The Online Dating Recession

Match.com’s Thursday announcement that it had purchased Singlesnet was notable for its upfrontness; the company acknowledged that Singlesnet’s traffic is “currently in decline” — something it said it hoped to turn around. Turns out, however, that much of the online dating industry is in a traffic slump.
comScore (NSDQ: SCOR) figures show double-digit year-over-year declines in unique visitors worldwide at big paid subscriber sites like Yahoo (NSDQ: YHOO) Personals (down 34 percent), Match.com (down 37 percent), and Singlesnet (down 27 percent). Notable exceptions include eHarmony (up 31 percent), social dating site Zoosk (which has very impressively seen its traffic surpass that of Match and Singlesnet in the U.S.) and PlentyOfFish (up 26 percent), which happens to be the only free site among the top ten.
PlentyOfFish founder Markus Frind says that the overall industry-wide traffic decline — exemplified in the below Hitwise chart he provided to us — is largely recession-driven (“So much for dating being recession proof,” he says in an e-mail). But he says it is overly simplistic to attribute his site’s success to it being free.
“In online dating, success only comes from actually matching people up,” he says. “There were hundreds of free sites before I started and there are many more now. Fifteen percent of my users are actively paying members on other dating sites.” He says that paid sites will only decline “drastically” if PlentyOfFish gains substantially more market share — something he says has already happened in its home country of Canada.
Still, Match’s dependence on paying subscribers has raised concerns among analysts before. During an earnings call last spring, executives were asked whether the industry was moving towards an ad-supported model. IAC (NSDQ: IACI) CFO Thomas McInerney responded that the “overwhelming world of personals is on the subscription paid side” and said he believed that would continue. That presumably remains IAC’s belief in light of the Singlesnet acquisition — and for now it may be paying off. Despite the traffic declines, Match’s revenue increased five percent last quarter.
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