Average Paid Dating Site subscriptions per user fall 25% in 6 months.

In the summer I ran a massive survey in the US asking users what dating sites they were paying for and how many dating sites they were paying for over 300,000 users responded.

1.  In the summer  15.04% of my users were active paying members elsewhere.    In a poll that ran on the weekend  16% of my users are now paying elsewhere. (might be the huge valentines/new years bump)

2.  In the summer paying  users said they had 1.306 active paid dating subscriptions that number has now fallen to 1.245 a fall of 25%

So what does it mean?    The top 5 paid dating sites are getting bigger and all the other paid sites are getting smaller,  which is pretty much what hitwise is showing these days….

36 Responses to “Average Paid Dating Site subscriptions per user fall 25% in 6 months.”

  1. Stever Says:

    What effects do you think the quick freeze recession are having on the paid dating sites? Particularly in the US and UK where they are hardest hit by recession wories, job cuts, foreclosures, etc..?

    The bump from 15% to 16% in your survey may very well indeed be influenced by valentines ans some lingering new years effects. 1% change may just be statistical variation too.

    Saw a piece on CBC about LavaLife and CEO was saying it is recession proof business. Love is a necessity like food. But are people as willing to dish out the money at times like this? VS the free options out there. Some may say they are cutting back on nights out at night clubs to meet people and instead spending online at dating sites??? Or is it a frivolous expense on the credit card they are thinking twice about?

  2. Michael Says:

    Gotta agree with Stever. Right now, in the U.S. anyway, it’s not a good time to be spending money. Nearly everyone I know is saving every bit of disposable income they have. Gone are the usual dinners, shopping trips, trips to Vegas, etc. They can afford this stuff, it’s just that they can’t trust their employers. Layoffs are everywhere and they’re just playing it safe.

    Couple this trend with your previous article on your user demographics (apparently you don’t have too many young ones using POF) and it might explain what you’re seeing. The older crowd (the ones with real jobs) are holding onto their money tightly in the event they’re laid off.

    I think it’s temporary. As soon as the layoff storm passes, that crowd will be back spending again.

    The irony of this situation is that the companies bring it on themselves. They lay people off and all the media attention that entails… and then complain that no one is spending to buy their products/services.

  3. casualencounters.com/blog Says:

    It’s the oldest truism in the book: entertainment industries are recession-proof. It looks more like there’s a redistribution of pie than that the pie itself is getting smaller. When people have less to spend, they’re choosier about how they spend it. So the big 5 get bigger pieces and everyone else will be left to feast on the crumbs.

  4. Jim Says:

    I really enjoyed reading your article about the “Paid Dating Websites”. Ill be upfront and admit that I am a member of PlentyofFish.com and have actually met a number of people through the website. I really enjoy the fact that it is 100% free. I have used other websites, but found their “Fake User” bait and switch tactics to become old and lame. Keep up the good work with PlentyofFish.com and good luck in the future!

  5. Rob Says:

    Markus, I have an idea for a website that is simple yet would be profitable beyond my imagination. I have lost several nights sleep trying to figure out how to put my vision to an actual site. I have the ideas but not the expertise or knowledge to make it happen. I am afraid that if I don’t launch this correctly that a huge opportunity will be missed. I don’t want to go into much detail until I am sure you are interested in a partnership on this project. I have read a couple of articles about you and you seem to be the person that would best be able to help launch this idea into reality. Please contact me. I think this idea could follow the rule of 6 degrees and become viral.

    If you team up with me I have a plan that will have you considered a modern day genius. Your celebrity will rise exponentially and you will be the hottest thing on the internet over night. Do you want to take away market share from one of the biggest players over night?

  6. casualencounters.com/blog Says:

    Does anyone know of a site where I could find accurate details on the size of the major players’ databases?

  7. Matt Mihaly Says:

    A drop from 1.306 to 1.245 is a 4.7% drop, not a 25% drop surely.

    –matt

  8. markus Says:

    We are only looking at people with more than 1 subscription so its .306/.245

  9. Amy Harrison Says:

    Isn’t this a common trend with online business anyway that after a few years, in a common industry (so setting aside niche dating sites) you get a runaway crowd of 4-5 big online players who tend to then gobble up market share until a new version of the business comes along to intorduce new methods and challenge the wya things are done?

