On with Kara Swisher - The Big Business of Online Dating (Land of the Giants)

Episode Date: February 2, 2023

Today, Nayeema sits down with dating industry veteran Lakshmi Rengarajan and journalist Sangeeta Singh-Kurtz before we play you an episode of the podcast they host — Land of the Giants: Dating Games. In conversation, the three explore the business of online dating, the incentive apps have to keep users swiping and the power the people who run and build these dating services have in shaping our love lives. Kara and Nayeema will be back on Monday with a fresh episode of On with Kara Swisher. Until then, find them on Twitter @karaswisher and @nayeema. __ Tinder, Hinge, OkCupid, The League. If you’ve ever wondered why using these different dating apps feels similar, it may be because they’re all owned by Match Group, the company that helped start online dating in the 90s, and now owns two-thirds of the dating app market. Today, Match is a dating app conglomerate with millions of users and over 45 brands around the world. That’s billions of dollars worth of swipes and subscriptions. But does paying for what Match Group calls “superpowers” — things like Hinge’s ‘roses’ and Tinder’s ‘super likes’ — get users any closer to connecting with real-life people?  • Hosted by Sangeeta Singh-Kurtz (@sangeetaskurtz) and Lakshmi Rengarajan (@Shmi_So_Far) • Subscribe for free. Be the first to hear next week's episode by hitting the plus sign in your favorite podcast app • Follow @TheCut and @verge on Twitter Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for this show comes from Constant Contact. If you struggle just to get your customers to notice you, Constant Contact has what you need to grab their attention. Constant Contact's award-winning marketing platform offers all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by their expert live customer support. It's time to get going and growing with Constant Contact today.

Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca Do you feel like your leads never lead anywhere? And you're making content that no one sees? And it takes forever to build a campaign? Well, that's why we built HubSpot.

It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Hi, everyone. From New York Magazine and the Vox Media Podcast Network, this is The Bachelor with 50% fewer roses. Just kidding, this is actually on with Kara Swisher, and I'm not Kara Swisher because she's out sick today, but I am Naima Raza. Today, we want to take a look at the dating app industry. We're going to

share an episode of Land of the Giants, a podcast that breaks down how the big tech behemoths are shaping every part of our lives, in this case, our love lives. Hi, Sangeeta. Hi, Lakshmi. Hi, thanks for having us. Thank you so much for having us. So let's just jump right in. So this season and this particular episode focuses on how most of the dating apps out there are owned by one company, The Match Group, which is a giant conglomerate built up under the media tycoon Barry Diller. He sold his stake for a cool couple billion last year, but the company had incubated Tinder. It

then gobbled up competitors, including OkCupid, Plenty of Fish, Hinge, as well as niche sites like Black People Meet and Senior People Meet and Single Parents Meet. But Match is only a $15 billion market cap business. So explain to me why they're a giant and why you picked this topic. Maybe Sangeeta, you can start. Yeah. So we are looking at Match because with one company owning most of the competition, Maybe Sangeeta, you can start. so monetizing and they're building in the exact same features. And then users are like, what are we supposed to do? And we cite one pretty recent study from Stanford from 2019, which tells us that the majority of people these days are meeting online rather than through friends and family, which is how it used to be. So those other methods are dying on the vine. And it probably means that a lot of people are dating in the universe that Match Group built, and they're no longer dating effectively within that universe. So people feel, and they're no longer dating effectively within

that universe. So people feel trapped, and you're saying they have very few suppliers, the dominant one in the industry being Match. Yes. And then Lakshmi, we should actually note you worked in the dating industry for a while, including at Match. I was there from 2014 to 2017, and I came in as their director of event design and strategy, and then I worked in brand strategy for a few of their apps. So yeah, I moved around a bit. I kind of hand this episode over to Sangeeta, which I think is actually sort of important because she's coming in with fresh eyes and able to tell this story because we're at an inflection point right now, right? Tinder has been out for 10 years. Dating

culture is totally different. It is in many ways one-dimensional. And so in order for people to understand that, we need to sort of backtrack and talk about the business. You can kind of extrapolate, like, what does it mean if one company has all of this very personal information and is selling people products across multiple platforms? And you also get into this, this idea that there's perverse incentives. Like, in the words of Hinge, right? It's designed to be deleted. And yet the business model benefits from kind of sticky customers who keep coming back. So there's a juxtaposition between what users say they want and what the app is giving them. Is that fair? That's one of the main things we're exploring this season is the gulf between the user objectives and

