The complete guide to the online dating industry

The complete guide to the online dating industry
Image: Giovani Flores for Quartz
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Dating online in 2021 is a dizzying virtual buffet of ways to connect with someone. You can give your match a bouquet of digital roses that cost $29.99 to show them you really do care and didn’t just casually swipe on them while sitting on the toilet like you did with hundreds of others. You can immediately video chat your date to pre-screen them to confirm they’re not creepy. You can change the location on your app to find a lover in a different country and see what happens. You are also probably switching between three different apps to keep optimizing for your best chance of meeting someone special.

The user has all these options because over the last quarter-century, online dating went from a stigmatized activity discussed in hushed, embarrassed tones to the most common way couples meet in the US. It has completely, unequivocally revolutionized how we fall in love—and turned into a multi-billion dollar global industry in the process.

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For many, online dating is unavoidable. “I never dated until it was online—that’s how I was introduced to dating. And so, if I’m single I’m always going to be involved in it,” said Kevin, who is 30 and lives in Brooklyn, and has been dating online for a decade.

“No one goes to a bar to find the love of their life. It’s increasingly hard to date at work because of HR rules,” said Eric Resnick, a dating coach who has been helping people write their online dating profiles for more than 15 years. Mobile phones have made it difficult to walk up to a stranger because “humans walk around in their own cloud of technology.” So people turn to the apps.

The industry is estimated to have 270 million monthly users globally and grew by about 13% even in the pandemic-dominated year of 2020 (although the pace of growth has generally been  slowing). Everyone is dating online, even 18-year-olds in high school. But at the center of this massive paradigm shift, there’s a tension for daters: online dating has become both inevitable and exhausting.

The era of Tinder has made people, especially millennials who’ve come of age along with the rise of mobile technology, tired of swiping into oblivion. Many complain that they are not finding meaningful connections, while the industry is focused on making money off of their unending search for love. They are at the center of a massive social and financial experiment, and it’s wearing on them. The industry has noticed and is trying to adjust or pivot as it hopes to keep attracting new users. The pandemic has accelerated the pace of that change. Experts and insiders say that the apps that define the next era of online dating will be ones that offer more fun, safety, and community—and potentially have an even closer, borderline invasive relationship with users.

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Table of contents

Competing for the dater | Monetizing the search for love | Something’s broken | Hinge vs. Tinder | Five ways online dating will change

Competing for the dater

Kevin toggles between three different apps to meet people—when he’s looking for anything from a casual encounter to a friendship it’s Grindr, the app for gay men; when he’s looking for something serious, it’s Hinge; more rarely, it’s Tinder.

“I’ve downloaded and tried pretty much all of them,” he said.

Although Kevin is an avid tech consumer, his experience of going back and forth between apps is fairly typical: Many users keep multiple apps on their phone and use them depending on what they’re looking for.

There are countless apps and dating or matrimonial sites, but the industry is roughly divided into two segments. There are the mobile-first apps where you swipe or look through a deck of profiles indicating who you like along the way—like Tinder, Grindr, Bumble, or Hinge—which generally cater toward a younger crowd. And then there are the more traditional, older services—such as Match.com, eHarmony, Zoosk or Plenty of Fish—that require users to fill out a more extensive profile and allows them to search for matches based on specific criteria. These older sites have survived the Tinderization of the online dating economy, and are holding on, or even growing.

Most of those services are owned by one company: The Match Group. It dominates the industry so thoroughly that any user, in virtually any place in the world, could pick from their roster of apps. “Match Group has essentially created a cradle-to-grave dating cycle,” Resnick said. “They have you from Tinder to Our Time [an app for older daters].”

Match has sparked criticism for years, accused by industry observers of stifling innovation. Much like Facebook in the social media world, Match likes to acquire its competitors. Its dominance makes it harder for small players to enter and survive on their own.

Along with the major, general-interest players like Tinder, the Match Group also owns niche apps, like the Latino-geared Chispa or the rapidly growing app for Black singles, BLK, both of which the company incubated from the very beginning. “We’re not the first dating app made for Black singles,” said Jonathan Kirkland, BLK’s head of marketing. “There have been others, there are [still] others. But from a resource standpoint, they don’t have what we have by being a part of this larger family.”

