Match Group Looks to Hinge as Rising Star
Contributed by: kellyseal on Wednesday, May 29 2024 @ 01:09 pm
Last modified on Wednesday, May 29 2024 @ 01:23 pm
Match Group announced in its first quarter earnings report that Tinder’s paying users were down for the sixth quarter in a row, but Hinge’s paying users continue to rise.
According to Tech Crunch, Hinge has seen a whopping 31 percent increase in paying users year over year, now up to 1.4 million. This is far less than Tinder’s 10 million paying users, but as Tinder continues on its downward trend, its paying users dropping 9 percent from this time last year, Hinge offers a beacon of hope.
Dating apps in general have struggled in the last year, and companies like Match Group and Bumble have been trying to address it with more exciting paid features and additional security protocols, like Verification on Tinder. However, dating app users continue to drop their subscriptions and opt not to pay for features, especially younger users who are turning to free platforms like social media apps to connect.
Hinge however is a standout, gaining more paying users. According to Tech Crunch[*1] , it could be because Hinge offers a more serious platform for daters looking for long-term relationships. But it could be because Hinge is more streamlined with its a la carte paid features, offering only two options: Boosts and Roses (compared with Tinder’s many optional paid features).
Another reason could be that people are less likely to pay for additional features when it seems too many options cost money. In fact, A la carte revenue only accounts for 20 percent of Tinder’s overall revenue, and ALC revenue decreased by 13 percent in Q1. In fact, a la carte revenue has been steadily dropping since 2018.
Hinge has seen revenue increase substantially in the last six years, with direct revenue growing to $124 million in Q1, 50 percent higher than this time last year. Hinge’s revenue for 2023 was $396 million, according to Tech Crunch.
Match Group CEO Bernard Kim said on the earnings call that Hinge is on track to become a “$1 billion revenue business.”
But the market may not be convinced this is enough for the dating app company. Match Group CFO Gary Swidler noted on the earnings call that they will introduce new a la carte features on Tinder “at affordable price points” going forward.
“We believe the decline in ALC revenue stems from user declines and lower average purchase volumes, in part due to weaker consumer discretionary spending among its younger user base, among other reasons,” Swidler said on the call, according to Tech Crunch.