the business objectives. And it's a massive gulp like we know these apps their business model is based on subscriptions in-app features things that promise users a leg up in the dating game and it makes match a ton of money like in 2021 tinder brought in like 1.7 billion so match group would say you know these business goals are in line with users' romantic goals, that you're paying for a more effective experience, more accelerated experience. The odds will be more in your favor if you do this. But these daters that we spoke to, many of whom who have been using these apps since they were free, are skeptical about this. You know, they're using their roses and their super likes, but many of them

feel like they're throwing money into the void. One story that people will hear what sticks out to me is this woman who's spent over a year sending roses to guys, and she said one person out of the 50 had replied to her. I almost felt sad. I wanted to say, don't send anyone a super like because that just means they're thirsty. Don't be that thirsty. Yeah, we definitely heard that from users too. We're sending these roses and it just makes us look desperate. It doesn't lead to a meaningful relationships. Do you think the apps are giving people what they want? Because it's not like everybody on the apps is out there searching for earnest love, right? Some people are looking for validation. Some people are, there's some kind of amount of grift or people cheating on their spouses or other kind of bad behaviors happening on the platform too, right? So it's

really the earnest daters who get screwed. Is that fair? That's really funny. You know, what's interesting about it is that Tinder, they never promised love. It promised access and connections, and it did that successfully and at scale. So yes, billions of matches. It is connecting people. For every person that you hear that is frustrated with the apps, every so often someone pops up and says, oh, well, I met my partner on Hinge or Bumble. And it kind of obscures what's happening, which is that, yeah, in order for these businesses to succeed, most people actually don't meet someone.

Or in the process of trying to meet someone, a lot of their instincts and their behaviors get mangled. You kind of have to just go along with these features. Like you mentioned the roses, which is the one that everyone's talking about now. But at different points, they have charged for people to be able to hide their age, right? So there's all these little levers in the background that they can pull. Feels murky. Exactly. And also know that this isn't their fault. As daters, I think a lot of them say like, I should improve, I should be like hotter, younger, I should be a better dater, but they're sort of existing in an ecosystem that is

stacked against them. Right. And it's tapping into something that's deep in human nature, which is this paradox of choice, which I've written about, which is the idea that there's always something better around the corner or the paralysis of just so many options on the other side, right? Exactly. It's no wonder people feel burnout when they're managing multiple conversations. There's ghosting, there's catfishing, they're managing multiple conversations. There's ghosting, there's catfishing, they're being told left, right, and center that this is all a numbers game. So interestingly, Match just posted their first ever quarterly decline. I'm curious if you guys

were surprised to see that given, you know, this is a giant that controls so much of the industry. I'm not surprised for a bunch of reasons. Why is that, Lakshmi? Well, one is that during the peak pandemic, I think a lot of people who had resisted the apps or never really wanted to be on them felt like they had no choice. So I think a lot of the people that were there reluctantly feel like, okay, now I'm going to take that random invitation to my third cousin's bar mitzvah or whatever. I think people are excited to find other paths. And then I think just like what you were saying in this conversation, people are seeing these

premium features and kind of starting to have a sense that these may not be delivering what they say they're delivering. Post-pandemic, right, there's a desire to be in real life with other people and the people who have lived through this very virtual world. I think all these dating apps from banking on video dating, you know, phone dating, kind of being the future and our habits changing in a real way. But at least in my demo of millennials, I feel there is an urge to kind of be in real life with people and just be enjoying life as opposed to like being on a couch swiping. We 100% hear that from daters that there's this urge for like a tactile in-person experience.

But we are reporting episode six, which is like, what is the future of dating? What will this look like? It's metaverse dating. It's training an AI avatar character to go on dates with you. So maybe users want this IRL connection, but that's not where the money is. Yeah, I can't wait to meet my legless husband

in the metaverse, but thanks, Mark Zuckerberg. I mean, the tension is that I think that's 100% true, that people do want to meet people in real life. I think what's hard is that at the same time, people are also saying, I don't actually know how to meet people anymore. I don't know how to engage in small talk. I don't know how to initiate a discussion. So both things are happening at the same time. And I think that's the trick. Right.

And I think that they know that that's kind of the perfect environment to cash in. It's a great business opportunity for them and a terrible outcome for daters everywhere. I think that that is true. We have taken a lot of approach and rejection and all these things and put them on chats with relative strangers and just kind of strip the world of a certain EQ in dating for people. But I do think that we have the alternative inside of us to kind of date differently if we choose. I hope so. And that's why I think who builds the next iterations of dating, I think the who of who's building that is actually incredibly important right now.

