Tinder is seeing its subscriber counts drop, as ongoing financial challenges put pressure on consumers’ budgets for nonessential services.
Online dating giant Match Group shared in its fourth quarter 2023 financial results Wednesday (Jan. 31) that, across its banners, the number of paid users declined 5% year over year to 15.2 million, with Tinder’s dropping 8% to 10 million, even as Hinge’s grew by a third to 1.4 million. Across Match Group’s platforms, revenue per paid user grew by 17%.
“We acknowledge that Q4 was a large sequential payer decline, but we are optimistic about the future, as we see these declines moderating,” Match Group CEO Bernard Kim told analysts on a call accompanying the earnings release.
It may be some time before these trends reverse. The company noted in a letter to investors that it expects that “Payer trends will turn positive” in the third quarter of the year.
This shift, Kim explained on Wednesday’s call, will result from “marketing coupled with several product initiatives that are underway,” with these initiatives including “enhancing the visibility and value of our paid packages,” as well as personalizing the messaging by “dynamically showing the right offer to the right user at the right time.”
On Tuesday (Jan. 30), Match Group announced a $1 billion share buyback plan, according to Reuters, amid lower consumer spending on online dating platforms.
A significant share of dating app users are willing to shell out for premium, according to findings featured in “The Love and Social Media Edition” of PYMNTS Intelligence’s ConnectedEconomy™ Monthly Report series. The study, which drew from a survey of more than 2,700 U.S. consumers, found that 28% of respondents engaged with digital dating platforms as of last March. That share jumped to 57% for Generation Z and 48% for millennials. Among dating app users, 15% paid for subscriptions.
Yet financial challenges are prompting many consumers to cut back. The PYMNTS Intelligence study “The One-Stop Bill Pay Playbook: Drivers of Consumers’ Bill Payment Priorities,” which drew on responses from more than 2,100 U.S. consumers, found that when people are unable to pay all their bills, many cut their membership subscriptions. Fifty percent said they would cancel such subscriptions, while only 19% said they would prioritize paying these bills in full.
Looking ahead, Match Group aims to use artificial intelligence (AI) more in its apps to improve the experience and draw in dating app holdouts, with a “long list of product features” on their way using the technology, according to the company’s chief financial officer, Gary Swidler. In turn, the company expects that this will boost revenue from its subscriptions and other paid products.
“We’ve got a lot of exciting AI initiatives planned for Tinder, for Hinge and for new products as well that we’re going to roll over the course of 2024,” Swidler said. “… I think it’s logical to think that they would benefit [revenue per payer (RPP)], because it will be a better experience. People should see more value in the product and be willing to pay more.”