Tinder Social Marks a New Beginning for the Company and Its Users
Mobile dating app Tinder launched its newest feature on Thursday, marking the end of an era. Instead of focusing on matching with one-on-one partners, it's setting its 50 million users up with potentially burgeoning social lives.
Tinder Social went live on Thursday, giving users the option to start groups from their Facebook (FB) - Get Report friends to connect with other groups in the area. Instead of "swiping right" or "swiping left" for yes or no, you and your group of friends can swipe through other groups to get together.
The feature comes amid the widespread success for Match Group (MTCH) - Get Report the app's $3.9 billion parent company that also owns OkCupid, PlentyOfFish and Match.com. But analysts say Tinder has sustained itself, even after the initial hype.
In a note on July 18 Barclays analyst Christopher Merwin noted that in the Apple (AAPL) - Get Report App Store, Tinder ranked 15 in the second quarter of this year, as compared to the first quarter's rank of 18. This move higher in downloads could be "driven by an increase in revenues through a combination of additional [subscribers] as well as increased purchases of a la carte features which rolled out to the app last quarter," the note read.
These "a la carte features" refer to Tinder Plus, the app's loyal subscription base, which started in February of last year. The $2.99 per month (a starting price depending on which features you want) subscription generates significant revenue for a company still trying to create a sustainable business model. After all, the suspected goal of the subscribers is to eventually get off the app.
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Axiom analyst Victor Anthony said when Tinder was first launched, there was certainly a "boom," but the money, or its users, haven't dwindled as analysts expected.
"It expanded organically very quickly and I think it's still growing, as well as the user base, so that still continues to work," he said.
To secure more long term revenue, Anthony said the company is slated to launch advertising in 2017, so the rest of the year will still largely ride on Tinder Plus subscribers.
"I think they've done a phenomenal job of monetizing their product through subscriptions, and they've set their own pace to double that subscription level in 2016 so that's a positive," he said.
Anthony said the possibility of new features like a search tool or more specified dating filters could be on the horizon.
Tinder Social was launched in beta in Australia and is now live in the U.S. and India -- a large base of its users and subscribers, Anthony added. Things like "unlocking" the feature were discussed in beta.
The app works in a way that allows users to add friends via Facebook, so if you unlock Tinder Social on your account, you can see which of your friends is on the app (for better or for worse).
If a member of your social group swipes right on another group, then you'll be redirected to a chat, where all the group members can talk about future plans to meet up.
This past May, the Dallas-based company said its subscribers jumped 36% to 5.1 million in the first quarter, which ended March 31. The company recorded a 24% increase in revenue to $260.4 million.