Dating apps are causing swipe fatigue. So, people are finding love elsewhere.
Dating preferences are changing, & people are ditching dating apps to find love on Strava, Duolingo, Reddit, & Discord. But dating apps continue to raise prices as their stocks suffer in 2023.
«The 2-minute version»
Online dating apps seem to have lost their shine, and users are convinced that there are greener pastures elsewhere on the internet.
But first, a little background: As most dating apps mushroomed in the last decade, they adopted the freemium business model, an app concept that was borrowed from popular gaming apps such as Candy Crush and Clash of Titans. Then, in 2017, Tinder paywalled some of their most popular features, one of which was the ability to see who swiped “right” on their profile. This was enough to propel Tinder to the top-grossing iOS app in 2017.
And then: The pandemic hit when people really pushed the limits of what they could do with the internet.
Along came the ingenious hacks: Turns out, there were apps all over the internet where anyone could review another person’s passions and interests, be it learning languages, reviewing food, hiking trails, or playing video games. Apps like Duolingo, Strava, or Yelp provide anyone with the other person’s history of genuine passion and interest in mutual subjects.
It doesn’t stop there: Plus, many users flocked to microblogging sites such as Reddit and Discord, where users can check each other's threads to look for mutual interests and passions & connect via sub-threads. The r/r4r is one such Reddit thread that boasts over 700k members.
Plus it looks like dating preferences are changing: Today, most college students are entirely forgoing dating apps in favor of hooking up through in-person connections. As per the study, factors such as beliefs, passions, and a sense of humor mattered at least 4 times more than looks, quite contrary to how Tinder’s matching algorithm works.
Meanwhile, dating apps are not budging: Did you know that Tinder launched a $500 PER MONTH plan and The League launched their own $1000 PER WEEK VIP plan, which is followed by Hinge, which charges $60 per month, with Bumble soon to follow in a similar price range?
On Wall Street: While Match Group CEO said that purchases from their “power users” remain strong, overall app downloads for Match Group have been stalling. Bumble is also facing a similar problem. This could be one of the reasons why dating app stocks severely underperformed the S&P 500 and the Nasdaq 100 in 2023.
Last week, on Friday5,
wrote about how people were ditching dating apps to find love on Strava and Duolingo. A couple of days later, we decided to dive deeper into the topic and the dating industry to find out what was really happening. As we labored through hours and hours of data and read online forums, something became quite clear to us—online dating is turning into a barren wasteland for now. Or at least, that's what the youth tend to think nowadays.For over a decade, Tinder gamified the concept of discovering people to date in a way that was fun and less awkward. The success of Tinder gave birth to more dating apps like Bumble, Badoo, and Hinge, which led to a surge of users flooding new-age dating apps, with millennials mostly leading the charge.
But online dating apps seem to have lost their shine, with users convinced that there are greener pastures elsewhere on the internet.
The internet is full of strange places to find love. Sometimes even for free.
Let’s start with the concept of ‘free-for-all’. When most dating apps mushroomed in the last decade, they adopted the freemium business model, an app concept that was borrowed from the world of popular gaming apps such as Candy Crush and Clash of Titans. Under the freemium model, users could set up their profiles, find out who liked their profiles, get read receipts for DMs, and more. But in order to unlock more features, users would have to pay up.
Then, in 2017, Tinder mustered the courage to paywall some of their most popular features, one of them being the ability to see who swiped “right” on their profile. This was enough to propel Tinder to the top-grossing iOS app in 2017.
As time went by and the popularity of these apps rose, users would find that more features were being pushed behind paywalls. Then came the pandemic, when people really pushed the limits of what they could do with the internet.
Turns out, there were apps all over the internet where anyone could review anyone’s passions and interests, be it learning languages, reviewing food, hiking trails on weekends, or playing video games. In all of these cases, users did not need to fill out those boring dating bios about what their passions and interests were. App platforms like Duolingo, Strava, or Yelp provided anyone with the other person’s history of genuine passion and interest in mutual subjects.
One of our readers
had some profound wisdom to share with us last week on this topic:“I think we'll see a lot of people looking for ways to manage information quality more broadly given the flood of content that is unreliable and often manipulative in intent. It increases the value of trusted and evidence-based sources. Interest focused apps are harder to fake (or at least a LOT of work to do so.) Activity maps on Strava is a pretty clear validation of an interest in running, biking, hiking etc., not just something that sounds good on a bio”.
Dating preferences have changed. College students seem to be steering clear of dating apps altogether.
The pandemic changed many user preferences and business models overnight. Some were meant to stay, and some could easily be seen as temporary transitions. But few could have guessed that the younger population’s dating preferences would shift towards steering clear of dating apps altogether.
A recent study conducted for Axios showed that most college students were entirely forgoing dating apps in favor of hooking up through in-person connections. Many of them are already on Snapchat and have used the popular social app to hook up with someone in their extended network.
The study conclusively showed that college students increasingly prefer the experiential path towards discovering their partner. Factors such as beliefs, passions and sense of humor mattered at least four times more than looks, quite contrary to how Tinder’s matching algorithm works.
In fact, documentaries such as The Tinder Swindler show some anecdotal evidence as to why users may be done with flashy profiles that reek of fancy Lamborghinis or swanky hotel suites. They are in search of genuine hookups and bona fide pursuits of love based on mutual interest regardless of whether it eventually works out for either of the partners.
