It was a slow-ish news day today, so the talk of the town was Tinder’s new $500-per-month plan. Like other “zero-interest-rate-policy” (ZIRP) darlings, the company’s parent, Match Group, has struggled to keep public market investors happy in a post-pandemic world. 😓
Growth has slowed significantly, so the company is betting big on premium “power users” who will pay $500 monthly for features like exclusive searching and matching. Tinder Select is currently only being offered to less than 1% of users among the app’s most active. But don’t fret; it plans to open up applications on a rolling basis, so you’ll still have a shot if you didn’t make the first cut.
While it sounds wildly ridiculous to most, Match Group has previously experienced success with high-priced subscriptions. Its 2022 acquisition of an invite-only dating app for ambitious career-oriented singles, called The League, charges $1,000 per week for its VIP plan. And the strong results from that program inspired the higher-priced tier for Tinder (and other apps in its portfolio). 💸
Executives hope this “low-hanging fruit” can significantly impact revenue and potentially margins. Its competitors already have higher-priced tiers to monetize their most active users further, so in a sense, it’s essentially playing catch up here.
Match has experienced subscriber declines in the last three quarters but managed to grow average revenue per user YoY. If users aren’t growing, Wall Street at least wants to see the company make more from its existing base. And this new product tier should help accomplish that. 🔺
Whether or not it’s enough to “match” investors back with its stock remains to be seen. $MTCH shares are down 60% since separating from IAC in mid-2020, drastically underperforming the Nasdaq 100. We’ll have to wait and see if investors keep swiping left on the stock in the quarters ahead. 🙄