The dating market has always been the most competitive among online services. The customers are picky, and it is hard to develop and retain an audience. Investors consider such startups too risky for infusing their funds.
Yet, the leading dating apps generate enormous revenue. Even during the pandemic, when most businesses struggled to survive, Tinder & Co profits continued to rise. What’s the secret? How to monetize a dating app even while providing a dating service for free?
Find out the most lucrative business models and the resulting experience of the TOP dating market players.
Global Dating App Monetization Prospects
Global statistics for dating services usage clearly show stable growth in both user base and revenue.
Online Dating App Users
Global Dating App Revenue
The lockdown with its limitations for social activities intensified this trend because self-isolation pushed people to use dating apps more heavily. A recent survey from Pollfish showed that 7 of 10 Americans would continue using services for online dating after the pandemic is over. Another curious fact is that users are ready to pay for the service:
How Much Money Did Americans Spent on Dating Apps in 2020? (Source: pollfish.com)
Most dating apps are available for free. A new user can create a profile and start looking for matches and send messages to people they like without paying anything. So, how do dating apps make money if they are mainly used for free? Soon, a user finds out that they have run out of free swipes, cannot start a video call with another user, cannot look for matches in another city, etc. All these limitations are put in the app to capitalize on its usage and generate revenue. A user engaged in the process is ready to spend some money to unlock those limitations and get additional options to enrich their online dating experience. It is a crucial concept in dating app monetization.
Dating App Revenue Models Based on Subscription
When preparing a new dating app to enter the market, think about the monetization model. The chosen strategy affects the development, as proper features and an admin interface are required to support it. It also defines how much money you can get from future users. That is why you should decide on this at the initial stage before the actual development starts. There are three major types of subscriptions that help make money on dating apps. You can choose from them.
Freemium implies using the primary app features for free while getting paid for additional options. It is a preferable monetization model for startup projects. Its main goals include:
- Spreading information about the product
- Attracting users to a new product
- Increasing the brand awareness
- Developing customer loyalty.
Most online dating apps work on a freemium model. For instance, Tinder has a ‘Tinder Plus’ subscription that gives access to special features, including unlimited swipes and the ability to find matches in multiple locations. Free users can look for matches only in one area and have up to 25 free swipes per day. There are more options unlocked in Tinder Plus and more paid plans available.
Another freemium model sample is Bumble. A free user can upgrade to Bumble Boost, unlocking a SuperSwipe feature that shows that a user is particularly interested in their match. Another benefit under Bumble Boost is the ‘SpotLight’ feature: users can put their profiles on the top of the list that brings more views.
Andrey Onopriyenko, KeyUA Chief Technology Officer, noticed that "The success of the freemium model depends on the right choice of features. The more value a user receives under a paid plan, the more likely they will renew payment for the next period. Nevertheless, dating websites make money on free users too by providing in-app purchases and displaying ads. This combination of revenue channels works well for the online dating industry."
While the freemium model implies unlocking some extra features, the membership model requires users to pay for using the application for a certain period. It means you won’t be able to access the app until you pay for it. A mandatory payment is a decisive threshold for most customers. As a result, there are significantly fewer fake profiles and fraud in such apps. This model can potentially develop greater trust in your product.
Membership dating websites make money by offering different pricing tiers, starting from a Basic plan with cheaper fees and proposing one or more premium membership programs at higher prices. As a rule, the longer the period paid for, the cheaper the monthly cost. For instance, subscribing to a 1-month basic plan from eHarmony will cost $59.95. Subscribing for a yearly basic plan will cost $239.40, which is only $19.95 per month.
The paid membership promises that the service will get revenue from every signed-up user. Compared to freemium apps, it gives lower user base growth, yet the audience is ‘more serious’ about dating.
You can combine both freemium or paid subscription models with a VIP membership. For a higher fee, a user can purchase a VIP status. Usually, VIP features have two directions:
- Boosting a user profile with various promotion tools
- Extending the system functionality with extra capabilities
Sometimes VIP plans imply more precise match generation, additional analytics upon the users’ activity, more options for privacy and anonymity. It all depends on the nature of the app. Offering VIP plans is usually how dating apps make money after becoming recognizable on the market. For instance, Tinder has released its VIP plans one by one since 2015. Tinder Plus, Tinder Gold, Tinder Platinum appeared in 2015, 2017, and 2020, respectively. It also helps product owners capitalize on technological updates and newly developed features, offering them at an additional price.
Building a well-thought revenue model can be challenging, as it requires in-depth research and business analysis. KeyUA marketing experts will be happy to assist your team in finding the most suitable monetization approach based on your dating app idea.
Revenue Channels Beyond Subscriptions
Subscriptions are not the only monetization way for a dating app product. Multiple additional revenue sources help monetize even free users. Here are the most popular approaches used today.
Online dating users are a target audience for multiple industries. Therefore, a dating app is a great ad space for numerous companies to promote their product and services. For example, restaurants, flower delivery services, jewelry stores, travel agencies, and many others benefit from high ad conversions from dating apps.
Dating apps earn money on ad views, clicks, or transactions depending on the offered ad models. There can be different types of advertisements, including banner ads, texts, context ads, video ads, surveys, etc. Most applications give users ad-free access on premium subscriptions, making ads visible only among free users.