    I worked on online start ups in the UK and in every industry we looked at from property, mobile phones, gift sites, the top 5 players, whilst they can be complacent, do enjoy a snoweball effect of market share for a run until things change.

    What would the future of dating be? Something even more immediate and twitter-esque? lastminutedates.com?

    just a thought. good post Markus!

  10. Amy Harrison Says:

    meant to say “whilst they CAN’T be complacent” – apologies.

  11. Ronnie Kats Says:

    Hi Markus, you are an inspiration to many.My question and im sure several would love to know if there was another online idea you would want to build, what idea would it be and any other ideas?
    thank you
    RK

  12. pastfirst Says:

    An interesting post.
    Just shows how the recession is sending the smaller businesses for a loop!

  13. amtash Says:

    I run a small non-niche North American dating site and our subscriptions and conversions have not decreased despite the recession…they have increased while we have not made any major changes or increased member acquisition.

    I agree that the bigger sites are increasing market share, however, I believe that despite traffic and subscription rates increasing through the recession, users are simply being more selective in terms of which site(s) to subscribe to.

  14. Rob Says:

    Ok, I see that Markus is not interested in hearing my idea. I know you must get hammered with ideas none stop and sooner than latter you figured out that you can’t respond to all the brainless get rich quick ideas that must come your way. I ask you this or anyone else that may have time to respond, where do I start? I need to find someone who can help develop the site that has a true understanding of how the marketing side will best succeed. I have thought of several different directions that I can take this and I need someone that has experienced some success already and will be able to help lead the direction of the project to maximize its success. I could roll it out half assed and pull in a few million but if it is done right I can really build it to last. I will also need someone with experience in business law to make sure that the site is well protected with the necessary disclaimers and issues that are sure to arise when you start to take market share from a big player. Should I approach new graduates or should I post on MONSTER for talent? I also need to know how I protect my idea once I share it with someone. What can I do to keep someone from walking away with my idea once I share it with them.

    Thanks

  15. Vickie Says:

    Well for starters Rob, you would need to have them sign a legal document that says they will respect your idea and not steal it basically. I really liked talking with Top Flight Marketing and he was ready to help me but the I couldn’t afford his full package deal and he didn’t have smaller options.

    Markus, What an inspiration!!! Perhaps I’ll have some of my older kids sign up on your site and they can tell me how it goes. I suggested I buy my oldest a subscription to eharmony and she said NO! I’m not that desperate🙂 I’ll have to ask her her opinions about a free service.

  16. casualencounters.com/blog Says:

    Rob, check it: http://inventors.about.com/od/nondisclosure/Non_Disclosure_Agreements.htm

  17. Rob Says:

    Thanks Guys, I will take a look.

  18. Robert Says:

    The general consensus from people on your blog appears to be that it’s going to be a quick recession. I would argue otherwise and you may want to consider the implications of a much larger level of turmoil. For instance, I wouldn’t suggest you follow through with your intent to purchase a paid site. People WILL be fleeing them when things get worse. Which I believe they will. No one seems to be paying attention to the numbers at all. Everyone has teenager syndrome, they think they’re invincible. They’ll find out otherwise eventually.

    We have somewhere in the neighborhood of 500 trillion in so called “toxic” assets floating in the world financial markets. The entire world would have to spend it’s entire GDP for 10 years to correct these assets. Obviously not going to happen. We’re seeing a new beast right now, this is not just limited to the US, it’s global this time. We’ve got uprisings and riots in Eastern Europe and overthrown governments in some places. All sparked by financial turmoil. The more developed countries may think they’re immune to this kind of unrest but they’re not. I’m sure the Romans thought their Republic was bullet proof too.

    Where am I going with this? I’d stay away from purchasing interest in paid sites, as the world economy changes in the coming years the Internet will be dominated by free sites due to financial unrest and uncertainty.

    What I would be doing right now if I were you is trying to figure out a way to capitalize on your user traffic through marketing or some other innovative business model in order to make money while people are still willing to pay for advertisements.

