The future of paid and premium dating in the

mobile multiscreen world

Laurence HollowayCo-Founder and CTO

Lovestruck

20 years of online dating: a simplified timeline

• 1995 – Match.com• 2000 – eHarmony • 2003 – POF• 2004 – OKCupid, Guardian Soulmates, My Single

Friend• 2006 – Lovestruck• 2007 – Zoosk• 2010 – How About We• 2012 – Tinder• 2013 – Hinge (app) • 2014 – Happn, Bumble• 2015 – Raya

1 Million Years B.T.• Fully paid services dominate• Long-term, monogamous and highly

valuable relationship with customers, insane LTVs

• 10s of millions spent on TV advertising to build brands and acquire customers

• Industrial strength CRM via email• Sharp tactics deployed to convert

subscribers• Free dating associated with low quality – you

get what you pay for• Mobile dating experience slow, unreliable,

cramped and compromised

Born Free• The arrival of large scale free dating on

the web, with a few on mobile• Big and busy, but you do the legwork and

might have to market/spam to all your contacts to get any real value

• OkCupid was the first quality free site?• Brings online dating to a much wider

audience, breaks down barriers• Valuable lead generation for traditional

players – people try free first, use multiple services

• Freemium feature upgrades emerge

The arrival of Tinder• Hello to the free, mobile and good• The first truly viral, social dating product? Enabled

by Facebook, minimal onboarding and a casual focus.

• Earnest nature of traditional sites at odds with the millennial generation

• The unicorn: right app, right execution, right time, right audience, right backer

• Produced a rapid change in customer expectations about the overall experience and, importantly, the cost of online dating services

• A genuine and serious threat to the model of paid mainstream dating providers

Variations on a new theme

• More apps arriving and some growing fast. Most are free to message, most using Facebook for signup, matching and onboarding.

• Free no longer means low quality – newer apps are working to improve on Tinder too

• Mobile no longer means a compromised experience. Better apps, larger screens, faster data, greater privacy.

• BUT does anyone have any significant revenue or are they just burning investor cash looking for a buyer or, worse, just lifestyle/PR businesses? Is Tinder an anomaly rather than a unicorn?

“Why investors don’t do dating” – Andrew Chen

• Built-in churn

• Dating has a shelf-life

• Paid acquisition channels are expensive

• City-by-city expansion sucks• Hard to exit• Demographic mismatch with

investors

Back To The Future?• Freemium is alive and well: Tinder Plus

(Rewind, Passport), Happn charms (contact people without a mutual match), CMB beans (find out who your mutual friends are)

• Even the paid tier is perhaps stirring into life again, with a twist (e.g. Raya). But now niche?

• Pay if you’re not an influencer, pay if you’re old, pay if you want a Super Like

• Also pay if you want more quality, more curation, less choice?

• Match and eHarmony actually growing subscribers?

• Customer behaviour is not just mobile, it’s multiscreen – so dating on the web will survive?

Why pay for dating anyway?

• Dating services with revenue should be more likely to invest in customer service, tech support and safety features

• Active blocking of scammers and bots• Selective and verified membership • External benefits such as events and discounts• The paywall is a sincerity filter for serious dating?• Added features that give daters an advantage or ego

boost• Over 30s want fewer matches, more curation (à la

CMB)?

Dangers for paid dating

• Subscription prices being pushed down by mobile = the end of the “greedy” renewal model and heavy CRM approach?

• Gradual contraction to a small and expensive niche area of the market, like the offline introduction agencies before?

• Acquisition becomes more difficult, more expensive and ROI becomes increasingly unsustainable. Free / viral / social players don’t need paid marketing to build a brand.

• Death for those who can’t/won’t adapt to changed customer expectations• Death for those who don’t provide better value, better quality and a better

experience than free apps• No new investment for the traditional marketing-led acquisition model – only

the big guys will survive• White label providers are failing to catch up with the shift to native apps?

Some conclusions• For new mainstream dating services, messaging and matches no

longer belong in the paid tier. Customers expect most features to be (largely) free.

• People will still pay for extras if they provide real value and advantage.

• Some people will pay to be cool or exclusive, but most won’t.• High dependency on Facebook for signup, onboarding and matching

could be seen as a risk – Zuck is famously known to be negative about online dating.

• Expensive, repetitive marketing of ageing web-generation products is not sustainable. Technology and time have moved customer expectations forward.

• The industry is always changing and those who adapt and innovate, rather than just watch and follow, can surely survive.

Thank you