Match has just had a big management shakeup. I remember Char for a while was running it reluctantly as CEO and is no longer. But do we feel like the personalities who make up these companies are changing in a way? I mean, that was the big promise of Whitney Wolfe heard when she started Bumble is that as a woman, she was going to design this thing differently. That was a big promise of Hinge when they started off, that they were starting off as friends of friends and they were going to be a more humane, less ghosty place to be. So are you seeing anything that would make you hopeful about the future of the business because you're hopeful about the future of the leaders of the business, or no? I mean, not really. They replaced Sharp with a new CEO who spent the last decade at Zynga, the gaming company, which just says that they're doubling down on gamification and engagement, which is, you know, that's scary.

Like people are spending, I think the status offer Bumble was like 90 minutes a day on Bumble, which that engagement is obviously gold for them in terms of money and investments. I mean, we just heard about, you know, the new incoming CEO or the recent CEO of Match comes from Zynga. Their product people all came from gaming places, right? So that lens is what informs what they build. And at some level, I don't even fault them for that. Well, I do fault them for it, but I also get why it's good business. Anyway, thank you both for being here. Let's take a quick break. And when we're back, we'll have the actual episode of Land of the Giants Dating Games. And Kara and I will be back on Monday with a fresh episode of On with Kara Swisher. Fox Creative.

This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion.

It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale. There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings. And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple. We need to talk to each other.

We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim. And we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash Zelle. And when using digital payment platforms, remember to only send money to people you know and trust. Support for this show comes from Indeed. If you need to hire, you may need Indeed.

Indeed is a matching and hiring platform with over 350 million global monthly visitors, according to Indeed data, and a matching engine that helps you find quality candidates fast. and a matching engine that helps you find quality candidates fast. Listeners of this show can get a $75 sponsored job credit to get your jobs more visibility at indeed.com slash podcast. Just go to indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply.

Need to hire? You need Indeed. Lakshmi, I want to tell you about this guy. A dating app guy? Sort of. He's been using dating apps for nearly a decade. But a few years ago, he discovered something about them that made him feel a little cheated. His name is Ev Gilbert. He's an attorney in Midtown Manhattan. It's sick that you're a lawyer. Oh, thank you. It does surprise a lot of people.

When I met him, he was wearing these heart-shaped lolita glasses and leather pants. You're definitely the most stylish lawyer that I've come across. Thank you. That is what I aim for. And when it comes to the apps, he's seen it all. He told me he started using them when he was pretty young.

Like most little gay kids, I was using Grindr when I first started because that's really the only way to meet other gay people. Grindr was enough when he was living in the suburbs, but he moved to New York in 2016 and had a new city, new me moment. And so he decided to try some new dating apps. OkCupid was first. It had these quirky, queer-friendly ads on the subway

that caught his eye. I do fall for ads very easily. Then he got on Tinder. When I started, Tinder was like, oh, this is the fancy one. This is the one that you go to to meet like a more long-term partner. At the time, Tinder was already building a reputation as a hookup app. But when Gilbert compared it to Grindr, it actually felt more serious. So he was on these apps for years and went on so many bad dates, you know, he wanted to be done. I mean, dating burnout is real. Totally. And then in 2018, he thought he saw the light at the end of the tunnel. Hinge. It was supposed to have this sophisticated algorithm, you know, high quality matches.

The app pitched itself as designed to be deleted. And then I think the first five or six profiles I've seen were people I had already talked to. And some of them I had already like been on dates with. Like the same dates that precipitated me switching to a new app. Okay, so I think I know where this story is going. Did you proceed to match with them or did you like throw your phone away in frustration? It just made me sit there for a bit and was like, this is New York. It's one of the biggest cities in the world.

These cannot be the only options here. He did not throw his phone, but he was left with a rage-induced curiosity. throw his phone, but he was left with a rage-induced curiosity. OkCupid, Tinder, Hinge, these apps were all marketed differently. They were supposed to provide distinct experiences. So why did using them feel so similar? After doing a bit of research, he realized that all of the apps he'd been using over the years, besides Grindr, were under the same corporate umbrella. Honestly, I felt kind of like cheated in a way. It's like, okay, Tinder has been treating me badly, so let me try Hinge. You know, kind of like the same way, like if you have a bad product, you're like, oh, I'm going to buy like that competitor's product instead.

