So how do free dating sites measure up against subscription dating sites? Mmm, not so good when it comes to revenue.
Take for example two dating sites with equal traffic. A free sites revenue from ads vs a paying sites revenue from subscriptions doesn’t stack up. If any of our World Singles sites had the traffic of Plenty of Fish, I suspect that we would make more than three times his current revenue of 300k a month. The subscription model, when traffic is equal, is superior. The same is true for Social Networks. MySpace for example, makes peanuts compared to sites with similar traffic ranks like Yahoo which generate ad and subscription revenues.
Social Networks will in time increase their revenues by increasing their cpm rates (widget, brand marketing) and more importantly by offering their large and diverse member base premium/subscription services; not so sure that that the potential for a free dating site to monetize traffic is as rosy. For starters, most of the revenue on free sites come from paying dating sites choosing to display their ads on the free sites. In the face of stiff competition and slower growth, paying sites are more frugal with their budgets for acquiring new members (hence, cpm for free sites will not be as high as they would of been several years ago when paying sites readily spent $20 or more per profile). Secondly, dating sites are one dimensional in that they are strictly for singles. Social Networks appeal to both singles and non-singles — it’s like comparing the scalability of hot dog shop (dating site) to that of a food court (social networks); the food court is clearly more scalable and potentially more profitable.
“All of the big guys think users want to pay for dating because paying for something equals quality,” says Yagan of OkCupid…until free sites can provide solid customer support, quality screening of profiles beyond just blocking blocks of ip addresses and offer robust search functionality that allow members to find what they are looking for, free dating sites will not be on the same playing field as the paying sites. I believe that hybrid free/paying dating sites that address the aforementioned are the best positioned to shine and compete with the paying sector. By virtue of charging, paying sites are generally attracting more serious minded singles than those found on Plenty of Wish and other free sites; hence more thorough, “quality” profiles. That said, there is room for both free and dating sites to thrive. Levels of serious daters can be summarized by their participation on social networks > free dating sites > paying sites.
A free to use site with the option to upgrade provides a winning combination. Such sites have a larger revenue stream to provide superior features and customer support. Having the most important features free, allows the site to grow its membership base while still effectively monetizing the traffic.
With online dating and social networking closing in on each other, serious daters are “social dating” through the process of posting blogs, forum discussions and more. You can really see a personality come through the screen when you can see how someone commented on a particular subject.
Sites like Matchdoctor.com are making this possible, a new generation of dating site.
Thanks for the comment Jon.
“With online dating and social networking closing in on each other”
How do you feel that they are “closing in on each other”? As I see it, they are actually on path to further differentiating themselves. Paying sites, with Match leading the way, will offer higher end services for the serious dater who is willing to spend money to meet his/her match. That said, I do agree that a free/paid hybrid is a better way to go than the purely free model.
Peace.
-S
I agree with Jon, offer the quality if required and let the rest without the cashola drive all of the decent women away!
Its all about quality and relevancy and sites like Plenty Of Wish will continue to ignore the long term (especially having a name like that). Sad part about it is that Marcus could change up but I think he’s probably gone that step too far blowing his own trumpet on his blog.
I’m all about the new DefectorOne mantra;
‘If you want something enough, you’ll pay for it’
Lets all do our very best to give them what they want!!
Indeed “DefectorOne”, indeed. Thks for the comment.
Peace,
-S
Just found this post. Quite interesting. I believe you are right. The biggest challenge is finding an equilibrum between free and paid services.
Can anyone recommend a subscription membership based software for a small business owner?
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I couldn’t understand some parts of this article, but it sounds interesting
It’s amazing, I was looking for answer to this question- and guess who had my answer!! Thanks for this wonderful post and would love to discuss this further!