The head of Match’s North America properties, Amarnath Thombre, told MarketWatch in September that the company’s strategy is to “have each app run its own experiment,” and, as the experiments play out, the company can use the successful features in its other properties.

Match is also expanding into Asia, a market that is a burgeoning online dating behemoth in its own right. The company owns the lucrative Pairs, Japan’s most popular dating app, and Hawaya, its Muslim-focused service, launched in Indonesia, Malaysia, and Singapore, among others.

There are other major players. Bumble, founded on the premise that women should make the first move, launched its IPO on Feb. 11. It also owns Badoo, a service that’s very popular in Europe. According to the company’s January filing, the Bumble group had 42 million monthly active users in the third quarter of 2020. Or Facebook Dating, the latest massive entrant into the market, which seems to have fizzled after a big launch—although some industry experts say it still has big potential with its access to massive pools of information about its users.

And despite the competition from the big guys, many highly specialized services have been able to survive many years, or even flourish. There’s MouseMingle, which is specifically for Disney fans, or Positive Singles, for those with incurable sexually-transmitted diseases, which claims to have more than 2 million registered users, or the self-explanatory Farmers Only (tagline: “City folks just don’t get it”). These hyper-specific niche sites help people find someone who is highly compatible, sharing their passion, background, or circumstances.

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Monetizing the search for love

Ben, who lives on New York’s Long Island and is 32, joined Tinder several years ago, when “you could just swipe away and like you didn’t have to pay anything.” But over time, that changed. He started paying for “Super Likes,” a feature that Tinder offers à la carte, and that lets the super-liked person know that you, well, super like them. But that was not enough. “They just kind of kept finding ways to make you feel limited unless you paid.” So he ended up subscribing to a premium version of the app.

What Ben is describing is the freemium business model that many apps have been using in the last several years, or are starting to use. (More traditional sites like Match.com have several levels of membership, with some add-on features, and an extremely limited free version).

Because the apps are free—and most users still use free versions—there is no barrier to entry. The company, initially backed by investors, builds up a large user base, and is then able to introduce a premium offering. Those who want more out of the apps can pay (for example Tinder, which launched in 2012, offered its first subscription tier in 2015). And a growing number of users are happy to fork over a couple of bucks at a time, or the equivalent of a fancy cocktail or a newspaper subscription, to have all the paid options all month (the highest monthly subscription for Tinder is $29.99, but, controversially, the company charges differently depending on the user’s age and possibly other factors).

Some of the pay-to-play options might sound a bit dystopian, like paying to be more visible to people in their carousel of profiles, via Bumble’s “Spotlight” feature; or sending someone a virtual rose, an offering on Hinge; or changing your location before a trip to check out the dating pool before you arrive, via Tinder’s “Passport.”

But executives argue that paying for these features is also in the end better for the user.

“Pretty much everything that we charge for on Hinge, we couldn’t really give away for free because then it wouldn’t work anymore,” said Hinge’s CEO and founder Justin McLeod. “Think about Roses, for example. Roses are really, really special,” he said. “If we gave everyone unlimited Roses, then it would completely defeat the purpose of Roses.”

Buying add-ons became more compelling for users once accessing the sites on their phones became the default, and after games like Candy Crush normalized in-app mobile payments. “People are used to spending a buck here and there for their mobile games,” said Steve Dean, dating coach and industry consultant. What once required users to take out a credit card and painstakingly enter their data now just asks them to use their phone to take a quick scan of the thumbprint or face—it’s that easy.

Unlike the dating app’s cousin, the social media platform, advertising is not a big source of revenue for the online dating service. But ultimately, the business models have a lot in common. “Regardless of the dating site, people are the product,” Resnick said. “You’re the consumer while you’re looking. But you’re the product when everyone else is looking.”

When you leave a dating site or app because you’ve found what you want, you remove yourself from their money stream, and you take someone else with you, Resnick said. “That’s a very bad business plan.” So while you’re there—experts say the average lifespan of an online dating app user is three to six months—companies will do their best to make as much money off of you as possible.

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Something’s broken

The more a user is treated like a product, the more exhausting their experience becomes. In the last several years, multiple outlets have declared that people are sick and tired of “swiping culture” and that the apps are bad at finding love. Dating, if it ever was fun, now borders on the tedious.

