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Spark Networks Reports Second Quarter 2015 Financial Results

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Spark Networks, owner of a handful of niche dating sites like ChristianMingle.com, JDate.com, and BlackSingles.com, has released financial results for the second quarter ended June 30, 2015.

The company has good news to report, primarily centered around attempts to turnaround business after growth stalled for ChristainMingle and JDate. Highlights include:

  • Significant, double-digit improvement in win-back rates with key cohorts
  • Double-digit improvement on ChristianMingle TV spend efficiency
  • New communication platform driving increased user engagement
  • Subscriber base stabilized on both JDate and ChristianMingle in July versus June
  • Reiterating commitment to subscriber growth in Q4

Chief Executive Officer Michael Egan stated, "We are pleased to have made considerable progress toward transforming our business during the second quarter, and remain on track to return to sequential subscriber growth across both JDate and ChristianMingle by Q4.”

The expense reduction and improved efficiency program Spark Networks announced in 2014 is showing signs of success so far. Excluding direct marketing expenses, cost and expenses in the second quarter of 2015 were $7.1 million, a decrease of 20% compared to the year ago period. Direct marketing expenses in the second quarter of 2015 were $5.3 million, a decrease of 33% compared to the year ago period and a 12% decrease compared to the prior quarter.

On the downside, revenue in the second quarter of 2015 was $12.3 million, a decrease of 22% compared to the year ago period, and a 9% decrease from the prior quarter. The decreases were primarily driven by a loss in paying subscribers, particularly for the Christian and Jewish Networks segments.

Spark Networks plans to continue its “crawl, walk, run” strategy for the remainder of 2015. A re-design and re-architecture of the company's core websites is in the works. An updated JDate experience is expected in early Q4, followed by an updated ChristianMingle experience in the latter part of that quarter.

Other product improvements are in the works concurrently. An upgraded communication platform has dramatically increased users' interactions, and improved mobile offerings have also seen a positive response.

In addition to improving the product, Spark Networks is working hard to improve its marketing strategy. Changes have been made to the customer acquisition and retention programs with good results. The company has seen in excess of 10% efficiency gains with their ChristianMingle television marketing spend, and July 2015 generated more initial registrations on JDate than any month since the first quarter of 2014.

"It is important to note that this is just the start,” stated Michael Egan. “As we roll out new and refreshed products, and continue to enhance our operational capabilities, we expect to drive continued improvements in customer growth and retention.”

For more on Spark Networks 2 most popular dating services you can read our Christian Mingle review and our JDate review.

JDate sues JSwipe over Copyright Infringement

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Late last year, a lawsuit was discreetly filed by Spark’s popular niche dating website JDate against dating app JSwipe. According to Forbes who broke the story, JDate claimed that JSwipe was infringing on the company’s trademark “J” by using it in the name of their app.

JDate isn’t the only Jewish online dating website that caters to the Jewish community and uses the letter “J” in its offerings. There is also JCrush, JWed, JPeopleMeet, Jewish Café, and Jewcier to name a few. In fact, it seems difficult to name a niche dating app catering to the Jewish community without using the letter J. But there is more to the story, which potentially puts all online dating sites and apps in danger of patent infringement.

In the lawsuit, JDate also claims it owns the patent on software that “confidentially determines matches and notifies users of mutual matches in feelings and interests.” JSwipe is similar in its process to Tinder, which also notifies users when matches swipe right on their picture. This is in violation of JDate’s patent.

Why then has JDate not sued other websites or dating apps, since this is such a broad definition of matching that almost every dating app and website uses? Notifying users of potential matches is the bread and butter of online dating. Why not go after an app like Tinder?

The key might lie in the competition JSwipe presents, especially if it is gaining market share in the niche online dating space. According to the Forbes writer who broke the story, JSwipe’s founder David Yarus confidentially confessed the lawsuit to him, though he is forbidden from discussing details. Instead of accepting JDate’s acquisition offer (which he considered too low), he decided to fight the lawsuit rather than sell. (For all you fans of Silicon Valley on HBO, this sounds vaguely similar to Pied Piper’s plight as an up-and-comer in the tech world.)

