Contributed by: kellyseal on Monday, May 11 2020 @ 09:27 am
Last modified on Wednesday, May 24 2023 @ 11:54 am
As dating app usage spikes worldwide in the wake of the COVID-19 pandemic, dating app companies are examining whether this means revenue will increase, too. Match Group recently posted a memo to all of its users that while usage is up, new (and paying) subscribers are down in the countries most affected by the pandemic, including Italy, Spain and the UK.
According to Seeking Alpha, Match Group was leading the pack a year ago with revenue increasing year over year in the billion-dollar dating app industry. And now, across the globe its star dating app Tinder is seeing a spike in user activity. It reported a record 3 billion swipes in one day on March 29th. But revenue hasn’t increased along with it.
Match Group’s revenue is gathered in two ways – from advertising on its free platform, and for charging users for premium services on its tiered services – Tinder Plus and Tinder Gold. Users can also purchase in-app a la carte options for certain features like Passport, but right now, Tinder is offering this particular feature free for all users.
In a recent note to its users and posted on Match Group’s website, the company tried to temper the excitement of increased usage with the reality of fewer new paying subscribers:
While we have seen increases in engagement trends among younger users, we are seeing fewer new users joining our products. This impact is most pronounced among users over the age of 30 and varies by region, depending on the level of COVID-19 containment. In markets in Asia where containment has gone well, such as Japan and South Korea, our business has largely remained intact. In markets where containment efforts have been less successful and COVID-19 cases have meaningfully increased, new users signing up and the propensity to pay generally, have declined. In Europe, we've seen new subscriber declines of around 5% in aggregate since the crisis began, but in countries severely impacted by COVID-19, like Italy and Spain, we have seen more significant declines.
Match Group goes on to say that New York, which was most heavily affected by the virus, saw low double-digit declines in new subscribers, but the rest of the U.S., including California, that saw declines initially have recently shown an uptick in subscribers.
Match Group expects its Q1 results to be in the low end of the range they initially predicted, and expects Q2 revenue to fall short as well. However, the company stated that it will have year-over-year Q2 revenue growth despite the effects of the virus.
Match Group also shared that it will be integrating video chat features into its apps to help increase subscribers and potential revenue. The company has already rolled out a live streaming feature with Plenty of Fish and Twoo, and will be adding 1 on 1 video chatting to its Match app this month.
Match Group added: “We have offered video chat features in the past and seen low usage, but we think this time user behavior is likely to change more permanently.”
Match Group also acknowledged delaying some of their announced plans, such as marketing plans tied in with the 2020 Olympic Games (which have been pushed until next year), and the international launch of its popular series Swipe Night.