In an era where dating has become a costly affair, the pursuit of love on mobile devices is becoming even pricier as dating apps explore higher tiers of service and additional perks to boost revenue. In a market that has become increasingly competitive and is experiencing a growth slowdown, platforms like Tinder are examining the limits of how much users are willing to pay in their quest for a partner.
Dating apps have reshaped courtship over the past decade, evolving into a multibillion-dollar industry where consumers globally spent over $5 billion last year, as reported by app market researchers data.ai.
Match Group, a $9.9 billion company that owns 45 dating brands including Tinder and Hinge, responded to the growth challenges by raising prices and introducing new subscription levels across its major platforms in 2023. The company hopes that by charging users more, it can counteract the decline in revenue growth and bolster its struggling share price.
In September, Match Group introduced a controversial $499-a-month Select subscription on Tinder, accessible to just 1 percent of the app’s users. This subscription promised “unrivalled access to the absolute best of Tinder” for the most “sought-after profiles.” Despite a 6 percent year-on-year drop in Tinder’s customer base to 10.4 million in the third quarter of 2023, attributed mainly to US price optimizations, higher charges led to a 10 percent year-on-year increase in Tinder’s overall revenue to $508 million in the three months to September.
Gary Swidler, Match Group’s Chief Financial Officer, emphasized that Tinder has implemented a comprehensive pricing strategy, stating, “We’re not focused on a specific key performance indicator, whether it’s payers or revenue per payer. We want to maximize overall revenue.” This shift comes as Match Group grapples with a sales growth slowdown and a decline in the number of paid users, prompting a revision of its fourth-quarter revenue expectations from $890 million to a range between $855 million and $865 million in November. The company’s shares remain approximately 63 percent below their listing price in 2020 after a challenging tech stock rout last year.
