(Online Dating Industry Journal) JupiterResearch, a division of Jupitermedia Corporation, announced, in a new report entitled "Online Dating in 2006: Pricing Strategies to Drive Subscriber Growth" authored by JupiterResearch Analyst Nate Elliott, that the U.S. online dating industry failed to grow its paid subscriber base in the last year. According to the report, online dating industry growth in the last twelve months has been driven by higher monthly fees, not an increasing number of subscribers.
A January 2006 JupiterResearch consumer survey found that the number of Internet users that paid for online dating subscriptions last year actually fell from 6% in to 5% and that industry-wide user conversion rates last year fell for the first time since JupiterResearch began tracking that metric.
"Although online dating revenues continue to grow, rising prices have kept a large number of users from converting to paid subscribers," said Nate Elliott, JupiterResearch Analyst. "Thirty seven percent of visitors who don't convert say dating sites cost too much, making it their leading complaint.”
Despite fear that social networking sites like industry giant MySpace.com could potentially bring the downfall of paid online dating services, the JupiterResearch report also concludes that social networking sites pose little threat to the online dating industry. Of surveyed dating site visitors who don’t pay for subscriptions, only 14% say they use free sites, like social networks, for online dating instead.
"Only one-third of Internet users who went to dating sites in the last year became paying subscribers," said Elliott. "Our research shows there is an opportunity for dating sites to use targeted discounting strategies to convert more of their visitors into paid customers.”
Kim's Comments:
Is it really that suprising that online dating site subscriptions are down, considering that the services are raising their monthly fees? The research results also indicate that "just 14% of dating site visitors who don't pay for subscriptions say they use free sites, like social networks, for online dating instead". But, since when does 14% "pose little threat to the online dating industry"? It sounds like a threat to me that is only going to increase as users better familiarize themselves with these social networking sites for dating purposes. I would be interested to hear what others think about the interpretation of these research results.
I have some problems with the research, particularly when they say that 33% of visitors to online dating services become paying members. That number is not realistic. Our trackable advertising numbers show that number to be less than half of what JupiterResearch claims.
About the flat/down growth of subscriptions, it is the services who offer less and charge more that are creating this problem. Do I really want to pay over $50 a month knowing that when I send someone an email, it may never get read because the person I sent it to isn't a paying member?
What these sites are doing is creating an opportunity for someone to come in and steal their business. Imagine an online dating service, with proper funding, marketing skills, PR finese, and customer service coming in and offering $14.95 a month with the ability for unpaid subscribers to respond to emails they receive from paid subscribers. It's not impossible for such a service, if done right, to not only challenge the big guys, but to overtake them. Unfortunately, when a service gets a taste of money, it generally becomes greedy and customer service/satisfaction is one of the first things thrown out the door.
Joe Tracy
Online Dating Magazine
Posted by: Joe Tracy | February 08, 2006 at 11:59 AM
The average dater visits 3 dating sites before signing up.
But those stats are totally skewed because comscore which they base it on is often out by a factor of 10 or more.
No paid service has any chance of competing at a lower price point and above free. You need to get to critical pass, and then you need to mass spend to drive customers to your site. Match.com and yahoo have a endless supply of free traffic, so they can outspend you and buy up all the major sources of traffic online.
Posted by: Markus Frind | March 02, 2006 at 12:49 PM
I find that Jupiter Research often paints a much rosier or less gloomy picture for industies whether they are on the way up or down. I also agree with Joe about how these big dating sites are leaving the door open to the savvy upstarts like Markus Frind.
Posted by: Marc | March 19, 2006 at 08:48 PM