    Just my two cents.

  19. twilightpad Says:

    Robert, I don’t think it will end soon. In fact, i think it will last a while and I agree with much of your analysis. I also think Marcus shouldn’t go into the paid dating realm, but maybe for different reasons.

    Money is not the issue. He made enough to be able to close POF tomorrow and just bum around the beaches of the world for a long time.

    I think he’s going thru some sort of identity crisis. He already “owns” the free dating scene, but for whatever reason, that’s not good enough. Increasing costs to accommodate an increase in users may also play into it. He mentioned that on an earlier post.

    But instead of finding a way to reduce the increasing incremental costs back to a level where he was more profitable (ie. 2-3 years ago?), he’s focusing on entering a new, but related arena: paid dating.

    There are too many variables in that scene that he’s going to have to deal with, which he may or may not be prepared for. It’s an unknown, to some degree.

    What he has now is known. I’d capitalize on that.

    I’d treat this as an optimization problem, for lack of a better analogy. I’d get radical. Database getting too big or hard to manage? Just slice that thing in half. Get rid of old records. I’m sure there’s a lot of old crud there from users that will never return and are long gone. They either found someone or don’t like POF. Either way, no loss to Markus. The worst that can happen is they try to login and find out their account is gone. No big deal. They’ll register again. POF isn’t Facebook or LinkedIn. Their ID there isn’t precious — it’s to find a date.

    Will this alienate some users who decided to return after not being on POF for over a year or two? Maybe. But let’s put things into perspective. POF is free. This is the “price” they will have to pay for not using the site for a long time. Regular users won’t face the knife. Markus just has to decide on the definition of a regular user.

    Not knowing more about his technical setup or the true nature of his incremental cost problem, I estimate this will bring his DB to a state that might have existed a few years ago. This may not totally solve his incremental cost problem, but he can do this, and then revisit other areas that do represent the increment cost problem.

    He’s also got forums. Slice that in half, maybe more. He’s not running the Wayback Machine. A post on there from a few years back has very little value beyond sentimental value from the original poster. Dating is about the present, or the future, but definitely not about the past. The forums are a way to mingle; they’re not a historical archive of the site itself. I just took a quick peek and the home page of the forums and it shows “page 1 of 325”. Trust me….no one is going to browse page 121 much less page 41.

    Bandwidth costs may be a harder problem. Those are current costs relative to the users using the site now. Lower traffic would solve that, but that’s not exactly the desired solution. Given the current economy, maybe he can negotiate a better deal. I’m sure the CDN he’s using now would hate to lose him as a customer. POF is pretty big and whatever he’s paying represents recurring revenue to the CDN. I’d at least look into that.

    Ditto with hosting. That’s a commodity. Peer1, if he’s still with them, would be sick to let recurring revenue walk out the door.

    Saving 10% on the CDN and 10% on the hosting is a nice 20% increase in revenue. Trimming the DB might mean needing 1/2 the hardware for that, or forgoing future planned purchases. I’m pulling numbers out of the air, but the general thought process seems sane — optimize what you have. Marcus knows how to do paid dating. The challenge: do paid dating “better”.

    An important variable I didn’t mention was the revenue side — Adsense. Yeah, that tanked pretty bad recently. Without revenue, controlling costs is somewhat academic. Admittedly, I don’t have an answer there. If the revenue side is so bad with little hope for the future, then I could appreciate his dilemma. Only Markus knows.

    That, in the end, may be the entire reason for him considering paid dating.

  20. jll Says:

    I found the next big thing! haha

  21. jll Says:

    oh and i had to say-did you know you have an advert saying that plenty of fish is no good??? It’s also the only one i’ve clicked on since i joined the site months ago and im sure it has a good CTR.
    http://datingonlinereviews.co.uk/flirtbox/index.php?t202id=1458&t202kw=ukdating+728_7(dating)&gclid=CMe4vrzp6pgCFQ0zQgodeHYv2Q

    I could have told you about your bad choice in advertisments 5 months ago! Adverts sending traffic to other sites? Thats just obviously mot a good idea, esp when they are prob the site thhat users decide to pay for!
    maybe advertise (and perhaps swallow your pride)
    Just my 2 cents
    But sincerly…
    congratulations on your success

  22. Robert Says:

    I forgot to mention, as another income stream you may want to look into implementing a micro-payment system like some online gaming platforms are doing. Something along the lines of maybe premium size photos 800×600 for $.50 or any number of other services that are completely optional that can be purchased for extremely small payments. You’d be surprised the kind of income that can generate on large scales.