I'm going to buy that competitor's product instead. Dozens of dating apps and websites, all owned by the same company. That company is Match Group. I'm like, how? How is this possible? This is Land of the Giants. Match Group owns nearly all of the top dating apps in the United States,

which means it controls the way dating works for millions of people. That's a lot of power for one company to hold. And it got all of that power through a long campaign of buying up the competition. And steering our romantic lives? It's been a lucrative business for Match Group. It knows our most intimate preferences and behaviors. And Match uses that data to better sell itself. To build new features that make more money from our desire to connect.

But what about users? As Match Group perfects the business model of dating, are people seeing better results? That is a great question, Sangeeta. Since I used to work at Match Group, we thought it'd be a good idea to hear your fresh take on Match's story. I can't wait to hear what you find out. Thanks, Lakshmi. The dot-com boom in the 90s was a bit of a wild west, and a young computer scientist named Gary Kremen wanted to try his luck. He had an MBA from Stanford, but his big business idea was pretty simple. He bought up a bunch of catchy domain names. Jobs.com, Housing.com, Autos.com.

He also owned Sex.com and Match.com. In 1995, the first version of Match.com would have looked familiar. I've seen old mock-ups, and they literally look like the classified section in a newspaper, which probably don't even exist anymore. That's Amarnath Tambre.

He's the CEO of Match Group Americas. And that was exactly the idea. That Match and all of those other domains would function as a sort of online classified space. Kremen created a company called Electric Classifieds to house his domains, named himself the CEO, and set out to conquer the digital classifieds business. And what respectable classifieds section didn't have personal ads? The only thing was that personal ads weren't always that respectable. In the mid-90s, a lot of the media was talking about the dangers of the internet.

A lot of the media was talking about the dangers of the internet. Not only that, personals, which were mostly newspaper 900 numbers, had a very bad reputation. Fran Meyer was a classmate of Kremen's from Stanford. When she joined Electric Classifieds, Kremen put her in charge of Match.com. Personals had an image problem. Meyer says that the personal ad sections of local weekly newspapers often featured fake ads that were basically scams. Ads like, I'm interested in a gangbang. Really disgusting. That would, though, generate lots of phone calls to the 900 number, okay? So this is the reason why personals were

considered fairly sleazy. Beyond that, the internet was new for most people. And for those who were already online, meeting someone often meant anonymous conversations in occasionally sketchy chat rooms. So Match and Meyer had to figure out how to clean up the sleaze factor and begin to build trust. She said that they started with the idea that men would follow women, and the way to get women on Match was to make sure the men were serious. A great way to do so? Make them pay to use the service. Subscriptions. Once we started charging, the percentage of women went up almost immediately. And I think it's because it sort of qualified the guys that were on the service.

There were a lot of other online personals, but there was none that was really taking a brand-focused, target-focused approach. And I think that's why we emerged as the winner, from really from the very beginning. we emerged as the winner from really from the very beginning. Today we adapt our regular weekly feature computer line to Valentine's Day. The search for true romance, as you probably know, can begin just about anywhere. But these days, many of those seeking soulmates are turning to the internet. Online dating's rebrand got the Good Morning America seal of approval in the late 90s. Online dating's rebrand got the Good Morning America seal of approval in the late 90s. By then, a lot had changed. For one thing, more people were using the internet.

And culturally, things were shifting too. Conversations about cybersex in shows like Sex and the City and films like You've Got Mail were helping to eradicate the online dating is dangerous and weird stigma. It wasn't enough for the owners of Electric Classifieds. Kremen was already gone. He'd bounced in 96 after butting heads with investors. A parade of new CEOs did not see a future for online dating. In 1997, Electric Classifieds sold Match.com. This is where media mogul Barry Diller comes in.

His company bought Match.com in 1999 for $50 million. Diller was an entertainment executive who'd been the chairman at Paramount Pictures and launched the Fox network. In 1995, he made his last big play in TV and bought a bunch of regional stations. Then along came the internet. And essentially we followed our curiosity. We're not deal junkies in a sense, but there was a lot of curiosity and a ton of opportunity. And so we just followed the opportunity. That's Dillard speaking to Fortune magazine.

Opportunity to him meant gathering his acquisitions under one corporate umbrella. The name of his behemoth was Interactive Corp., IAC for short. When IAC bought Match.com, the website had 500,000 users. That's roughly the population of Minneapolis. But Diller wanted Match to dominate the whole country, and then the world. He did what he did best and went on a deal-making spree. He bought exclusive rights to the personal section of New York Mag and BET. He partnered with MSN and AOL to increase Match's membership base. Then there was the marketing.