It is similar to standard display advertising. As a dating app or website owner, you partner with affiliate networks instead of a specific product or service company. As an affiliate marketer, you need to create a compelling dating platform and attract a solid, consistent user base to sell ads. After this, you can join various affiliate networks to show their ads on your spaces. Basically, you earn from moving your app traffic to advertised websites or apps through the affiliate network.
You can provide some extra-paid options for users. Let them buy smileys, advanced formatting options for text messages, the ability to place gifs instead of plain images, etc. Many dating apps give the ability to buy some premium options for one-time use. For example, Bumble lets free members buy an option to extend a match for 24 hours once a day, while Bumble Boost subscribers can extend the match multiple times.
People like sending gifts to encourage their matches and express their feelings. You can charge for sending greeting cards, virtual flowers, candies, gift cards, and other virtual presents. This option is comparatively easy and cheap to implement while being a stable revenue generator within a dating app.
While it is not the best option now due to the pandemic, offline dating events could generate more earnings in the future. Arranging a party for app users is excellent for promoting your brand among target customers and increasing interest in your dating product. For example, the Tinder team used to arrange student parties in colleges and universities. Students had to install the application and perform other actions like finding a promo code to enter a party. Tinder increased its user base from 5k to 15k after a series of such parties at the very beginning. And it had a long-term effect, as word of mouth is highly effective in attracting more customers.
Like in many other businesses, diversification is the key to success. For a startup, it’s vital to find the right balance between using all possible channels to make money from a dating app and not annoying customers with the need to pay for every small option. User comfort is your guarantee for high loyalty to your brand, customer retention, and stable revenue.
Want to implement the right monetization approach for your online dating service? Consult KeyUA experts.Get In Touch
How do the Leading Dating Apps Make Money?
To show the dating app monetization theory in action, review how the world’s leading players manage to collect impressive revenue from year to year. Adopting these practices with up-to-date improvements will help you turn your dating product into a powerful profit generator.
How Does Tinder Make Money?
Tinder has generated $65 million in revenue on in-app purchases as of Jan 2021. It is the most prominent result among all dating apps globally. How do dating sites make money like that?
For the time being, Tinder has a stable audience of 6.7 million paid subscribers and 66 million users in total. Two primary revenue sources help monetize both free and paid subscribers. The top way that Tinder makes money is Tinder Plus, Tinder Gold, and Tinder Platinum subscriptions that are offered at different rates around the world. In the USA, it costs $9.99, $29.99, and $39.99 per month, respectively.
Tinder Paid Subscription Features (Source: tinder.com)
The average revenue per paid user is $33.66. Tinder users appraise premium capabilities and are ready to upgrade for more expensive plans. However, the statistics for the total Tinder revenue is significantly more impressive:
Tinder Annual Revenue 2015 - 2020
To make money from free users, the company uses in-app advertisements. There are different ad forms and placements: some ads appear on the match list when swiping left or right. There are also direct ad messages in user’s inboxes.
How Does Bumble Make Money?
Bumble is the world’s second-biggest dating application and goes far beyond dating. The app is available in three modes:
- Bumble Date: more or less Tinder-like dating service
- Bumble BFF: a service for meeting new friends
- Bumble Buzz: a service for professional networking
As for dating, Bumble gives exclusive female empowerment: in heterosexual matches, only a woman can initiate a conversation with her partner. This approach has gained tremendous popularity. See how the app’s revenue has grown over the past years:
Bumble Revenue 2017-2021 (Source: bumble.com)
In 2020 the service made $360.5 million in revenues. Bumble makes money using three strategies:
- Freemium model
- Paid subscription (Bumble Boost).
- In-app purchases for advanced features
It is a free dating app to download and use its primary features, like matchmaking and messaging. You can switch between Date, BFF, and Buzz modes and even have different accounts for each. Bumble Coins is also an in-app currency for purchasing additional features like ‘Spotlight’ or “SuperSwiping.” Its premium plan, Bumble Boost, costs $14.99, $29.99, and $47.99 for 1, 3, and 6 months, respectively.
Bumble’s average revenue per paying user is $27.75, while the total revenue for in-app purchases was $190,756 million in 2020, according to Statista.
How Does Hinge Make Money?
Hinge is one of the main Tinder competitors with a slightly different mission. Positioning itself as a service for serious relationships instead of hookups has a slogan “Designed to be deleted.” Assuming that its potential users are serious about their intentions, Hinge makes money on a freemium model. It is free to download and use. The free subscription has certain limitations that are unlocked with a Preferred Membership subscription. The paid option includes the following:
- Unlimited likes
- Ability to see who liked you
- Additional filtering options for a detailed match selection.
Preferred Membership is available on one month, 3 months, and 6 months plans that cost $9.99, $20.97, and $29.94, respectively. As of 2020, Hinge had 400,000 paying users, 6 million active users per month.
Dating apps are paid for an easy-to-use, safe and fun service. To stand out in a good sense, you should offer a unique, up-to-date user experience. Find out how to create a dating app that can compete in today’s market.
A dating application can be monetized in countless ways. These products have revolutionized the dating industry: mobile applications have become the most convenient way to find a partner. In the long term, an application needs to be flexible to adapt to various monetization strategies according to its level of recognition.
To be successful, an online dating startup needs to be a high-quality application, easy and fun to use, with a powerful marketing strategy to promote it and generate revenue effectively. The KeyUA team is ready to assist in all these aspects. Fuel your startup with specialists in programming, design, and online marketing!
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