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Match Group/Tinder Idea Proposal

Match Group/Tinder Idea Proposal
 

Will Tinder’s premium subscribers deliver a revenue windfall for Match.com?

Report Available: April 27, 2016

 

Blueshift’s initial research found Match Group’s popular dating app Tinder driving revenue growth for the company, quickly becoming its star performer. Tinder recently introduced a premium subscription service and tiered pricing to further its position as the cash cow for MTCH. It also hired experienced executives and acquired a contact management app to help it extend beyond dating. At the same time, Tinder is faced with growing competition with their own unique offerings, some of which are still free to users.

 

Observations

  1. In February, MTCH reported its first quarterly earnings since striking out on its own from IAC/InterActiveCorp. The company, which owns dating sites Match.com, Tinder, OkCupid and others, showed a 12% increase in sales, though revenue fell short of analyst expectations. Average revenue per user fell to 53 cents from 62 cents a year ago. And while earnings were above consensus, they still trailed last year by 26%, due to increased spending on marketing and admin costs.
  2. Tinder is quickly becoming MTCH’s leading brand. It boasts 30 million active users who sift through other users, or “swipe,” 1.3 billion times per day. In the fourth quarter, MTCH had 30% year-to-year growth in average Paid Member Count (PMC), which it attributed predominantly to Tinder and recently-acquired PlentyOfFish, as its other businesses remained flat. Management stated it expects PMC to double for Tinder in 2016.
  3. A year ago, Tinder started charging its users a monthly subscription for Tinder Plus, a premium service giving users unlimited swipes, the ability to revisit previous swipes, and connect with people internationally. In March, Tinder established a two-tiered pricing structure where it charges users 30 years or older twice as much as those under 30 ($19.99 versus $9.99). Tinder will also begin limiting the number of people non-paying users can view.
  4. Tinder is aggressively expanding, hiring key executives to lead those efforts. It brought in a new CMO who was the SVP of Marketing at Starz Entertainment, a new VP of Engineering who held the same role at Yahoo!, a new VP of International who held a similar role at YouTube, and a new VP of Finance who held the same role at TigerText, a business messaging app. Tinder also just acquired Humin, a contact management phone app, which serves to establish its San Francisco office while also allowing Tinder to extend beyond dating.
  5. Competition in the dating app space is widespread, including free services which also have the “double opt-in” offering that Tinder pioneered, where users mutually agree to connect. Among them, Hinge is for users looking for more serious relationships, Bumble puts women in charge of making the first move and was started by a Tinder co-founder, and Coffee Meets Bagel now helps you choose the best photo for your profile.

 

Can Tinder double its Paid Member Count in 2016? What advertising revenue can it expect? How will users respond to Tinder Plus? How big of a threat are competitors? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Analytics companies, Ad buyers/planners, Competitors, and Industry specialists.

 

Companies: Match Group (MTCH)

 

Research Begins: April 11, 2016