Online Dating Makes Up Almost Half of Matchmaking Services Industry

(Online Dating Industry Journal) Market research firm Marketdata Enterprises Inc. has released a new 232-page report entitled: The U.S. Dating Services Market. According to press materials, the study presents status reports and analysis of independent matchmakers, dating Web sites, chains and franchises, radio datelines, print personal ads, and singles publications. The study estimates industry revenues, trends, and competitor profiles from 1991 to 2008 Forecast.

“The introduction or dating services market is growing only 3.7 percent per year in the U.S., but not all segments of the market are faring equally well. The industry is basically self-regulated. This has turned into a global business, branching beyond the United States. The U.S. is still the largest market, but it’s saturated and the untapped potential appears to be Europe, as well as ethnic and hobby-based niche markets.”, according to Marketdata’s Research Director, John LaRosa.

Here are some major findings from the report:

1) Marketdata forecasts the total dating services market to grow at an average annual rate of 3.7% from 2005 to 2008, to $1.11 billion. Growth has slowed in the all-important dating websites segment, which represents 49% of the entire market. Most other segments are seeing flat or moderate gains.

2) It’s estimated that 1,300 independent matchmakers operate nationwide (grossing $50,000 to $200,000 per year each). An additional 218 physical offices run by chains or franchises (Great Expectations, Together, The Right One) also compete. Added to this, there are literally thousands of dating websites, as well as singles magazines, and roughly 375 radio station datelines.

3) The latest U.S. Census survey reported that the “average” dating service establishment had 2002 receipts of $555,000, down from $887,000 in 1997.

4) Matchmakers, usually 1-person operations, have survived and prospered, despite fees than often reach $25,000+. They cater to high income male executives. More are entering this lucrative field. About 1,300 are estimated in the U.S. The “average” established matchmaker grosses about $200,000/year, but some make as much as $5 million.

5) Off-line dating services (franchises and chains, solo matchmakers, speed dating) in many cases are outperforming the dating websites. They have a lower cost to acquire a new customer, a higher lifetime customer value, and can offer in-person verification that dating websites cannot.

6) Very few dating Web sites are profitable and the cost of entry to build a “critical mass” and database of profiles is now estimated at $10 million.

7) Profit margins for “bricks & mortar” chains can run as high as 30 percent of sales, with little or no competition, and 19-22 percent with moderate competition. No doubt, margins are at least 30 percent for the one-person matchmakers not run out of a retail office—because their overhead (especially advertising) is much lower. It’s not unusual for a dating franchise to spend $5,000 per month on advertising, to bring in perhaps $15,000 in sales. By contrast, a single matchmaker may spend next to nothing, instead relying on word-of-mouth and personal networking.

Kim's Comments:
It's no surprise that dating websites make up 49% of the dating services industry.  Before online dating existed, using an offline matchmaking service was always considered an unusual exception to the traditional rules of dating.  Back then, you were extremely unlikely to admit you have used a matchmaking service or placed a personal ad, much less admit that that is how you met your current partner.  The same stigma followed the beginning of the online dating growth spurt, but, as more people found success with online dating, somehow a third party matchmaker became a socially acceptable way to find a date.

Comments

[Sam Moorcroft, ChristianCafe.com]

I like this part:

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6) Very few dating Web sites are profitable and the cost of entry to build a “critical mass” and database of profiles is now estimated at $10 million.
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I'm not sure where they got that figure - likely it's for generic sites. Niche ones would have a smaller figure, but still cost a bundle.

Talk about comfort for those of us that are profitable:-)

Of course, that is no guarantee of future success.

But, still...:)