National radio and TV spots inviting people to come and get your love. A very 2006 partnership with Dr. Phil. Jodi! Whoa, Jodi! Sorry. You still daydreaming about Mr. Right? Yeah. You've got personality, looks, IQ. You just need a little guy-cue, that's all. Visit Match.com today.

A campaign for people who still felt like online dating was for losers. It featured real Match users. In this ad from 2007, DanishBeauty22 is wearing an evening gown. She's gorgeous and glamorous. The tagline for the campaign? It's okay to look. Whether it was Match's aggressive marketing, greater internet usage,

a shift in pop culture, or all of these things, at some point, online dating became a thing. And Match.com was leading the pack. Here's Diller again, speaking to Fortune in 2009, about 10 years after first buying Match. Million 500,000 people pay 25 bucks a month or so to do this thing. Now, and that's a very good margin, really remarkably solid business. With a solid business, a good margin, and cash flow,

IAC could use its war chest to level up Match.com into something entirely new. IAC is a holding company, meaning they have stakes in a variety of other businesses. And so it's like a conglomerate. They don't just have one type of business. David Marcus runs Evermore Global Advisors, an investment firm that specializes in holding companies like IAC. Marcus is a big fan of the Diller way. I think of IAC as a compounding machine.

They just do this. They put in these tiny things, spend years developing them. Then what comes out the other side is a great business that can live and stand and thrive on its own. Put it even more simply, think about a magician's hat. IAC itself is the magician's hat. And over the years, he's been pulling all these rabbits out. But these are rabbits that are multi-billion dollar opportunities. It wasn't enough that Match.com was growing and making money. Diller still wanted to forge a company that would dominate online dating entirely. In 2009, Match.com became Match Group.

Its strategy? To eat the competition. That same year, Match Group made its first acquisition, People Media, for $80 million. A little over a year later, it acquired Meetic. Each of these sites brought something unique to the business. People Media had niche brands, specifically social connection websites that included OurTime.com and BlackPeopleMeet.com. Meetic was really popular in France and let Match get its tentacles into the European market. But the most important thing was that these acquisitions brought millions more people under the Match Group umbrella. So Match Group was growing, but it was also wary of the competition.

So Match Group was growing, but it was also wary of the competition. Its biggest problem in 2011 was OkCupid. The site was reaching younger Gen Xers and millennials who were curious about online dating, but reluctant to fork over $30 a month for a Match.com subscription. And OkCupid was free. It liked to rub that in Match's face. In fact, in those days, it cast a lot of aspersions on Match. Match's marketing claimed that 12 couples got engaged today thanks to Match.com.

OkCupid took aim at this brag with a snarky blog post, suggesting that given Match's scale, this was kind of a ripoff. What's more, compared to OkCupid, Match was old school. Its users were still building and browsing elaborate profiles. OkCupid did things a little differently. It had users answer tons of personality questions to get a compatibility percentage with other users. It felt scientific, but fun. So in the case of OkCupid, it was clearly attracting a more coastal, progressive, geeky, data-oriented person. Amarnath Tambre, CEO of Match Americas. So it was a very unique, passionate user base that liked to answer questions.

And it was a very different way of analyzing and matching people as well as assessing people. So instead of competing with OkCupid, Match just bought it. Match's next major target was Plenty of Fish, a free dating site that was wildly popular in the mid-2010s. It was launched by Marcus Frind, a computer scientist, back in 2003. And it became so successful because Frind mastered the SEO game. When people searched for dating in LA or dating in New York, they would see Plenty of Fish at the top of the results. Kim Kaplan joined the company in 2009. So my first week at Plenty of Fish, we went to an online dating conference in Miami.

And Marcus got up on stage and was presented with a Darth Vader helmet. And it was basically them saying, you're going to kill everybody in the industry. In a 2009 profile in Inc. magazine, Frin talked about how he worked one hour a day and made $10 million each year running the site from his apartment. Marcus said he would never sell. He reiterated that a number of times to everybody. I'm never selling, I'm never selling, I'm never selling. Why would he?

He was making millions and he owned 100% of Plenty of Fish. Which, by the way, was true to its name. It had 3.6 million daily active users in 2015. Amarnath Tambre again. I think it was number two in the country. So that was like, obviously it was huge and extremely popular in like the smaller towns or small town America. This was obviously a problem for Match Group, a rival dating platform with huge reach that refused to be bought. But at some point, Vrind's position on selling had evolved.

