The online dating market is worth more than $7.5 billion and is expected to double by the end of this decade. Moreover, you can estimate the exponential growth of online dating because it is estimated that by 2031, more than 50% of internet users will meet their partners through online dating apps.
Irrespective of what kind of dating apps you consider, whether it’s the traditional matrimony site, casual dating app, or even the Best Hookup Site, all these platforms use similar business models to generate revenue.
In this article, you will understand how these dating businesses make money. This knowledge will help you decide whether or not you should consider investing in the online dating business in 2023.
How do Online Dating Companies Generate Revenue?
As Shakespeare once stated, the path of true love seldom runs smoothly. The fact that over 8,000 dating platforms are dedicated to bringing people together demonstrates that — even now, in 2022, with the most sophisticated pairing algorithms – finding a companion remains challenging.
However, while most dating app users are looking for that special one, the chief marketing officers of these services must attract tens of millions. And similar to other network-based businesses, dating sites face a dilemma: expand the network or boost revenue.
Swiping on Tinder, Bumble, and Hinge has increased over the last year, with a 12% increase in usage for the top dating websites. Tinder is constantly in the top ten highest-grossing applications month after month, while Bumble cracked the top ten multiple times last year.
While the marketing team of such apps uses sophisticated algorithms and designs to attract millions of users, in this article, we will decode the four major ways that dating platforms use to generate revenue:
1. ”Freemium” Subscription Plans
Swiping on Tinder, Bumble, and Hinge has increased over the last year, with a 12% increase in usage for the top dating websites. Tinder is constantly in the top ten highest-grossing applications month after month, while Bumble cracked the top ten multiple times last year.
Because almost every dating app allows you to create a profile for free, you’re surely aware that premium subscription options are part of the solution.
The essence of the dating app business is converting free users into paid subscribers. Non-paying Tinder users get about 25 swipes every day. Bumble has an unclear daily cap that appears to be between 30 and 50 dollars. On Hinge, you receive an 8-10.
The idea is that after users have exhausted their daily swipes for a few days or weeks, they would become disheartened and pay for premium features that increase their likelihood of finding a match.
2. Subscriptions are Typical for Elite Apps
Bumble and Tinder would not have become as prevalent and profitable if their generic offerings had not been free. This isn’t an issue for elite, members-only dating apps like Raya and The Lox Club, which wish to keep ”ordinary” people out. If you manage to ever get past their infamous queuing theory, these apps levy monthly subscription fees, much like a private club or secret group.
Annual membership in the Lox Club costs $96, 6 months for $60, or $36 quarterly. Raya, where stars such as John Mayer and Channing Tatum are rumored to have accounts, costs $8.99 monthly.
3. Advertising and brand partnerships
Marketing and advertising — the soul of Snapchat and Instagram — currently accounts for a minor portion of the dating app economy. When it comes to Bumble’s revenue, the figure is 3%. While ”No advertisements” is a Tinder Gold feature, advertising only accounts for a ”tiny portion” of their income.
Tinder occasionally promotes products, TV series, or organizations (in the past, Amnesty International, Domino’s Pizza, and Suits The Mindy Project) through sponsored accounts that users can swipe on. Despite Tinder and Bumble’s lack of commercials, they’re enough for Hinge to attempt to differentiate itself by pledging no in-app ads (though they keep the door open for ”brand partnerships”).
4. One-Time Purchases
Like a game, people purchase additional ammo, weapons, lives, and even major in-app currencies to aid them in their online dating quest. Many of the paid-for features are also offered as one-time buys. On Tinder, which generates 30% of its business from à la carte transactions, you may purchase bundles of SuperLikes and Tinder, Boosts as if they were collectible playing cards.
Bumble chose to employ Bumble Coins as its in-app currency, which costs $1.99 a unit and can be used to buy the app’s added benefits like SuperSwipes and Spotlights. A ”Rose” is Hinge’s version of a SuperLike/SuperSwipe. Everyone receives one free rose per week, which can be purchased for $3.99 each.
To sum up, online dating companies make money by getting people to sign up for memberships, and then keeping them as paying members for as long as possible.