“Almost every major app is trying to get you to swipe more, to log in more frequently, to spend more time looking at people and less time engaging with people,” said Dean. “There’s been this huge shift toward accumulating human attention with virtually no payout.” Certain features, he says, make it worse. Paying just to make your profile more visible for a certain amount of time is just “a way to get me stuck swiping more.” The main notification he says he gets on dating apps is one that mimics Uber’s “surge pricing.” The app tells you that it’s primetime for swiping. “It’s basically saying come swipe the roulette.’”

The more traditional dating services have their own manipulative tactics. Match.com does not tell you whether a user you’re sending a message is a paid member or not. If they use the service for free, they generally won’t be able to read the message.

The apps can also be addicting. Built into them are the same dopamine triggers that social media apps have made infamous. And users talk about their app experience like a vicious cycle of dependence. Many delete them only to come back later. One user described her usage as “binging.”

Julia, 31, who is Polish and lives in Barcelona, said that last summer she realized using Bumble sucked the energy out of her. “Going on the app, scrolling through all those people, sending that first message, setting up a date, the date itself—everything was so superficial that I became incredibly tired, overwhelmed,” she said. “It felt like a duty, that I should use the app, that it was my decision and since I have it, something must come out of it.” She deleted it. But after several months, she installed it again. “Maybe I’ll meet someone this time,” she said she thought. “I had the energy, perhaps I also forgot how awful it was, I hoped it would be different,” she said. She deleted it again after a week.

Several users described a feeling of being overwhelmed by all the choices the app offered. “I can’t wait to delete them all, “ said Alissa, 22, from Los Angeles. “I think there’s a certain validation aspect on the apps where there’s always someone better, taller, richer, etc., and it really hurts the chances for actual meaningful connections.”

And yet, despite these frustrations, users keep coming back, because it feels like one of the very few ways you can meet someone these days.

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Hinge vs. Tinder

A lot of the frustration with online dating stems from the “gamification” of the industry, which started when Tinder arrived on the scene in 2012. But that gamification had a significant upside for daters.

“By calling itself a game on the app, Tinder single-handedly made it possible for millions of people to enter the dating space because it was no longer this super stigmatized thing,” said Dean. It vastly simplified the sign-up process, removing a barrier to entry. You didn’t have to spend an hour to fill out a profile, crucial in a mobile-first world.

Tinder has been the golden child of the online dating revolution—and it still is the most popular app in the US, and in many places around the globe, to the point that the Match Group separates its properties into “Tinder” and “non-Tinder” in its business communications. It’s a truly global business that, despite many users’ frustrations, keeps growing—Tinder generated nearly $1.4 billion for the Match Group in 2020.

Tinder was created as a departure from the traditional dating sites—and many of the apps that are currently the most popular became a response to Tinder, by imitating and altering the user experience. Bumble, which was created by a former Tinder executive, sought to empower women by requiring them to make the first move. But it did keep sparse profiles, and swiping to match. It’s now the second-most downloaded app in the US, according to data from mobile app intelligence company Sensor Tower.

The latest industry darling is Hinge. When it was founded in 2012, the same year Tinder launched, Hinge was strikingly similar to Tinder; McLeod describes the Hinge of that period as “just another app with a swipe feature,” while its venture-capital backers encouraged chasing growth and engagement. But when Hinge relaunched in 2016, the company made several seemingly small tweaks that had a big effect. Hinge decided to intentionally rebrand itself as an app for those actually trying to find a relationship, versus a casual fling or hookup, a reputation Tinder has never been able to shake. “We threw away all those metrics about growth and retention and engagement,” McLeod said. “We just made the bet that if we focused on the number of great dates per user, that that would lead to our success over the long term.” Hinge started to ask users whether they’d gone on a date, and how that date went. “And that is our north star, our metric that determines whether a feature lives or dies.” The reasoning went: If people have great dates, they will tell their friends about Hinge, and the company will grow. And it worked. The Match group, which acquired Hinge in 2019, said in its latest earnings release that Hinge downloads grew 63% globally between 2019 and 2020.

