Hello, and welcome to Online Personal Watch’s Monthly News Roundup. I’m Mark Brooks, and this is what made industry news in June 2009.
A recent survey conducted by Opinion Research for eHarmony found that 51% of single parents believe that they and their children are better off emotionally when the parent is in a committed relationship. The survey asked single parents about their motivations for dating again, and 3 of the top 5 answers were “to have a mother or father figure in their child’s life,” “to share parenting duties” and “to appease their kids”. This very point is the top reason Irena and I particularly enjoy devoting our time and career to the internet dating industry. Internet dating services and matchmakers promise to help people make better matches. Better matches mean happier families and kids. Happier and emotionally healthier kids may, we hope, lead to a society that won't self destruct in future generations. This is a good cause, and what makes the dating industry a particularly rewarding industry to work in.
Match and eHarmony have both released success rates and statistics for their respective sites. Match announced that users send 56 million first emails and 132 million winks per year. Users go on 6 million dates each year, and 12 couples get married or engaged each day, and they bring in $1 million a day from subscription revenues. Meanwhile, eHarmony announced that 118 couples get married or engaged each day thanks to them, and they have 12-15,000 new users every day, and a full audience turnover over every 6 ½ months. This item attracted a bit of discussion on OPW between a few of our readers. James Houran, the former Chief Psychology Officer from TRUE raised several very good points, stating that “the number of marriages or engagements is meaningless unless one also knows the divorce and break-up rates for the matching services” and that “it is more useful to know how many of those relationships turned out to be stable.” He makes a valid argument that success rates are only put into perspective when a ratio is given to failure rates. But how many services are really able to track long term match success rates? I don't know of any. What's their motivation anyway. Dating services are a victim of their own success. They match people, then those people quit the service. However, I think we're going to see new services evolve that help members after they've hooked up. People do really need help. And some are willing to pay for it. So why don't we help dating site users through the entire relationship continuum. If dating services could make money beyond the day they successfully matched users, they'd be motivated to stay in contact with them, and then they'd have the opportunity to collect real success metrics. Then they would be in a better position to refine their matchmaking methodologies.
Spark Networks is losing subscribers. Spark said it's trying to rebalance its portfolio to be less reliant on JDate, which recently received a face lift. However, its segment weighting seems to be shifting more because of the relative speed of subscriber losses. Stock is down about 9% year-to-date and about 47% over the last 52 weeks, reflecting the prolonged poor performance, and Spark Networks now has a market capitalization of $47.1 million. Revenue for Q1 dropped 20%. Meanwhile, revenue at Match.com slid just 1% and ad-supported free sites like PlentyofFish, which saw unique visitors nearly double to 2.9 million in April, are becoming an increasing threat. Spark is focusing its ad spending on a handful of its niche sites to bring them up to scale, and has all but given up on AmericanSingles.com. I do live in hope for Spark Networks, but quite consistently they have shown less than stellar results.
An interesting new site launched in the UK recently as a social hub for singles ready to get out and date. DatingTrail.co.uk is a site designed to bring dating sites, events and matchmaking together in one destination. The site features several hundred UK dating events ranging from Lock and Key parties to classy wine tasting evenings. Singles holidays from Adventura and Click Singles are also listed along with reviews of past trips. They have also put together a list of online dating sites, and rated the sites. Nice work.
Virtual goods are back in the news, and CNET reported earlier this month that start-ups peddling virtual goods managed to raise $69 million in funding in the first quarter of 2009. Offerpal Media leads the pack with $15 million raised, followed by IMVU, ngmoco and Nurien at $10 million each. The author of the article states that what is not yet clear with virtual goods is what business models work and what segments of user populations are the best targets. I should note, Online Personals Watch is sponsored by Viximo and they provide a virtual goods platform for dating and SNS services. Viximo maintains that everyone buys virtual goods. One of the most interesting user behaviors is that many users buy gifts for themselves just to show that they have gifts attached to their profiles.
