Match Group has managed to prevent Tinder 'cannibalising' its other dating sites
Some investors and analysts had been worried about cannibalisation - users being shifted from one Match-owned app or website to another. And the dating app that was expected to cannibalise the others was Tinder.
Tinder is hugely popular - Match said in its earnings report that it has 1 million members of its paid "Tinder Plus" tier that offers extra features. And JPMorgan said in an analyst note published on Wednesday that Tinder likely has over 25 million monthly active users in total.
Some analysts feared that Tinder's growing dominance over online dating could actually hurt Match. After all, many of the companies in its portfolio are competitors to Tinder, such as OKCupid and PlentyofFish.
Back in 2015 BTIG analyst Brendan Ross wrote that "the better that the free Tinder product (or other similar products at scale) becomes, and the more it appeals to a wider base of daters, the less likely daters are to convert to become paying subscribers of legacy Match Companies."
Ross went on to argue that Match's non-Tinder assets were already seeing growth stall, which he put down to cannibalisation from Tinder.
However, Match's earnings on Wednesday showed that the company has managed to avoid cannibalisation by growing Tinder's rivals as well as the app itself. Overall revenue came in at $285 million (£197 million) in its first quarter, which beat expectations of $282 million (£195 million.)
Greg Blatt, chairman and CEO of Match Group, said in the first quarter earnings release: "Match Group posted very strong revenue and Adjusted EBITDA growth in the first quarter, driven by exceptional growth at Tinder, solid performance of Meetic and Match, and the PlentyOfFish acquisition."
Bank of America Merrill Lynch explained that "even without Tinder, Match would have grown its core Dating subscribers by 6% (up from about 1% last quarter) and its Dating revenue by significantly more." It went on to say that "since Tinder's launch in 2013, there has been no discernible cannibalization of its Core."
Axiom noted that cannibalisation is an ongoing risk, though. But it speculated that Tinder could come up with an easy solution: advertise other Match dating services in Tinder.
Tinder has grown rapidly and we expect that it will continue to grow at a fast pace. As such, we expect that Tinder could drive subs away from the core Match brands. However, we expect that Match will use the Tinder platform to advertise other dating sites. That should serve to offset part of the pressure on the core business from Tinder's growth.
- Samsung’s batteries are reportedly swelling up – here’s everything you need to know
- Torrent Pharma to acquire Curatio for Rs 2,000 crore
- Market in the grip of a bear hug: Nifty50 trades below 17,000 points, rupee hits a new low
- FM urges I-T officials to expedite returns, refund process and grievance redressal
- Razorpay forays into loyalty and rewards segment with PoshVine acquisition