shot at finding “the one.”
In this piece, we dive into the economics that power the $3B industry, deconstructing 50 of the largest dating apps. They won’t teach you this in their apps, but you really can put a price on love.
Is it cool to be single yet?
There’s a common storyline that has long been sought after: grow up, get married, have kids. Ideally in that order.
But that story is not everyone’s story. And if it is, the journey there may not be so linear.
In fact, there are a couple trends underpinning a few significant shifts in the dating industry:
- Americans are more single than ever. The industry is supported by the fact that singletons surpassed married adults in 2014.
- Many people are looking towards technology for the answers. With over 8k online dating sites in existence (as of 2013) and 50m Americans giving the platforms a shot, online dating is no longer for the fringes of society. Statista puts that number even higher at 31%.
- According to eHarmony, 20% of committed relationships began online.
- The global online dating market sits at $3B, with some expecting it to reach $9.2B by 2025. The business is seeing growth across every service type: matchmaking, social dating, adult dating, and niche dating.
With the total addressable market of dating being 100s of millions of potential users, if not billions, many new and existing companies are looking to grab a piece of the pie.
The Match dynasty
Starting in 1995, Match.com was one of the first dating sites to come to market. Since then, there’s been a lot of innovation, but Match group has managed to secure many of the key players, including Tinder, Hinge, OKCupid, Plenty of Fish, and of course its flagship product Match.com. In total, they own 45 dating-related sites, including 25 they acquired. Remember that $3B market size? Yeah, Match Group brought in about $1.7B of that in 2018. And their current market cap? Almost $20B.
Other conglomerates exist, including Meet Group (Hi5, Tagged, MeetMe, Skout, Lovoo), MagicLab (Badoo, Bumble, Chappy, Huggle), and Spark (Zoosk, J-Date, Christian Mingle, Elite Singles). In fact, of the 50 apps we analyzed, approximately half belonged to these large entities.
Despite the marriage of many of our dating sweethearts, there has also been an uptick in niche dating apps, particularly in the last decade as the app-economy took off. For the purposes of this article, we’ll use the term niche to describe some subset of people that the app targets, unlike an app like Tinder or Bumble that targets the entire population.
These apps have chosen to target people based on the following:
- Sexual preference or orientation (Ex: Grindr, Her, Zoe)
- Intelligence or status (Ex: Mensa Match, The League, Inner Circle, Raya, Luxy, Elite Singles)
- Physical beauty (Ex: Beautiful People)
- Ethnicity (Ex: Black People Meet)
- Religion (Ex: Christian Mingle, J-Date)
- Specific interests (Ex: TasteBuds, Farmers Only, Sea Captain Date, Biker Kiss, DateFit, Loosid, Dig Dates, Kanye Dating)
- Age (Ex: OurTime)
How do you put a price on love?
Dating apps make money by leveraging the transfer of information. Outside of a few apps that monetize through ads, most new-age dating applications monetize through premium plans. These plans give the user more access to information or opportunity — whether that’s who’s swiped right to them already, the ability to have your profile promoted, or the luxury of sending custom messages. In theory, by paying more money you can increase your odds of being noticed — and finding the right match.
Different apps achieve this in various ways through their basic model:
- They use technology to enhance opportunity. For example, Happn matches you with people who you’ve crossed paths with, using location-based technology. Others use machine learning to suggest potential mates.
- The other approach tends to give value by pre-screening a certain type of individual (re: niche apps) that may be “your type”.
Past the basic match-making model, what are people willing to pay for? It depends on the dating app model (example: Zoosk lets people connect on their own, while Match matches them directly), but there are countless ways apps make money in the name of love.
- The SaaS model for online dating is relatively simple: You pay to use the service until you no longer need or want it. Ranging from $10 (Badoo, Tinder) to 60 (Elite Singles, eHarmony) per month (for single-month subscriptions), sites like Match.com don’t have a free option. Interestingly enough, the quarterly subscription market is the strongest and is forecast to retain its strength moving forward. This is likely because many of the dating services have priced their premium subscription significantly more for a single month (example: Zoosk is $29.95 for a single month, which drops down to ~$20/month quarterly and $12.49/month with a 6-month plan) and it’s unlikely that users will be done with the service after 30 days.
Freemium and In-App Purchases
- In this pricing approach, the app or sites allow users to engage with a subset of features, but require payment for others. This also helps companies test and learn what their users find most useful, by seeing what they are willing to open up their wallets to. This approach tends to tie nicely with dating apps, which are highly influenced by network effects. With freemium, apps can focus on growing a solid user base and brand, before pivoting to focus on profit. This doesn’t always work, but has for Tinder, which has some 3m worldwide premium users and recently earned the title of the highest grossing non-game app in the world — beating out Netflix. Badoo also functions off of a credit system which allows users an alternative to the premium subscription model.
Across the premium models, these are the following features pop up frequently:
- Unlimited photos
- See profile views
- No ads
- Browse incognito
- Promoted profile
- Buy gifts
- Read receipts
- Additional filters
Advertisements and Data
- Many dating apps also rely on native advertising to bring in the bucks, like Grindr Ads, which is a self-serve platform similar to something like Facebook or Twitter, allowing you to directly control targeting.
- The “unfortunate for you, but fortunate for them” reality of online dating apps is that they acquire so much data about their users, which in many cases are in the millions. With data being the new “oil” and in an age where social media giants are deemed some of the most powerful entities in the world, dating engines have the ability to access, analyze, and potentially sell an incredible amount of data.
- In good news, dating apps have been largely moving away from ads and instead focusing on premium pricing models. Match group, for example, only earned $53m of its $1.7B in 2018 revenue from “outside sources”.
- Companies are pivoting to launch horizontal business units, which tie directly into the core value offering of supported courtship. A good parallel is the approach Airbnb is taking with Experiences, regardless of how well it’s working for them. Experiences like Match Dining justify the service by stating that Brits spend on average £60 on food and drink each date.
- Niche down: Not all niches are equal. However, when you find the right niche, which is at the intersection of what people really care about, you can quickly develop a loyal following. OurTime, the app which targets singles aged 50+, has over 800k people searching for it every single month. The equation is relatively simple: what is something that a non-trivial group of people care about? Gluten-free singles? Star Trek fanatics? Inmate pen pals? Not all of these will pan out, likely due to network size, but as in the case of OurTime, finding the right niche can be extremely effective.
- Love languages: Badoo is less widely adorned in North America, but has managed to develop a user-base (~455m) many times that of Tinder (~50m) by developing a more global focus from the get-go. It gets over 220m brand searches every month, according to Keywords Everywhere. By comparison, Tinder gets 11m.
- More data: Premium features give people more “at bats” by promoting their profile or by giving them access to those already interested. But what if premium features used data to teach users how to be more effective on the platform? X% of potential love interests swiped away after your 4th picture (that one of you flexing in the bathroom mirror…). Perhaps some suitors would prefer not to know, but you can imagine a new wormhole of potential external interference that is already happening.
- Genomics: The intersection of dat-ing and dat-a is exciting, but can also run a fine line. With some apps already targeting based on ethnicity or religious preference, it is not a wild extension to imagine people uploading their genetic information as a filter for potential suitors.
- Experiences: The founder of Coffee Meets Bagel recognized that the $3B online dating market isn’t very large, considering the number of people using the services. However, Dawoon Kang found opportunity in recognizing that the average American spends $1,500 going on dates. If companies can target the cross-section between pairing individuals and the dates they go on, there can be a lot more money to be made.