But JDate might have a case against JSwipe. According to Forbe’s research into intellectual property law, the language used in JDate’s patent was registered in 1999, and it is broad – broad enough (as mentioned earlier) to cover most dating websites and apps on the market today – so they could essentially claim IP infringement over any other company in the space. According to analysts, this might be a move by JDate to acquire JSwipe for a steal. Chances are if they tried to sue Match or Tinder, those companies' lawyers would be able to fight and win. JSwipe is too small a player.

Using the letter “J” in a dating app or website is apparently less clear-cut in legal terms. JDate would have to find evidence that users confuse Jswipe with JDate, which means asking users to testify that they thought Jswipe was part of JDate, or somehow affiliated, which would be trickier and more time-consuming.

JSwipe is fighting back. They have set up a crowdfunding website and asked for Jewish lawyers to take them on pro bono. 

For more on the Spark Networks dating site, you can read our review of JDate.

Spark Networks Announces Plans To Reinvigorate JDate & ChristianMingle

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Spark Networks operates two of the best-known niche dating sites in the biz – JDate and ChristianMingle – but lately both brands have taken a hit. JDate's userbase has slowly been declining, while ChristianMingle saw an abrupt drop following a cut in advertising spending.

Now Spark Networks is making plans to implement a broad turnaround strategy. The strategy is divided into two action items: upgrade technology for both websites and redeploy advertising funds for ChristianMingle in a more intelligent manner.

To fully understand the need for a technological upgrade, you first have to appreciate how far Spark Networks has come. Its sites have used the same basic technology and design for the last seven years, a feat practically unheard of in the Internet Age. An update is long overdue.

Mobile versions of the sites are either already available or will be launched soon, and a revamping of site architecture is in progress. The latter project means making future adjustments to keep up with the changing times will be a much simpler matter.

Where marketing is concerned, JDate has little to worry about. The site is so well known that it spreads primarily by word of mouth, and about 90% of its revenue remains after accounting for direct expenses. ChristianMingle, on the other hand, has struggled to achieve the same notoriety despite having more overall users.

The new marketing strategy for ChristianMingle has multiple components. First, the site will focus on select urban centers rather than large nationwide campaigns. The company plans to partner with mega churches and Christian organizations to deepen their ties within communities.

Second, Spark will make changes to its internal emailing efforts. Email blasts sent to all users will be nixed in favor of highly targeted messages sent to the right consumer, at the right time.

Finally, Spark is looking to attract new users who don't consider faith the most important thing in their lives. The company plans to bring more humor into its advertising in hopes of appealing to an audience who doesn't consider Christianity to be as central to who they are. Unlocking this larger portion of the market should give Spark a dramatically larger pool of potential subscribers to draw from.

Plans farther down the line involve expanding revenue opportunities by providing products throughout the life-cycle of a relationship and beginning a fremium website aimed at younger users. Both could be serious boons to ChristianMingle's turnaround strategy, but for now they're on hold until Spark Networks executes its current goals.

Spark Networks Reports First Quarter 2015 Financial Results

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Spark Networks – owner of ChristianMingle.com, JDate.com, BlackSingles.com, and more – has released financial results for the first quarter of 2015.

Revenue in the first quarter of 2015 was $13.5 million, a decrease of 19% compared to the year ago period and a 5% decrease from the prior quarter. The decrease was primarily driven by a 25% drop in average paying subscribers, particularly in the Christian Networks segment.

Direct marketing expenses in the first quarter of 2015 were $6.1 million, a decrease of 47% compared to the year ago period and an 18% increase compared to the prior quarter. Much of the decrease resulted from a new marketing strategy for Christian Networks.

Spark Networks Reports Third Quarter 2014 Financial Results

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Spark Networks, owner of many special-interest online personals sites including ChristianMingle.com, JDate.com, and BlackSingles.com, has reported financial results for the third quarter ending on September 30, 2014.