He went to dinner with Match Group CEO Sam Yagan, and by the end of it, Match owned plenty of fish. Vrind left with over half a billion dollars in his pocket. It was Match Group's largest acquisition to date. With Plenty of Fish in its portfolio, Match Group now owned four of the five top dating brands in North America. This morning the biggest dating websites are getting ready to woo. Wall Street, Barry Diller's company...

In November 2015, Match Group went public. It was the moment when Barry Diller pulled the rabbit out of his magician's hat and showed Wall Street just how much online dating was worth. IAC had spent nearly $1.3 billion to acquire 25 brands for its dating portfolio. Match Group's market cap at IPO was nearly $3 billion to acquire 25 brands for its dating portfolio. Match Group's market cap at IPO was nearly $3 billion. More and more daters were turning to mobile apps to meet people. While Match owned the most popular mobile dating app out there, it wasn't bringing in much money.

That was about to change. Thumbtack presents the ins and outs of caring for your home. Out. Indecision. Overthinking. Second-guessing every choice you make. In. Plans and guides that make it easy to get home projects done. Out. Beige on beige on beige. In. Knowing what to do, when to do it, and who to hire.

Start caring for your home with confidence. Download Thumbtack today. You want something a little more meaningful than a great can opener or a cozy pair of socks. That's where Aura comes in. Wirecutter named Aura the number one digital picture frame, and it's not hard to see why. Aura's frames make it incredibly easy to share unlimited photos and videos directly from your phone to the frame. And when you give an Aura frame as a gift, you can personalize and preload it with a thoughtful message and photos using the Aura app, making it an ideal present for long-distance loved ones. For a limited time, you can visit auraframes.com and get $45 off Aura's best-selling Carver matte frames by using promo code VOX at checkout. That's A-U-R-A frames dot com, promo code VOX. This exclusive Black Friday Cyber Monday

deal is their best of the year. So don't miss out. Terms and conditions apply. In 2013, about a third of Match Group's users were signing up for its products on mobile devices. By 2015, that number was closer to 70%. Part of this was thanks to Tinder, which was created in an incubator owned by IAC. That relationship eventually evolved into Match Group owning the app. Tinder still had something of a startup spirit, though. It spent the first couple of years focused on growth, not revenue.

That all changed when Match Group was preparing to go public. I do remember, you know, finding out like, oh, hey, we have to monetize, I think, based upon an earnings call. That's Jonathan Badin, one of the co-founders of Tinder. And I was like, wait, we're what? I was like, okay. Tinder had followed a common playbook. Make the app free and figure out how to make money later. Well, it was later.

And Match Group wanted Tinder users to start paying up. Tinder just had to find out what users would actually shell out for. Jess Carbineau was one of the people tasked with figuring that out. In 2014, she was studying sociology at UCLA and writing about online dating for her dissertation. She was also using dating apps. Carbino had recently matched with Sean Rad, another one of Tinder's co-founders. She took it as a sign when he started to message her while she was on a boring date a few days later. I was literally like back and forth while all this was happening in the bathroom, live

messaging Sean. The guy either thought I had a urinary tract infection or a cocaine habit or I was just woefully uninterested. It was obviously the third option here. She pitched her research and herself, and soon enough she was working at Tinder's offices in West Hollywood. One of her tasks, she says, was to dig through the data from Tinder's user surveys. I helped them monetize. I helped them figure out, you know, what people were willing to pay for. She wanted to know, would members drop money on a tool that would help them stand out from the crowd? How often were they going to use it? Under what circumstances would they use it?

Were men more likely to use it than women? These were all questions that I was trying to answer in the back of my mind to understand the motivation for whether or not we should be investing in it. Her research was fed to teams that developed special features, what Tinder calls superpowers. There was the boost, which got your profile seen by more people for a limited period. And the super like, which you could send someone to show them that you really liked them. But these features were not free. Amarnath Tambre again.

We are constantly looking at various ways to, say, give users a way to enhance their chance at succeeding on the app. And that's something that users are always willing to pay for. And users did. They spent millions seeking an advantage on the app. And on subscriptions, which Tinder added next. In 2016, it brought in $169 million in revenue. And still, Match wasn't finished. There were plenty of other dating apps that could pose a threat to Tinder's dominance. So Match Group went back to its old playbook. Competition? No problem. We'll just buy it.