One way of getting people on those great dates, McLeod says, was making a small change to how users interacted with the profiles of their matches. Unlike on Tinder, where users are faced with a blank box to message a match, Hinge encourages them to respond to a specific element of their match’s profile, like a photo, or an answer to a prompt provided by the app.

A prompt like “my go-to karaoke song” might not lead to any meaningful exchange, according to McLeod, but one that requires the user to show more vulnerability like “qualities I’m looking for in a plus-one wedding date,” is a powerful conversation starter—which in turn can lead to a good date. (Tinder, once copied by everyone else, is now taking cues from the success of Hinge—in 2020 it added a “prompts” feature.)

Kevin credits a Hinge prompt with his current relationship. To a prompt that asked “I want someone who…” he answered: “intentionally watches movies with the director commentary tracks.” It was important to him to find someone who shared his passion. A guy responded saying, “That’s hot,” and that exchange kicked off a conversation. “It definitely put him on my radar much, much more than it would have been if it was just a swipe right on Tinder.”

That millennials are tired with the swiping game may not matter much for Tinder. And that’s because most of its users are younger: Gen Z is taking over the app.

“I think that we forget that, for someone who’s 18 or 19, they’re not tired, they just started, and there’s positivity and excitement. Because of where Tinder is in culture, [using it] is a rite of passage,” said Nicole Parlapiano, the company’s vice president of marketing for North America. Tinder, which got its start on college campuses, wants to be the introduction into the world of online dating. Depending on the location, Parlapiano said, the share of 18-25 year-olds on the app “hovers around over 50%.”

Indeed, the age of people dating online has been falling—especially during the pandemic, according to Sensor Tower.

For Peter, who is 18 and from New Orleans, going on the app was something he was waiting to do—in fact, he tried to sign up at 17, but the app wouldn’t allow him to do so. He wasn’t having much luck getting dates the old-fashioned way. “So I was like, you know, everyone talks about it, I’ll try Tinder.”

At the same time, he readily admits he treats it like an entertaining game, and only goes on when he’s bored. “There’s a lot of people on there just, you know, looking for no-strings-attached fun. But at the same time, I have come across people who are really just looking for friends.”

That sentiment is what Parlapiano sees as a major shift for the company. “I think that really the biggest change we’ve seen in the past four years or so and magnified by Covid is the way that people are looking at Tinder as a people app, versus a dating app.” Gen Z, she says, has a different attitude toward Tinder then their predecessors. They are more flexible in that they are looking for everything from sex, to relationships, to “situationships,” to travel companions. They might make matches simply for conversation, to practice flirting, or as a little self-esteem boost.

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Five ways online dating will change

As the world went into lockdown in March, users turned to online dating for some human connection. They arranged video dates, met up in the virtual world of the game Animal Crossing, went on socially-distanced walks, attended virtual sex parties.

“There may be a reprisal of appreciation and enthusiasm for online outlets that way while people are stuck home due to the virus,” said Paulette Sherman, a psychologist and dating coach. It could have a lasting effect, making online dating even more ubiquitous. “People will get more used to it and it will be even less stigmatized and will probably become even more of a habit for some of the holdouts.”

Because of this, despite a weak economy, dating app companies had a decent year. Bumble’s IPO indicates there is still significant room for the industry to grow, and Match posted solid results in its fourth-quarter earnings.

Online dating is an industry that is constantly evolving. Dating online in 2014 was very different from dating online in 2019, to say nothing of 2020, the year the world was turned on its head. Based on conversations with users, executives, and industry insiders, here are some predictions about how it will evolve further.

Apps will be for community-building, not just dating

Tinder is not alone in talking about branching out beyond core dating. Bumble has offered its BFF mode for finding friends since 2016, and its networking feature Bumble Bizz since 2017. BLK is moving into the “lifestyle” space like creating forums for conversation or highlighting Black businesses in an effort to foster community.

Mark Brooks, a leading industry consultant, says that for dating apps to be able to keep monetizing, moving into a more community-oriented gear is the way to go. “We want people to stick around, have fun. Yes, hook up, meet up, and maybe stick around even beyond that point,” he said. “I think we’ll see a general shift away from dating into more community-esque apps.”

