Dating App Downloads Experience Slowing Growth on Valentine’s Day
Valentine’s Day might be a time for celebrating love and romance, but the dating app market is not experiencing the same level of enthusiasm as in previous years. According to a recent analysis by app intelligence provider data.ai, global downloads of dating apps saw a meager growth rate of just 1.9% year-over-year as of January, amounting to 128 million installs. This is in stark contrast to the 29% increase observed during the same period the previous year. The situation in the United States is no different, with a mere 2.38% year-over-year increase in January 2024, reaching approximately 12.7 million installs, a decline from the nearly 16% growth recorded in January 2023.
While any growth might be viewed as a positive sign for the industry, there are indications that the dating app market is losing momentum. Match Group, a leading player in the sector that operates popular platforms such as Match, Tinder, Hinge, and OKCupid, reported a 5% decline in its total number of paying customers compared to the previous year, as revealed in its fourth-quarter earnings report released in January. The company had already witnessed a 6% decline in paying customers for its flagship app, Tinder, in the prior quarter, which led to a significant drop in its stock value.
Tinder’s paying customer growth has also been slowing down, with an 8% year-over-year decrease in the last quarter, resulting in 10 million paying users, according to the company’s shareholder letter. Despite beating expectations in terms of fourth-quarter earnings and revenue, with the latter experiencing a 10% increase to reach $866.23 million year-over-year, Match Group seems to be capitalizing on squeezing more revenue from a shrinking user base. The introduction of a high-priced subscription called Tinder Select, priced at $500 per month, aimed at matching subscribers with highly sought-after profiles, exemplifies the company’s strategies to maximize profits.
In the United States, one of the largest markets for dating apps, only 3 in 10 adults reported having used a dating site or app, based on a report by Pew Research in the previous year. This figure has remained unchanged since 2019. Moreover, although one in ten American adults claimed to have met their partner through a dating app or website, the broader success of these apps in facilitating long-term partnerships is questionable.
A recent analysis of U.S. Census Bureau data revealed that a record number of 40-year-olds, accounting for one-quarter of the population, have never been married. This marks a significant increase from the 6% recorded in 1980. While this shift may be attributed to various factors such as societal acceptance of unmarried cohabitation and the inclusion of same-sex couples in marriage statistics, it does raise doubts about the effectiveness of today’s dating apps. Notably, 44% of U.S. dating app users claimed to turn to these platforms to find long-term partners rather than engaging in casual relationships.
Furthermore, Tinder’s dominance in the U.S. dating app market seems to be slightly declining, as indicated by data.ai’s latest report. Although the app possesses the largest market share among its competitors, amounting to 29.3%, this figure has dipped from 29.8% compared to the previous year.
On the other hand, Bumble’s market share has experienced a decline from 17.6% to 14.3% year-over-year, placing it in the second position. Interestingly, the Other category of dating apps, which encompasses smaller companies and startups experimenting with new models, has grown from a 27.4% market share in January 2023 to 29.2% in January 2024. This suggests a growing desire among dating app users for fresh and innovative options.
Despite the current challenges, the dating app market still presents investment opportunities. Match Group’s success in generating substantial revenue when effectively monetizing its platforms serves as an example. In January 2024, dating apps generated a record $505 million in revenue, even though the year-over-year revenue growth slowed to 8% from the previous year’s 17%.
Looking ahead, Match Group plans to leverage artificial intelligence (AI) to enhance the user experience. Areas such as photo selection, matching capabilities, and post-match guidance are expected to benefit from AI-driven features like conversation starters and nudges. However, the use of AI in dating apps might also lead to an increase in AI-powered romance scams and other fraudulent activities, as warned by security firm McAfee.
Ultimately, the future of the dating app market remains uncertain. While the industry continues to grapple with slowing growth, it endeavors to adapt and evolve through the implementation of AI technologies. Whether these advancements will reignite user interest in dating apps or further complicate the landscape is yet to be seen.
