Online dating was always popular, but it became more popular during the pandemic to find the right partner. With dating apps like Tinder, OkCupid and Bumble, which can be mostly used for free, one might wonder how the revenue model of such a dating company works. Whitney Wolfe, CEO of Bumble, became the youngest self-made billionaire, excluding Kylie Jenner, which indicates that these dating apps have a huge revenue source but when they are mostly available for free, how can one make the worth of a company $8 billion? Additional figures that need to be noted are that in 2020 itself, Match.com had revenue of $2.4 billion, while Tinder had revenue of $1.4 billion.
Firstly, it needs to be noted that for a dating app or website to function, it needs to have people and there needs to be plenty of people in it. Without the human resource in it, no one would have anyone to talk to. Therefore, the most important resource of dating companies is their users. Once, the users start using a dating app or website to change their Love Status, it becomes easier to mine the money. Even though there are multiple ways to earn money, for a profitable dating company, at least two to three sources are present.
Subscription Plans: The Core Of Earning Money
Almost all the dating apps allow free profile creation of the users. The trick to mint money from the free users lies in converting these free users into paying subscriptions. As a result, many dating companies limit the daily usage of their apps for free users. For instance, swipes permitted for free users is approximately 25 for Tinder and 35-50 for Bumble. Once the user exhausts their free swipes, with the disappointment of not being able to swipe more, one can opt for the premium subscription. However, the conversion from free users to premium ones, require an Attitude Status change from the customer to be willing to spend more money for finding their perfect partner. To make the premium subscription more lucrative, at least two premium subscriptions are available with detailed advantages. Even though one might think that who would spend money on a premium subscription, the truth is that people do spend money on it and the figures of the revenue of different dating companies are proof of it.
Ads and Affiliate Networks
Affiliate networks play a huge role in the entire monetization process of dating companies. The ads and affiliate network involved include both Cost Per Action and Cost Per Click. The freemium plans of most of the dating apps show the users some sort of advertisement on the basis of their affiliates networks. This works in a two-way process, the user gets to buy something that they are looking forward to while the dating company also generates revenue.
In-App Purchases
Like many other apps present in an app store, even dating apps support in-app purchases. These in-app purchases provide one of the easiest ways to earn some extra bucks.
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It is one of the most prominent ways of earning money through dating applications for their services. As the number of users increases in any dating platform, the users become target consumers for various brands. Working with other brands, the dating companies promote either their products or services. The brand promotions also keep the money rolling.
Not one of these sources is enough to make the company extremely profitable. An amalgamation of all the monetization strategies is required to ensure the success of any dating app or website making it profitable. Scalability plays a huge role in such a scenario. The only major limitation that the dating apps face is that once a user finds their match, they withdraw themselves from the platform. Therefore, it becomes of utmost importance to keep the platform evolving and gather new users. If the monetization strategies are broadly categorized, they fall under three umbrella categories: subscription plans, advertising and single purchase. Out of all the three, subscription is the major source of revenue, followed by advertisements. These monetization strategies work together to build profitable companies like Bumble and Tinder. However, no matter what monetization strategy is used, user engagement plays a huge role in the entire success of any dating company.
Source: Business Diary Philippines
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