Since today’s online dating apps don’t get this, many single people have taken matters into their own hands. They have resorted to finding cheap, relatively-free, but ingenuous ways to hook up. Their efforts have turned into an underground revolution, with users flocking to microblogging sites such as Reddit and Discord. The r/r4r Reddit thread boasts over 700k members and is counted among the Top 200 threads on Reddit, where fellow Redditors can check each other’s threads and post history to look for any signs of mutual interests and interesting passions and connect via sub-threads. There are threads such as r/ForeverAloneDating or other threads like r/cuddlebuddies. And if this is not enough, there are endless Discord chat servers where it’s apparently easier to hook up rather than paying exorbitant fees for dating app subscriptions.
At the same time, Y2K era dating trends like speed dating have also made a comeback, attracting people who are done with online dating apps but are not part of any of the microblogging sites mentioned earlier.
But dating apps aren’t budging. Instead, they’re raising prices.
Dating apps had already started to raise prices or push more features behind their paywalls well before the pandemic. At that time, users were hesitant but still convinced to pay for the value provided by the dating apps.
In 2018, Statista published the results of this survey, which tried to capture user’s willingness to pay for premium fees for dating apps in the USA. Almost 60% of all female respondents and 41% of all male respondents in the survey indicated that they would not want to pay up for premium dating services. Meanwhile, just 6% of all female respondents and 19% of all male respondents said that they currently pay for premium fees for dating apps.
Meanwhile, I combed through all the dating apps' price menus and came to one conclusion - the pricing for dating app subscriptions is obscure and opaque. The apps have made it very difficult for anyone to know how much a user is expected to pay upfront. The apps require the user to divulge private information such as gender and age to provide some form of accurate pricing. These kinds of predatory pricing mechanisms have often gotten Tinder into legal hot water with regulatory authorities, although Tinder has since discontinued this pricing model.
Earlier this year, Morgan Stanley conducted a study that suggested that users were paying close to $19 USD per month on average for subscriptions to their favorite dating apps. Compared to the prices of the rest of the subscription services that Americans pay for, $19 USD a month is expensive.
Still, many dating apps have introduced ultra-premium plans this year, suggesting there is still is a demographic of users willing to pay top dollar to access premium features on the app. While Match Group-owned Tinder launched a $500 PER MONTH plan, another lesser-known Match Group subsidiary, The League, launched its own $1000 PER WEEK VIP plan, whereas Hinge launched its $60 per month plan, with Bumble soon to follow in a similar price range.
A separate study by Pew Research Center reveals that most of these ‘power users’ (as Match Group’s CEO likes to call them) are at least 30 years or more, if not 50+, and are in their middle-to-upper income wage brackets.
For now, most dating apps seem to have adopted similar playbooks from one another by raising prices and introducing higher premium tiers. Their hope is that these power users will keep paying up or, even better, upgrade to higher subscription tiers, thus lifting the Average Revenue Per User (ARPU) that most app companies love to gloat about.
Wall Street isn’t convinced about the dating ecosystem’s pricing strategies.
Last year, in an earnings call with investors, Bernard Kim, the new CEO of Match Group, said that “purchases from our power users still remain very strong.” He also mentioned that they were continuing to see strong subscriptions and that the subscribers remained very sticky.
It became quite clear that Match was focused on trying to increase ARPU while keeping costs down because their app downloads, a critical business metric for Match Group, were stalling. The same can be seen for Bumble App, which also saw its app downloads flatline after October 2022, as seen below.
This could have been one of the reasons that caused concern among many investors, causing steep sell-offs in both these stocks despite the S&P500 index and the tech-heavy Nasdaq100 index having a very good year.
Although, a few Wall Street Analysts think otherwise
Recently, a couple of market analysts have shown some solidarity with both Match and Bumble by upgrading both the stocks. While Wells Fargo simply stated that they remain optimistic about Bumble’s “app growth”, analysts at Bank of America appeared to be confident in Match Group’s Tinder growth.
Both Bumble BMBL 0.00%↑ and Match Group MTCH 0.00%↑ have seen changes in their respective CEO’s - Lidiane Jones joins Bumble from Slack, whereas Bernard Kim brings his decade+ experience of running gaming companies to Match.
Final Thoughts
Dating apps were once seen as a way to quickly fix the messy world of hooking up by making it fun and easy to discover love. Unfortunately, the swipe culture is increasingly creating disillusionment in today’s users by underserving them, paywalling more features than it adds, and raising prices beyond people’s means.
Fortunately, the culture of dating will continue to rapidly evolve as it has over many decades, even if it means that people fall back to their roots and rely on human connections aided by meaningful technological experiences.
What are your thoughts on finding love on dating apps vs. IRL, microblogging sites or other apps such as Strava, Duolingo and Yelp? Are you currently on a dating app? And if you have a partner, how did you all meet?
Please let us know in the comments section below.
Uttam and Amrita 👋🏼👋🏼
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Guess I am old and old school. I have never understood dating online after reading you excellent article I still don't.
Really interesting to read about the trends, and btw I love the 2 minute version summary. I was shocked to read those costs and had no idea it was that high. I met my husband on Hinge a few years ago when the apps were flourishing, and I’ve been hearing how much the apps have changed recently. Some friends feel like they can’t meet anyone without paying. I’ll definitely pass this along to them!