  23. Rob Says:

    Jill, I have 3 investors right now that I am negotiating with that are willing to sink big money into the project. I am in the bidding process right now. As long as I maintain 51% and keep control of the creative side I am happy. Why do you think I stopped following up on Markus. I just thought that he was extremely marketable and has been through the trials and errors already and would have been a great partner for this project. He has made the mistakes and had the success. I am sure he thinks everyday about how if he only did this or that different. Having this type of experience is invaluable when you are on top of something big. The hard part is coming up with something to apply it to. Once everything is up and running I will be sure come back and post. The time line is for the summer right now.

    Do you really think that the next great idea doesn’t exist? Come on! We are in the age where all information is at our fingertips and the audience is easier to reach than ever before. You just need to know what advertisers and people are looking for that they aren’t getting right now.

    I think we all can be sure that this idea will not come from you unless you change your outlook.

  24. xyz Says:

    Jill, your affiliate site sucks.

  25. Selectii Director Web Says:

    Good Point, i’ll look into this problem some more, cause it seems so interesting!

  26. digeeU dating Says:

    To me, it is understandable that the paid users are disappearing. Most of the big 5 don’t offer anything that is money-worth except the matchmaking ones, i.e. eHarmony and some others. Most of big 5 are just like POF. But they charge money because they have tons of traffic, for which a great number of users are paying for. However, similar faces show up on all the free dating sites (niche or generic one, like POD), so as a user who doesn’t read profiles, prefers phone conversations rather than emails, and is less serious about finding the right one, POF is definitely a better option than the big 5.

    To me, online matchmaking definitely has a big market, but for generic dating business, POF and it’s alikes are winning out. The big 5 needs to work on it’s product side before getting killed by the free-dating business model.

  27. casualencounters.com/blog Says:

    Micropayment options for bells and whistles are a really good idea. Facebook seems to be doing very well on that front. I can’t believe that people use them, but go figure.

    Every day I repeat to myself “your audience is not like you.”

  28. Online Dating Insider Links for Friday February 20, 2009 Says:

    […] A­ver­a­ge Pa­i­d­ D­a­t­i­n­g Si­t&#173… […]

  29. Vancity Says:

    Hello Markus,
    I was wondering if you can shoot me an email. I am in Vancouver as well and would like to speak to you further outside of this forum. I will not be wasting your time as you will see from a return email.

  30. Lisa Says:

    Marcus, you moved the events link to the bottom of the page on your site. This has seriously hurt all the POF event where people meet. Please move it back to the top where it dislpays automatically. It is unfortunately too difficult for most POF members to click on the link & then look at upcoming events.

  31. jell Says:

    One quick tip.
    Send your users an email about how to spend les money dating. The common thought is that dating is expensive and thats why people aren’t using the site.
    This is just one thing you can do.

  32. jell Says:

    Hey Markus,
    If you want to hear my idea then contact me. I’m certain it will be huge and i could use your help. I won’t chase you though because if you miss it, it’s your loss aswell.

  33. Online dating Says:

    Fantastic post, very much useful, I am going to subscribe your blog. Thanks

  34. Fish Killer Says:

    Hey Marcus what are you doing about the serial killer on your fish site that has been killing women. How is it that its not all over the place yet. Your system sucks and it can not stay free forever. You will be forced to charge a fee to stop these maniacs from killing again. I recommend a paid service. Marcus is only init for the money the ads provide for him. I have met marcus in person years back and he really needs to do something before he finds himself in a bad place.

  35. Medical apps Says:

    SO when this recession is going to end.

  36. Automotive technician Says:

    Fine put up! Rather entire together with element info. That?s what you need! Congratulations!

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