Memberships

Dating apps like Tinder have taken the dating world by storm – and some argue have rendered traditional online dating a thing of the past. While sites like Match.com and eHarmony offer matches based on preferences and compatibility, Tinder offers the ability to look at a photo and instantly decide whether or not you’re interested.

In a recent article in Business Insider, eHarmony’s Vice President of Brand Marketing Grant Langston looked at Tinder’s success as a boost to his business. For instance, he’s seen a surge of new subscriptions since Tinder launched in Australia – 2.5 million members, up from 2 million the same time last year.

“The press [Tinder is] receiving is bringing lots of people to the online dating world, including people that find Tinder isn’t the right choice for them,” Langston told Business Insider. “Globally, this trend has helped us tap into new markets and led to an increase in our membership numbers.”

But why are more people choosing eHarmony when Tinder seems to be taking off? For one thing, Langston argues that people who would have never joined an online dating site before find it a little easier to start when they use a dating app. It’s made online dating in general lose its stigma.

Langston also attributes the surge in subscriptions to the high quality matchmaking that is eHarmony’s business model, compared to Tinder’s superficial match-making process. With Tinder, choosing a match is entirely dependent on photos and a couple of sentences, which aren’t much better odds for finding love than meeting someone at a bar. There isn’t necessarily any kind of compatibility – aside from that initial physical attraction.

People who are matched on eHarmony however, are compatible in specific ways. Matches aren’t made via liking the same music or TV shows or someone’s photo, but based on similar dispositions and compatible personalities – which is a bit more complex and relational. Langston says that eHarmony’s matching creates a foundation for a relationship to start, where Tinder is more fleeting, intended for a hook-up. So when people are disappointed with the matches they are meeting through Tinder, they look to other more serious online dating options, which is when they gravitate to eHarmony.

Langston also noted that eHarmony’s growth in the past year has been due to young professionals ages 23-33 flocking to the site, looking for people who are more compatible whether or not they are looking to marry.

According to Langston, eHarmony owes much of its recent success to the fact that Tinder isn’t producing many serious relationships. Then again, it seems that despite the appeal of Tinder, people are looking for something deeper.

Just how crazy are single consumers for Tinder? And how much will they be willing to pay for the service?

The company is betting that certain features will be very valuable to Tinder users who have been requesting them since the service launched. So valuable that the company will be beta testing different price points in the UK, Germany and Brazil, with prices ranging from $.99 US to $4.99 to as high as $20.00 US for the premium version of the app, Tinder Plus.

Tinder Plus will roll out in these three markets first to determine how to proceed in other markets.

Sometimes, you want a little less judgment and a lot more acceptance when it comes to your rituals or habits – especially with the person you want to date. Dating websites like eHarmony might be great at matching people based on personality traits and long-term potential, but what if you like to relax in the evening with cocktails or some cannibas and are afraid your date just won’t get it?

This is where dating app My420Mate.com comes in. Instead of tiptoeing around the subject or hiding your habit, you can date other lovers of weed.

The new app – branding itself as a “lifestyle platform” - launched in spring, and the company is now working on its first major marketing campaign, which will include billboards in Los Angeles, San Diego, San Jose and Sacramento. My420Mate will also be debuting a new version in December.

Los Angeles marijuana entrepreneur Miguel Lozano teamed up with partner Jay Lindberg to launch the new app, noting a desire from users of traditional dating sites. Apparently in L.A., just as many daters were calling themselves “420-friendly” in their profiles as saying they liked long walks on the beach, according to local paper L.A. Weekly.

There are only 11,000 users to date, but there are also only a few states where it’s legal – including California, Colorado and Washington - and that’s where the app seems to be taking off.

Lozano is trying to steer clear of stereotyping users of his new app, although he does also see a marketing opportunity to group them together under their mutual appreciation of cannabis. “I was trying to change the stereotype of the average cannabis user," Lozano told L.A. Weekly. "Everyone uses the word stoner, but it's a lifestyle. There's a lot more to it than that. We have teachers, chefs, and computer techs who enjoy the benefits of marijuana."

Niche dating sites and apps aren’t new – many developers and companies have invested in sites that cater to a specific market – be it seniors, vegetarians, Republicans, or even cowboys/cowgirls. When people are looking for compatibility or even those who share a religious faith it’s easier to go to a specialty site than filtering people out from a large site like Tinder or OkCupid.

But will My420Mate take off as a dating app? It’s too soon to tell, and might be a little premature of its founders to bet on it being as popular as Tinder. Because of its illegal status in most states, people might want to avoid putting their profile on the site altogether.

At the end of 2012, dating site Hinge had recently launched and was overshadowed by the popularity of dating app Tinder. Unsure of how to proceed with less than $32,000 in the bank and only a few thousand users according to Business Insider, Hinge decided to bet big on the mobile platform.

"We made some business assumptions that turned out to be wrong," Hinge CEO and founder Justin McLeod told the news website. "We were like, 'This thing is running out of money, and we need to do something drastic."

In what seems to be a spur-of-the-moment business decision, McLeod and a couple of developers holed up for a few weeks and launched a mobile version of Hinge on February 7th of 2013. But the launch wasn't as smooth as expected - Apple at first rejected the app, which caused many sleepless night for McLeod and his company. They had planned a huge launch party in Washington DC where the app first launched, and until the morning of the launch party, there was no app available.

