Every time a dating site succeeds in making a match, it loses two users. To offset churn, Zoosk tells me that tomorrow it’s announcing a new business model that complements subscriptions with date discounts, expert relationship advice, gift ideas, holiday reminders and online scrapbooks. The products could convince users to pay even after they’ve found their sweethearts. If users fall in love with the new revenue streams, the whole dating industry could start courting happy couples.
Zoosk now has 15 million monthly active users across its site, mobile, and Facebook app. It also has a $90 million annual sales run rate, up from $20 million in 2009. Still, it’s had to raise $40.5 million to buy ads and failed dating sites so it could replace the users who canceled their subscriptions once they’ve found a mate. Most users don’t want to look like losers by sharing their Zoosk activity on Facebook or Twitter, so the service misses out on the organic virality enjoyed in other verticals.
But Zoosk may have found a way out of this downward spiral. While a $12-$30 monthly subscription may seem expensive, singles, and men in particular, are used to forking over cash to impress dates with dinners, drinks, and nightlife. Zoosk could grow profits if it captured some of this spend by offering discount package dates similar to romantic experience subscription service BeCouply.
Once a couple emerges from the high-priced date honeymoon period, Zoosk could sell them on reminders and gift ideas. It could take cut of spend on birthdays, Valentine’s Day, and the winter holidays, as well as digital scrapbooks.
Finally, Zoosk could identify couples on the verge of breakup through on-site behavior analysis that surfaces users returning to their profiles for the first time in months. Then it’s as simple as targeting them with in-house ads about how true love never dies and they’ll never find someone better.
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