From Andrea McGinty, Dating Coach: I posted this link simply for information reasons for Tinder and The League users. Many sign up for The League without knowing the costs.
Financial analysts are estimating Tinder’s revenue grew only single-digits last year, down from 43% growth four years ago
By Laura Forman
Jan. 24, 2023 7:00 am ETQueue
The dating giant will be launching a new premium tier for its relationship app Hinge this quarter, a spokesperson for Match confirmed to The Wall Street Journal on Monday. The spokesperson also confirmed Match is testing subscribers’ interest in a new superpremium tier for its most popular dating app, Tinder. Bloomberg reported last week the new Hinge subscription, dubbed “HingeX,” would run as much as $60 a month, while the new Tinder subscription could cost a whopping $500 a month.
Such prices are high but not unprecedented. Subscribers of The League, an exclusive dating app Match bought last year, can pay nearly $1,000 for one week of its best features. Perhaps it is The League’s success that is giving Match hope that users of its other apps can and will pay up.
Dating apps’ ubiquity is becoming a problem in investors’ eyes. As the world’s largest dating app, Match’s Tinder is perhaps the highest profile example of an app working to rekindle new interest amid slowing growth: Financial analysts are estimating Tinder’s revenue grew only single-digits last year, down from 43% growth in 2019.
Will ultrahigh prices work? JPMorgan estimates a low-single-digit percentage of The League’s users pay for a subscription. More than 11 million people are paying for Tinder in some form, and JPMorgan estimates about 15% of its subscribers are paying for its highest priced subscription tier, which costs just under $30 for one month. Converting even 1% of Tinder’s highest paying subscribers today to a new ultra-premium tier, then, could yield about $100 million in incremental annual revenue.
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JPMorgan analyst Cory Carpenter isn’t even comfortable baking half that figure into his model, noting that a price point of $500 a month may never come to fruition. Then again, he also wrote in a note last week he wouldn’t necessarily discount the potential for success with a higher priced tier, given Match has long touted “the whale dynamic” in its user base.
Third-party data estimate The League has only a few hundred thousand users, most of whom aren’t paying for use of the app. Known by many as “elitist,” The League requires dating hopefuls to apply, tending to attract users with high-paying jobs and degrees from top colleges. Tinder, which generally caters to a younger demographic, including a lot of college-aged young adults, has a very different base.
Whether or not a superpremium Tinder tier pans out, Match seems wedded to its new Hinge offering. The company said on its third-quarter conference call that the new Hinge tier would be an opportunity to drive revenue per payer for the app “meaningfully higher.” It also said its forecast for 5% to 10% overall top-line growth for this year was in part predicated upon Hinge’s new tier delivering.
Premium-priced tiers have historically been popular. Match has said in the past that the majority of its Tinder subscribers opt for a higher priced tier. Similarly, OkCupid, another Match brand, says on its website that nearly three-quarters of its paying members opt for its premium tier.
But prices for these subscriptions have been nowhere near those Match is now noodling. You can get a Tinder Platinum subscription for as low as about $10 a month if you commit to a year of paid use. Bumble‘s highest premium tier is a little more pricey, but a one-time fee of a few hundred dollars will get you “lifetime” access to its premium features.
Match is hardly the only online dating company pushing new monetization strategies. Gay dating app Grindr, which recently went public via a merger with a special purchase acquisition company, has been adding more a-la-carte features such as “Boost,” which puts a user at or near the top of its grid of nearby users for an hour.
A-la-carte features might make more sense for Match, especially at higher price points. Match itself said at an investor conference last month that users of Tinder and Hinge increasingly like paying for a-la-carte features, adding that those features had grown to be about 25% to 30% or more of consumer revenue for those apps.
The fact that The League is still so niche suggests there is a clear ceiling on how much most users are willing to pay for a better match
With a stable of around two dozen dating apps, Match, at least, has a lot going for it. But with shares down 55% over the past year, a little “boost” certainly wouldn’t hurt.
Write to Laura Forman at firstname.lastname@example.org