In the mid-2010s, dating apps were mostly the same. All the dating apps were Tinder, except for What's Your One Little Wrinkle? That's Tim McGugan, a former executive at Hinge. In the early years, Hinge was pretty much just like Tinder. But it used social media to connect users to friends of friends. We were chasing our tails. We had a swiping experience very much like theirs. We had profiles very much like theirs.

We had a couple little things that made it a little bit different, and we had a little bit of a different ethos, and all that was well and good, but ultimately people saw us as the same kind of product and they used us in the same way, as a numbers game. But Hinge didn't want to be Tinder. It wanted to beat Tinder.

Internally, we were like at war against Tinder. We were like, we need our product to be better than Tinder's. They're all about gamification. We're all about like really like human design. Lucy Mort was a product designer at Hinge in late 2015 when that war against Tinder took shape. A vanity fair piece on Tinder's role in the rise of hookup culture had gone mega viral. Tinder, it said, was patient zero in the, quote, dating apocalypse.

Romance as we knew it had been destroyed. Tinder had reduced it to swiping and bad sex, and anyone who was serious about finding a partner was out of luck. who was serious about finding a partner was out of luck. This is music from an animated video that was part of Hinge's anti-Tinder campaign. In it, a man who looks a lot like Hinge CEO Justin McLeod wanders through a kind of dating hellscape with signs to attractions like eye candy and one-nighter.

Then he walks through a door that says Hinge and finds a bright paradise of happy couples. The campaign was called The Dating Apocalypse, the same name as that Vanity Fair piece. It was not exactly subtle. If most other apps were just Tinder with a twist, Hinge's new plan was to be everything that Tinder wasn't, to be the anti-Tinder.

We knew that if you can really, like, get to the core of what a young single woman's problem is and solve that, then you're going to, like, have a successful dating product. And at the time, was like single millennial women. They were just like so tired of hookup culture, tired of like not really knowing a man's intentions. And that was the problem that we really set about solving. Mort led a redesign of Hinge to make it feel less tindery. It started with dropping the swipe. The traditional swiping app experience was a numbers game. It did lead to this like culture where people weren't coming into using a dating app with the intention of really

like dating and getting to know someone and getting into a relationship. What we wanted to do was to create a environment where actions meant what they were supposed to mean. We knew we had to slow people down to make sure they're really measured with their decisions and to help get the conversation started. While Tinder liked to brag about its billions of swipes and introductions, Hinge used different metrics. Good dates per user became the app's North Star, according to Tim Matt-Guggen. If we were the best at creating dates for our users, we would win.

In 2017, Hinge's strategy had started to work. It was gaining users, and venture capitalists were getting curious. They weren't the only ones. I'm always looking for what's missing. Is there a need, user need out there that is not being served? Amarnath Tambrai again. Tinder was fun and fast and easy and everyone loved it. But there was a certain kind of user, which I think I call it like more intentional, like millennial, who wanted like to spend more time on each profile, be a little more intentional about

who they want to meet, learn more about that person. They wanted something cool and fun and modern as Tinder, but a little like slow and intentional. In theory, acquiring Hinge would help Match Group remain a one-stop shop for any online dating experience a user could want. You know, if you hate Tinder, we've got the anti-Tinder. So in 2017, Match made an initial investment in Hinge. Two years later, it bought the whole thing. Hinge hadn't beaten Tinder. It had joined it. But that was good enough for Matt Gugin.

It was a strong sense of validation that what we were doing was working and that we had a promising future. And Hinge maintained its image as the anti-Tinder after joining Match Group. Hinge wants you to meet someone great. Even if it kills us. joining Match Group. But Match didn't buy Hinge just to fill out a place in its portfolio. It expected the app to bring in cash, too. We needed to make money. And so we needed to show a return on investment. So 2020 was the year when we needed to monetize. Good thing there was already a playbook for that. Tinder's business model was a proven success. It had made hundreds of millions of dollars selling superpowers a la carte and bundling them into premium subscriptions.

In 2019, Tinder bought in $1.2 billion in direct revenue. It made sense for Hinge to go down the same path. What you can pay for is a more effective or accelerated experience of finding your next date, engaging with more people at once, getting more attention. Hinge debuted a new feature called The Rose in 2020. If you saw someone you really liked, you could send them a rose. Every user got a free rose each week. The idea was that if you were willing to part with your precious rose for someone, they'd be more likely to hit you back.

