Online Dating A Billion Dollar Global Industry In Decline?
by Maxine Clark
It's been estimated that the online dating industry revenue has declined as much
as 20% - 30% over the last 12 months. Customer acquisition costs have gone up
and revenue has gone down Where are the people going and are we seeing the end
of the subscription based dating service? This revenue slide in the online
dating industry can be attributed to several easily identifiable factors.
Quality and user experience is first and foremost for any dating site, the issue
that sites face is getting a balance of members and a ratio of men to women on
mainstream and adult dating sites that will in turn deliver value to paying
members. Keeping this balance in check can be a challenge for any dating site to
make money online you don't need many female members in your database but to
deliver a good user experience you do. Men far out number women on most dating
sites and for the first time paying member this all looks fine but if they don't
get any satisfaction on the first upgrade they may not renew a second time. If a
user has a bad experience on a dating site and feels they have lost money
chances are they will not recommend the service to their friends. Reputable
dating sites will monitor their database carefully and often have some type of
profile verification system in place to help ensure a quality experience. Often
members uploading information about themselves are at best very bad when it
comes to marketing themselves online, this can also lead to less then
satisfactory results.
Industry fragmentation - The mainstream players are established and the online
dating industry is heavily saturated, the industry is now fragmenting into niche
markets with free dating and social networking sites where people can interact
and make contact without getting out their credit card. The free business model
has clear revenue alternatives to subscription based to an advertising based
revenue model such as PPC that does not burden the users with ongoing charges
and can often help the "viral effect" of the site. Paid sites can expect to
loose about 30% of their base on a monthly basis depending on their market
sector. With a free social networking site members can enter and exit at will
without charge and recruit friends without the stigma of being on a dedicated
"dating site" Users can maintain a membership over a much longer time frame even
if they are in a relationship. Speed dating has also become very popular and
gives users another hands on alternative to subscription based dating sites.
Paid dating services won't vanish overnight but the big free community based
sites are on the rise.
Anyone faced with the challenge of starting a new paid dating site under current
market conditions will need to understand considerable investment would be
required in order to gain market share, viral marketing will be difficult due to
the industry saturation factor unless there is something very unique about the
site or application. The large established market leaders have money to burn and
established affiliate networks in place that deliver low cost customer
acquisition, add this to reoccurring revenue and new comers to the paid dating
industry are facing an uphill battle as the industry competes more aggressively
for customers. Small companies with minimal staff and overheads have proven they
can compete for traffic in the big league and offer the users exactly what they
want without charging, these companies can provide a free fully featured service
and make a very generous income at the same time. The advertising based business
model has little downside and a big future.
About the Author: Maxine
is an expert on the online dating industry and has been involved for 5 years
http://www.casualdate.com.au/sexy.
Source of article:
www.goarticles.com
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