If you’ve ever downloaded the Tinder app, you’ve probably thought about how great it would be if this were a business model for your product.
Whatever the case, online dating is a massive business, and Tinder is one of the most popular applications among Facebook, Bumble, and other apps. One of their most significant advances was the use of gamification ideas (play).
Tinder is a small app, but it’s made $1.4 billion in revenue. How? Let’s use the revenue model to show you how your product could make $1.4 billion with the right monetization strategy.
What is Tinder
It is possible to find love using this app. This dating app connects people solely based on their geographical location.
To “like” or “pass,” users swipe right or left using a swipe interface that this company created and patented. If two users have mutual admiration for one another, the app considers them compatible and allows them to communicate through the app.
The app’s official launch was in September 2012. It was discovered by a large number of people, including Sustin Saateen and Clean Rаd, who were only 14 years old at the time.
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Tinder Business Model
Tinder’s revenue model facilitates matches between users and charges the businesses that want to reach those users.
The revenue model is the most profitable of any dating app. Tinder has the highest number of active users of any dating app, and the revenue generated is where it all started by making people pay for extra features.
Tinder’s revenue model is based on 3 main components:
- Premium Features: Tinder Plus (their premium service) charges users monthly to access more features like unlimited swiping, extended matching (30 days), unlimited likes, top swipe privileges, and more.
- Sponsored Profiles: They use paid sponsorships to drive relevant content to its users. It essentially converts its users into an audience exposed to advertisements from the advertisers who sponsor the profiles in their feed.
- Direct Messages: They allow businesses to send messages directly to their users who have “Liked” them through Sponsored Profiles or Premium Features.
The team has managed to create a winning business strategy. The strategy helps make money and keeps its customers engaged with a wide variety of features and functions available for purchase on the platform.
How Does It work?
Once users download the app they sign in using Facebook and create a profile. They can swipe left or right to match other users. When a match happens, they can message each other on the app.
The opportunity here is to get users to start using the product, then upsell them. Therefore, it was charging $10 per month for an ad-free version of the app.
Moreover, it is similar to a freemium model — not everyone will pay for your premium features, but you’ll still make money from a portion of your user base.
Once you have enough users paying for premium features, you can add additional paid features that complement those free ones. For example, if you sell products on your website and want to boost sales and conversion rates, create an app that lets users browse your products when they’re away from their computer — and charge them for it.
How Does Tinder Make Money?
Tinder’s money comes from two main sources: a small percentage of the monthly membership fee and the sale of in-app purchases like Super Likes.
Here are the ways how Tinder makes money (in 2022)
If you want to make money with a dating app like Tinder, you will create a revenue model that works. Here’s how Tinder does it.
Freemium: Tinder used to be a purely freemium service that allowed users to create an account without paying anything. However, after receiving funding from IAC (owner of Match.com), They introduced paid services; users can upgrade by paying a subscription fee ($9.99 per month). This revenue model is called “freemium.”
Advertising: Tinder has one of the most successful mobile advertising strategies ever created. In June 2015, they launched its first global advertising campaign with three different ads based on “masculine” themes, including “cuffing season,” “Swipe Right,” and “SWIPEalia.” Each ad was released in two countries at a time. The campaign was thought to be worth $1 million, but it produced 20 million impressions and 4 million video views on Facebook alone.
Super likes: When users swipe right on, they communicate their interest in a potential match and put themselves “in the running.” However, if they want to be more proactive in pursuing love, they can purchase an additional ” Super Likes feature.” It gives them an advantage over other users because it lets them know if their match is also swiped right for them.
The newest premium version, Tinder Platinum, costs $19.99 per month. It includes all of the features of the previous two versions, but it also comes with some additional perks that make this new level worthwhile for people interested in finding love.
Tinder Gold Subscription Service – For a monthly subscription fee of $14.99 per month, users can unlock previously exclusive features to Tinder Plus users, such as Rewind and Passport.
Tinder Boost – This service is an in-app purchase that allows users to be “boosted” to the top of the match list. You can purchase the boost with either cash or credit card, and it is available on both iOS and Android devices. The Boost was launched in late 2016 and has already generated more than $30 million in revenue since then. Revenue from this feature is expected to grow rapidly as more people learn about it and decide to purchase it regularly.