It was a time of major transitions for the company. The majority of the Board was removed in July. The new Board was primarily focused on right-sizing the corporate cost structure and improving marketing efficiency, two goals which were, according to Executive Chairman Michael McConnell, largely accomplished. “Improved marketing efficiency at ChristianMingle drove subscriber acquisition costs ('SAC') in September that were less than subscriber lifetime value ('LTV') for the first time since January 2012,” he reports.

On the numbers front, Spark Networks presents the following highlights:

  • Contribution of $9.0 million, highest since Q1 2009
  • Adjusted EBITDA of $2.5 million, highest since Q1 2010
  • Average paying subscribers of 257,679, a sequential decline of 6%
  • Revenue of $15.0 million, a decrease of 14% compared to the year-ago period and a 5% decrease compared to the prior quarter

As you can see, it's a mixed bag. The drop in revenue was primarily driven by a 14% decrease in average paying subscribers, reflecting a year-over-year 15% and 9% decline in average paying subscribers for the Christian and Jewish Networks segments, respectively.

On the up side, direct marketing expenses in the third quarter of 2014 were down 52% compared to the year-ago period and 24% compared to the prior quarter. Contribution in the third quarter of 2014 was $9.0 million, an increase of 90% compared to the year-ago period and a 14% increase compared to the prior quarter. In both cases, Christian Networks was the primary driver (improved marketing efficiency and a better mix within the paying subscriber base, to be more specific).

Looking forward, McConnell says the company's primary objective is to improve product functions and features across all platforms. A JDate iPhone app was recently approved and a ChristianMingle app should be on its way soon. Spark Networks is also looking to leverage its presence in Israel and outsource some other development activities in order to speed up product development.

"In summary,” says McConnell, “much has been accomplished in the last several months, but much work remains. The team has embraced our future with a sense of urgency and focus. We look forward to driving changes that create a terrific experience for our customers and support the core communities we serve."

JDate Launches New iPhone App

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JDate, a popular dating website for Jewish singles, has launched a new mobile app for its members.

In the past couple of years mobile apps have taken off among daters, especially with the popularity of free and easy-to-use dating apps like Tinder, so traditional dating sites have had to step up their mobile game. After all, most people have their phones with them at all times and are able to log in anytime, anywhere, as opposed to their desktops.

Desktop dating is almost a thing of the past. Since it’s much easier to access phone apps, mobile dating apps tend to be stickier for users – attracting people to check in when they are waiting in line or for a friend to meet them, or just bored. The more often people are logging in, the more attractive it is to other potential users, which is what online dating companies want.

Enter JDate’s new app, which they describe as “a robust, on-the-go experience.” The features however are pretty standard, compared to what is already available via mobile dating apps. The big difference is their loyal user base – singles looking for relationships with similarly religious people.

Some of the new features include a better snapshot of each potential match. For each profile, you can easily see information such as location, religious preference (orthodox, reform, etc.), how well matched you are (0-100%), and from the same screen, you can choose to look at profile details, chat, email, or flirt with your match.

Photo access has improved, too. From the app, you can scroll through hundreds of photos of your matches (a la Tinder), as well as upload your own either from your phone, Instagram or Facebook.

Subscribers have the ability to chat instantly with other members who are either currently browsing the app or on the site from a desktop, and can hold multiple chats at once. They also have the ability to see who has favorited them or viewed their profile, and to see who is nearby via the “Members of the Tribe” feature.

The app also includes JDate’s popular “Secret Admirer” game, where a member can anonymously show interest in another member.

Reviews on the iTunes store have been mixed. Many users are happy with the results compared to apps of other traditional dating sites like Match and eHarmony because of JDate's easy-to-navigate format, but they are frustrated by the search capabilities as well as how long it took the company to make a well-formatted app.

JDate currently has over 750,000 members worldwide. To find out more about this service you can read our JDate review.