The launch party turned out to be a success, and more people signed up right after it than had signed up for the beta in all of 2012. It seemed Hinge struck a chord with users where Tinder left them feeling insecure - especially women. Hinge does not just match users based on location like Tinder does (which means a lot of random profiles get into the mix) - you only get matched through your circle of Facebook friends of friends, so everyone you meet on Hinge has some kind of link to your circle. This security has been particularly attractive to female dating app consumers.

McLeod is not about to sit still. He is grabbing a good portion of the dating app market share, and expects to compete heavily with Tinder for its core user base. But he's taking things one step at a time.

Instead of launching his app nationally, he has launched city by city, building up a solid user base based on demand before he moves into a new market. Also, potential Hinge users must be invited by current Hinge users - adding a level of exclusivity and security to the app.

Hinge is now one of New York's hottest startups. Although Tinder is much larger (it makes more matches per day than Hinge has in its entire history), McLeod's company is starting to steal some Tinder users. It has expanded to 20 cities including Los Angeles, San Francisco and Washington, D.C. It uses a waitlist to assess demand in other cities, then launches when a few thousand people have signed up.

"There is no shortage of companies that have tried to build what we've built," McLeod says to Business Insider. "But we're using the organic, city-by-city method, which I think is the biggest thing ... We're a utility to help users meet great people in the flesh as effectively as possible ...We want to be a house party that has a really good host."

Online dating sites like OkCupid and Plenty of Fish have had a free model for a long time, which has managed to expand their membership databases and make them tough contenders with paid sites such as Match.com and eHarmony. But now that free dating apps like Tinder have entered the picture and taken the dating world by storm, the paid dating sites have seen not only a decline in membership, but also in revenues.

Is online dating on its way out?

According to a recent article in The Economist, paid online dating sites have reason to worry. In the article, The Economist points out Cupid, who runs subscription-based dating websites such as Cupid.com, UniformDating.com, and LoveBeginsAt.com, announced a $4.9 million loss in the first 6 months of 2014, up 20% from last year. The number of members has dropped, too. At the end of 2012, Cupid’s sites had 113,000 paying members, but by June 2014, they had just 48,000.

While this is a disturbing trend for online dating sites like Cupid – which haven’t really taken off like other paid sites Match.com and eHarmony – it could weed out many contenders in the online dating market over the next couple of years. However in contrast to Cupid's earnings, eHarmony recently reported incredible subscriber growth and better earnings than they have seen in years, due to focusing on long-term relationships and technology that they market as extremely valuable for finding the “right” match.

But what about popular free dating apps and websites like Tinder and old-timer OkCupid? They have attracted users because of their easy set-up and accessibility. They have made online dating less intimidating, (although a little more sketchy according to some users). Are they responsible for the decline in companies like Cupid? 

Not necessarily. Even free apps and websites aren’t so free anymore.

There has been a shift for the free dating apps and online sites to offer “freemium” services – that is, additional features to the basic service but for a price. In the current online dating market, revenue growth needs to happen for investors to remain interested, and that means charging for services once the user base is built. Tinder recently announced that it will launch a premium paid service in early November, while the basic features of the app will still be free. OkCupid started with a freemium model a while ago, charging users who want to filter profiles according to user preferences, or to be able to review and see reviews of other members.

Still others like eHarmony are adding more personalized matchmaking services at a very high price – thousands per year – for those who want a relationship but would like someone else to do the heavy lifting. eHarmony has not reported numbers to see the success of this particular service.

So what does the future look like for online dating? One thing is for sure: free models likely won’t last forever.

At the recent Forbes Under 30 Summit in Philadelphia, Tinder cofounder Sean Rad made the surprise announcement that the company is launching a new premium service in early November. The upgrade will allow paying users more options beyond just swiping left and right.

This might make some Tinder fans uneasy. After all, the value of the app is in the sheer number of people using it. Will restricting certain new features to paying customers cause others to drop off and look for other cheaper alternatives for hooking up?

Not according to Rad. He says the premium service will include functions that Tinder users have long been asking for - including the ability to travel and use Tinder in multiple cities. Currently, you can only use the service locally, which means if you live in Los Angeles you can't look for hook-ups in New York.

But will people pay for this type of technology? Several hackers have taken advantage of Tinder's technology already and used it to create the very features users have been requesting and the premium Tinder will be offering - such as fooling the GPS-based technology into thinking you are in another city so you can scroll through profiles in multiple cities. Also, several hackers have come up with technology to "mass-like" profiles in mere seconds without having to manually scroll through, which is a very popular request from current Tinder users to increase their odds of a match.

And what about Tinder's current features - will new users have to start paying for basic services, or will some features be taken away to add to the new premium service? Rad says there will be no changes under the current free app, so users can rest a little easier. Forbes reported that people now swipe through 1.2 billion Tinder profiles a day, and that each day Tinder makes more than 15 million matches. The company needs to hang on to these users because its value is in the numbers. 

But Rad is trying to continue Tinder's growth, and that means it's time to add revenue - especially for investors like Barry Diller.  “We had to get our product and growth right first,” says Rad. “Revenue has always been on the road map.”

Forbes said the Tinder founder hinted at offering other types of services that go beyond dating, including features for travelers, though he didn't cite anything specific. Could we see a Tinder app that includes restaurant, car service, or hotel choices in the near future?

Clearly, Rad has big plans for his popular app. But we'll have to wait and see how the market (and their pocketbooks) respond. For more on this dating app you can read our Tinder review.