Tinder Taps Short-Term Subscriptions to Tackle Gen Z’s Commitment Phobia 

Tinder is tapping weekly subscriptions to capture the spending of younger consumers, who tend to be hesitant to lock themselves into longer-term plans.

The app’s parent company Match Group, which also owns Hinge, OkCupid, Match and other popular dating services, shared on a call with analysts Wednesday (Nov. 1) discussing its third-quarter financial results how Gen Z and millennials’ subscription behavior has informed the company’s membership plan strategy.

“We’ve learned from launching weekly subscriptions, that the younger generations Tinder primarily serves have more of an affinity to lower price and shorter-term duration products that we had initially anticipated,” Chief Executive Officer Bernard Kim explained.

President and Chief Financial Officer Gary Swidler added that the company views these weekly plans as a “long-term win,” rather than “some short-term thing,” and that the company has been testing weekly subscription models on others of its dating platforms in addition to Tinder.  

“Younger users … [are] comfortable at the higher-priced, but lower duration packages, and so that’s what we’re delivering,” Swidler said.

Indeed, Gen Z tends to have a shorter subscription lifespan than older consumers, according to PYMNTS Intelligence’s study “The Subscription Commerce Readiness Report: The Loyalty Factor,” created in collaboration with sticky.io, which draws from a census-balanced survey of more than 2,000 U.S. consumers.

The study found that a plurality of Gen Z consumers are shorter-term subscribers. Specifically, 10% of “short-timers,” those who subscribe for just 14 months on average, were in this generation a greater share than any other lifetime value (LTV) persona group. Plus, the same study found that Gen Z was disproportionately likely to cancel their subscriptions because they deemed the subscription unnecessary.

Subscriptions have become a significant part of Match Group’s business strategy, contributing to record total revenue and Adjusted Operating Income (AOI). Tinder’s direct revenue reached $509 million, up 11% year-over-year, driven in part by these weekly subscription packages. [other brands]

“Not only are the weekly subscribers helpful from a revenue accretion standpoint and [a revenue per paid user] standpoint, but that they are positive on an LTV basis,” Swidler said. “We’ve been monitoring the renewal rates and the resubscription rates of these subscribers, and that’s been meeting or even exceeding our expectations.”

Speaking to the Tinder Select membership, the app’s $499/month, invite-only program, Kim noted that, so far, the invitation count remains “at a very low level,” but the app will issue more in the future. He noted that Match is “optimistic about the financial potential of the product,” expecting “tens of millions of dollars of revenue in the next year” from this membership. (To reach $10 million, 1,670 users would have to subscribe for a year or the equivalent.)  

Looking ahead, Match Group sees opportunities for further monetization and payer penetration. The company is exploring ways to increase monetization by revisiting its à la carte portfolio and targeting international markets for greater penetration, with plans to leverage AI to enhance the user experience and expand the dating category.

Swidler noted that the company is looking to AI “to drive new sources of monetization, resolve user pain points to increase our product’s value, and potentially build new apps that can deepen our TAM [total addressable market] penetration.”

The post Tinder Taps Short-Term Subscriptions to Tackle Gen Z’s Commitment Phobia  first appeared on PYMNTS.com.