Online Dating: When Love Stories Become Profitable

The online dating industry continues to expand, generating several billion dollars and gaining ever more popularity. But how, by capitalizing on love, do these major platforms manage to ensure their profitability?

Covid-19, Accelerator of Online Dating

The coronavirus pandemic has significantly altered the dating landscape. Lockdowns and social restrictions have encouraged more people to turn to online dating apps. A way to maintain social connections while adhering to physical distancing measures.

It's no coincidence that the sector experienced a sharp increase during this period. Many single people have experienced loneliness, deprived of contact with their colleagues or classmates. Meanwhile, couples, retreating into themselves and forced to spend all their time together, ended up separating. Among them, a significant number of new users ready to try online dating.

Living on love and fresh water? Not just that...

Dating apps present themselves as altruistic services, offering the means to find love. Their services meet one of the most essential human needs: that of affection, love, and socialization.

These platforms also generate significant commercial interest and are based on solid business models designed to ensure their profitability. Today, the online dating industry generates nearly 2.5 billion euros just in the United States, and consumers are willing to spend tens of euros each month to find their future soul mate.

To generate profit, companies have developed effective and diverse monetization strategies. Many dating apps thus operate on a freemium model: free registration allows everyone to discover the platform, but a paid subscription is required to access all features. For example, to make one's profile more visible or to see who has viewed it.

Fruitz Screen - Send likes without counting - Enjoy an unlimited number of likes to pick at will - 1 month for €12.49 — Example of the freemium model offered by Fruitz

If you decide to opt for a paid option on one of these platforms, check primarily:

The identity and address of the company managing the application.
The rate of the desired subscription, payment conditions, and the duration of the commitment.
The renewal conditions and the terms of cancellation.
Which personal data are likely to be transferred to third parties, especially abroad.
Who is the host of the platform and where its servers are located.

To generate revenue, some platforms also offer in-app purchases. Others play on advertising options: the user must choose between:

an ad-free experience, for a fee.
free navigation including commercial advertisements.

Such economically efficient business models. For example, Match Group, the parent company of many dating apps (such as Tinder, Hinge, or OkCupid), has seen its profits increase significantly over the past decade.

Match Group Revenue Chart - €800 million in revenue in 2021 - 2022 — Revenue evolution of Match Group from the first quarter of 2014 to the second quarter of 2022 - Source: Statista

A growing market, increasingly diversified

+8000 sites and apps

of dating are listed today worldwide, including 2000 in France.

Source: Bpifrance

This complicates the choice for singles in search of their chosen one. Especially since a wide range of services may encourage them to create accounts everywhere... to ultimately use only one or two.

The proliferation of dating apps is not without constraints for newcomers: standing out from the competition becomes crucial. A differentiation strategy, increasingly used, now consists of targeting a specific audience to create exclusive communities. Some examples among many:

Luxy presents itself as a "millionaire matchmaker".
The League targets professionals previously selected based on their industry, university education, and LinkedIn network, thus considering the educational level of individuals.

Such types of dating apps, focused on elite profiles, thrive thanks to a business model selecting users. For example, the dating app Toffee (launched a few years ago in the United Kingdom) is designed exclusively for people educated in private schools. The monthly membership is set at £5, which acts to some extent as a barrier to entry.

Tofee Screen - of a 26-year-old man - Sherborne School, Dorset — Visual used by Toffee to present its application on the Google Play Store. Its slogan: "hand picked" (hand-selected)

Other online dating services try to differentiate themselves by focusing on interests and lifestyles that some users may share. For example, platforms like My Green Lovers, Bioflirt, or Amours Bio, aim to connect people sensitive to the protection of nature, animals, etc. This allows companies to focus on a specific market segment. And for users, to make friendly and/or romantic connections aligned with their values and lifestyle.

Opening one's heart to one's chosen one (and to online dating companies)

Upon reflection, the amount of (particularly) personal data collected by online dating sites and apps is staggering. Millions of women and men fill out personality questionnaires, providing their tastes, values, and dreams on carefully stored forms. All this information is processed by algorithms and stored indefinitely. A real treasure trove of intimate details for companies seeking to closely profile their users - for example, to send them targeted advertisements.

Finally, in the age of generalized artificial intelligences, it's possible that one day this information will be part of a dataset used to train a machine. Something to think about before sharing one's most secret desires on an online platform.