In-app Purchases: In-app purchases are a common way of making money with apps and games on mobile devices. The idea is that users pay for the content or additional features within the app or game itself. It includes paying for coins, gems, diamonds, etc., in gaming apps where you can use them to buy power-ups or other content/features.
One good example of an app making money by offering in-app purchases is Candy Crush Saga by King Digital Entertainment Limited, which makes most of its money through in-app purchases such as purchasing different boosters and additional levels within the game.
Tinder Plus is an in-app purchase that allows unlimited likes on profiles, five Super Likes per day, one Boost per month, and gives users the ability to rewind swipes – just like in the paid version. It costs $8.99 per month.
Blue Ocean Strategy
Tinder has capitalized on the blue ocean strategy by creating a new industry category with an entirely different value proposition than existing dating sites like Match.com.
Lean Start-up:
The Lean Start-up methodology is a scientific approach to developing and managing businesses that focuses on getting the desired product into consumers’ hands as quickly as possible. Does the Lean Startup method coach you on how to guide a startup? when to turn, when to persevere? and how to build a company with maximum acceleration. It is a guiding philosophy for new product development.
Aikido
The business model behind Tinder centers around using a competitor’s strength to get an edge over them (Aikido). This is accomplished through the use of swiping right and swiping left. Swiping right allows users to show interest in potential matches while swiping left indicates disinterest. Essentially, this is a game of hot or not played on a massive scale.
Tinder’s Profit and Revenue
Revenue models are a way to understand how a business will generate money. In other words, what is the company doing to make money? Revenues are ways that companies earn money.
The revenue comes from
- the sale of subscription services,
- advertising products and
- the sale of user information to third parties.
And while those three examples might sound completely different, they all have something in common: they all revolve around who users are and what they do.
What are the Tinder Business and Revenue Models?
It is, for the most part, free to use, much like other applications like Facebook. However, it has several revenue models that make money by adding value to the overall experience for its users.
So, What’s their business and revenue model?
Today I’ll answer your question by providing an in-depth analysis of the different revenue models used by Tinder and how you can use them for your business.
- Freemium (Upselling) Business Model: The Freemium (upselling) business model is one of the most common business models that we see online today. You can use it for both software and online dating services. The basic idea behind this model is that you use a free service or product to get more paying users on board.
It also uses this business model because they have a free version of their app and a premium version. Users will typically use the free version first to determine whether they like it or not before paying for it later on down the road. Software companies also use this same concept to make their initial release available at no cost while paying for upgrades.
- Software as a service (SaaS) model: Tinder makes money by selling access to their API and software development kits (SDKs) that allow third-party developers to build additional features through the app.
- Transaction-based revenue models are based on in-app purchases made by users on the platform. For example, one can purchase premium services like Super Likes and boosts, connecting with potential dates.
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Tinder FAQ
Where is Tinder revenue from?
The vast majority of Tinder’s revenue comes from in-app purchases for Tinder Gold and Tinder Plus, which offer additional features to make using the app more convenient. It also makes money through advertising.
Does Tinder turn a profit?
Tinder is profitable, but it’s not yet clear by how much. As of 2018, its parent company Match Group reported $1.7 billion in revenue and $400 million in operating income. The company didn’t disclose exactly what portion of that came from Tinder, but it was assumed to be a significant amount because it is one of its most popular apps.
How did Tinder make money when it was free?
Before it introduced premium subscriptions, Tinder made money the way most free dating apps did: advertising. It partnered with brands like Bud Light and McDonald’s for branded content and messaging campaigns. The dating app also offered a “Boost” feature, which would increase the visibility of a profile for a certain amount of time in exchange for an in-app purchase.
How did Tinder make money before premium?
Tinder generated its money primarily via adverts and offers to purchase more “Boosts” or other features prior to launching subscription services.
Conclusion
So, what does Tinder’s current model show? It demonstrates that consumer technology is still in its infancy. The progress gained with dating applications and revenue models has been astounding, and it is probable that this trend will continue. However, my calculations show that these organizations have opportunities for growth.
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