The Milwaukee-area office of Great Expectations is being sued by the Wisconsin Justice Department for apparently violating Wisconsin's no-call law, exaggerating the number of participants' marriages and misrepresenting its prices. The lawsuit alleges that Great Expectations sells memberships that allow access to a database containing photos, videos and profiles of other members, but actually just search nonaffiliated websites for names of Milwaukee-area singles who are then called by company telemarketers. The suit also alleges that telemarketers tell potential customers that unless they are “living in a cardboard box” they can afford the service; they try to obtain financial information to see how much a potential customer can afford to pay for their membership; and use high-pressure, oppressive tactics including holding driver’s licenses or credit cards to keep people from leaving during the interview process. Ultimately GE's model is kinda defunct with the rise of video dating sites like Woome and Speeddate.com. Anyone with a webcam can do a Skype call with someone they're interested in meeting from a dating site. Yenta's have a future, but unless GE goes through a metamorphosis soon, their brand will metastasize pretty rapidly I'm afraid. How about providing more matchmaking services?
PlentyOfFish.com and world-class rapper, Flo Rida, are teaming up to unveil his latest video, ‘Available’. While dating sites have often been featured in movies and TV shows, ‘Available’ marks the first time that the online dating industry and the world of hip-hop have partnered up to spread their messages across both platforms.
Without question, the biggest and most controversial issue that sprung up during June was the announcement of a lawsuit against Match.com. Sean McGinn of Brooklyn is suing Match for misleading members by posting profiles of prospective dates that are unable to respond to any interest in them because they do not have a paid subscription. McGinn is accusing Match of causing “humiliation and disappointment” for some members who feel rejected when their attempt to contact a prospective date gets no reply.
We spoke with Nora Hart, the attorney representing Sean McGinn. It's her assertion that “Match defrauds the consumer of their time and personal investment every time a person pays Match’s subscription fee and writes to a member who won’t have the ability to read what they wrote or see their profile.”
The one main thing that they seem to be pinning the case on is the fact that when you look at a profile, you cannot tell if a person is a subscriber or a free member. You also cannot tell how long it’s been since they’ve logged onto the site beyond three weeks. It is this practice that they want to go after Match for. Should they win, this would have a significant impact on every dating site that doesn’t list subscriber status or caps activity reporting on their members at three weeks or so.
Norah Hart contends that, “When a subscriber cancels their subscription, their profile continues to appear to be that of an active subscriber. Nothing indicates to the viewer their limited access to read e-mails or respond to them.”
The problem with this argument is that just because someone cancels their paid subscription to a site, it does not mean that they are canceling their membership. It also does not take into account winking, which is a free feature on Match for all members, regardless of paid status.
What she fails to take into account is that there could be numerous factors contributing to her client’s failure on the dating site, from his photo or profile, to what he says in his emails and even his dating strategy. It may be that he was actually rejected by women with paid subscriptions who were just not interested.
I also requested a statement from Match.com on the matter, and they replied that "Match.com’s continued success depends upon the success of our members in making online connections and turning them into meaningful relationships offline. The allegation that we would deceive our subscribers by encouraging them to connect with inactive members therefore makes no sense and is contradicted by our 14-year record and the hundreds of thousands of members who find someone special on Match.com every year. We understand that finding romance, offline or online, can at times be emotional and personal, and we wish Mr. McGinn well in his search. But his lawsuit is without merit, and we will defend it vigorously."
Mr. McGinn’s attorney is seeking a Jury trial and it will all come down to what the people decide and how strong his claims of anguish can sway them. Of course, the argument may be diluted by the fact that he did eventually find his girlfriend on Match.com according to a recent report on Fox News.
A number of dating company mergers and partnerships have been announced in the past month, and they are as follows.
· Christian Café and Single Christian Network have combined to form one community at ChristianCafe.com.
· IAC completed their transaction with Meetic, meaning Meetic now owns Match Europe and Match has its arms around Meetic.
· Meetic has signed a partnership with Microsoft’s MSN portal, which will see MSN providing Meetic’s dating and matchmaking services to customers in 12 European countries.
· meetMoi, a leader in location based mobile dating, announced a strategic alliance with ClearSky, a provider of content and managed services to wireless carriers. meetMoi will be added to Clear Sky’s product suite.
· Virtual Greats, a virtual goods and sales distribution system, and Viximo, a provider of virtual goods and currency solutions, announced a partnership deal providing publishers with turnkey virtual goods solutions, including an unrivalled library of branded entertainment, sports and fashion content.
· And Attivio’s Active Intelligence Engine has been selected to power Deutsche Telekom’s FriendScout24, which is now able to create a more user-friendly site with real-time field updates.
That’s all for the June report of OPW’s Weekly News Roundup. Tune in again next month as we bring you the latest and greatest from the world of online dating. No ads, no fluff, just raw news and CEO interviews served up daily. I’m Mark Brooks.