During the pandemic apps that aim to combine dating with fun have seen a resurgence. The Meet Group, which owns several apps dedicated to meeting people (not necessarily to create matches and relationships, but sometimes it happens along the way), has been pivoting to livestreaming in the last several years. On an app like MeetMe you can tune into someone’s livestream, and connect with them over chat and send them money. Since the beginning of the pandemic, the Meet Group saw livestreamed minutes increase by 40%, according to its CEO Geoff Cook—and people have been spending a lot more money while tuning in. And the big guys are catching on. The Meet Group provides livestreaming for Match Group’s Plenty of Fish, and the feature is proving to be popular. In February, in a massive, $1.7 billion deal, Match acquired Hyperconnect, a Korean “social discovery” company that owns a livestreaming app, and a video and audio chatting app that translates conversations in real time.

Cook points out that the growth of the dating industry has generally been slowing. “And so what do dating companies do when you’re saturating the market? Well, what they do is they find other ways to engage the user,” he said. “They don’t have to just be all about utility, they can provide some entertainment value.”

Video dates are here to stay

Since all of our communication has moved to screens during the pandemic, one-on-one video dating has also seen a boon. In July and May, Tinder and Hinge respectively introduced in-app video chatting; Bumble, which already offered the feature, saw a boost in usage.

“It prevents catfishing, it makes users be able to gain a little of a sense of humanity,” said Dean. “When you stare at photos you don’t really get a sense of who people are, you don’t see them emote.”

Many of the users I spoke to were still hesitant about video, feeling it was awkward, but they agreed it was a good addition. McLeod thinks video dating will stick around even after the pandemic. Full-blown dates might not happen much on video, but 10-15 minute screenings might. (A check-in like that is also cheaper, since there’s no need to pay for dinner or a cab).

Dating may move more slowly

Adding a video step is in some ways a form of slowing down the entire process, of getting off that roulette wheel. During the pandemic everything has had to slow down, including dating: since interacting IRL is riskier, people are chatting longer, waiting longer to meet.

But it’s actually a trend that has been percolating for some time now, as a reaction to swiping fatigue dubbed by the industry “slow dating.” “We’ve seen that slow dating continues to be a trend as people show more serious dating behaviors and raise the bar on what it means to build trust online when dating,” said Priti Joshi, Bumble’s vice president of marketing strategy and operations, adding that 55% of Bumble users are taking longer to move a match offline. (Not coincidentally, the rise of swipe culture also led to a resurgence of the matchmaker industry—exclusive agencies that charge hefty fees for the human touch.)

Apps will hopefully take user safety more seriously

Every female dater interviewed for this article mentioned how they often feel unsafe on the apps, or how they are put off by unwanted sexual attention. In October, Australian broadcaster ABC published a large investigation into sexual harassment and assault on Tinder, revealing how woefully inadequate the company’s response was. “Of the 48 people who told us they reported a sexual offense to Tinder, only 11 received a response from the app,” ABC reported.

The industry is starting to acknowledge the danger users may encounter by simply using the apps. In 2019, Bumble launched a feature that detects and blurs inappropriate photos. In response to the investigation Tinder started directing users who report violations to support organizations.

Content moderation is slowly getting better, Dean said, and will continue to do so as the companies implement machine learning and human moderators to detect abusive behaviors. But, he added that companies still prioritize keeping user accounts rather than kicking people off the platforms.

Dating could jump to new media

For a true dating revolution to happen, the industry needs another media shift, like the one from desktop to mobile, said Brooks. He predicts that the jump will be to Augmented Reality, and that through wearable technology like AR lenses, people will get more “intel-on-the-go” about potential matches. “When passing by someone who has double matched, or is viable and an exceptional date candidate, they will be indicated to them.” (A kernel of this potential revolution is already out in the world: Hakuna Live, one of the apps Match acquired in its Hyperconnect deal, features augmented reality avatars).

What’s more, Brooks thinks we need more “coaxing along” when we’re dating. AR, as well as “informed, tailored advice” from the dating service will deliver helpful nudges in real time, such as: “it’s been 20 days since your last date night, might be time for a date at <favorite venue>,’” he said. “I think the benefits of timely advice will outweigh the creepiness of having a computer act as an informed advisor.”