The rose also bumped you to the top of their list of people who had liked them. You might be buried otherwise. And a rose could also get you access to people who were the most desirable on the app, so-called standouts. You could buy more roses for $3.99 a pop. And, of course, they're cheaper by the dozen. If all of this sounds familiar, that's because the rose is just Tinder's super-like in cellophane packaging. The reception to some of these new features, which were, after all,

ripped from Tinder, was a little bit frosty. Lucy moored again. Yeah, it's like withholding pieces of the experience and like dangling a carrot in front of a user, but being like, pay us to get it. And I think that can feel like kind of shitty as a user. But it seems like these apps are improving on taking our money and making us spend more time on their apps

than they are in actuality matching us with people that we're more interested in, right? That's Jeremy. We're only using his first name because he works as an app developer and wants to keep his job. Anyway, Jeremy is one of the dozens of dating app users we talked to for this series. He's skeptical of the effectiveness of roses and the other superpowers the app asks users to pay for. I would never pay to send a rose to someone on Hinge. And if I did, I wouldn't think that they'd be motivated to match with me over someone else. But Jeremy does pay for a Hinge subscription.

It lets him see people who have already liked him. And that, and that, he says, makes things more efficient. But he's not sure efficiency has helped him find what he's really looking for, a partner. For Jeremy and many other users, it's not clear if buying all this extra stuff is working or if it's just throwing money into the void. Sarah Satiroff is another dater. She diligently uses her free rose every week. I mean, upwards. For sure, if it's been a year, then I've given out 50.

But I do it every week. So however long it's existed, I've been doing it once a week. One person has responded to a rose she has sent. A guy who is thinking about moving to her city. They talked for months before he arrived, but in person, the chemistry was non-existent. I think I kept going out with him because I was like, on paper, he is so perfect. And there's got to be something here that I'm missing. I've got to be able to unlock the connection here. And there just wasn't. And I think that's the thing you can't, you can't account for and you can't app optimize for the connection. You just can't make that a feature. Edison Wilkinson also hasn't had luck with roses. Hinge does that like, oh my goodness, we know you'll

be attracted to these women. And you have to like, you give them the one rose you get or pay five bucks for a rose. Yes, absolutely. They do that for sure. Have you paid to interact with those women? Absolutely. For sure. Absolutely. And nothing has come from it at all.

Fool me once, shame on you. Fool me twice, I need to get off this app but that's not what's happening people are staying on the app and they're paying on the app in 2020 hinge brought in 90 million dollars in revenue it nearly doubled the following year hinge was making more from each paying user too. In 2019, that was around $5 per month. In 2022, it was $25. The value proposition of these premium features is more efficiency, more visibility, more likes, more, more, more. But do they allow users to achieve their romantic goals? To find partners? I put the question to Amarnath Tambre,

the Match Group executive. Do you think those other features do give people more success on the app? Yes, they do. I mean, like, the obvious proof of that is that they're willing to continue to pay for it because when they use it, they see results. And when they see more results, they want to buy it again. Obvious proof is a stretch. Of the dozens of users we spoke to, it seemed that what people were paying for was the promise of results. Like, spend enough and surely they'll meet the right person. Eventually. I wonder, are the roses helping people find love? Is that what the data is showing? It is. It is. I mean, I think there's a stat on the app itself that if you send a rose, you have a far higher chance of getting a response and getting into a conversation

than you don't. That's not really what I asked. But former Hinge exec Tim McGugan says Match's money-making strategy, while not perfect, is a win for everyone. Users want to go on dates. That's what the product is there to deliver. People who pay for these things are getting incremental value, otherwise they wouldn't pay for them. The roses that they're buying are working. The boosts they're buying are working. The subscriptions that they're buying are working. They're having a better experience and more dates. And if you want those things, then you can pay for them. You don't? Great.

Functionally, I can know that we took nothing away from the free experience when we introduced them. And, you know, a listener might believe me or they might not. I don't know. It's a hard thing to prove. And who trusts big corporations, you know? If you assume that they're well-meaning and good, they want to find you, your perfect match,

so that the more they know about you, the more perfect partner they can show you. Ev Gilbert, the lawyer we heard from earlier, doesn't think that paying more for the apps means more success. The less benevolent interpretation is that they're trying to find a way to make more money off of you. So maybe if they know who exactly you're attracted to, they're going to give you something that's the store-brained version. So you're like, okay, so the real one is out there. It's like nibbling at the edges, but never getting the core.

We are sold on the idea that it's just a matter of time until that special person sees our profile and swipes right. And paying for special features will supposedly shorten the process. It felt like someone was trying to figure out what I liked, but it didn't feel like they were trying to do that to help me in any way. What did you do in terms of that? Like, did that change your relationship to the apps? Did you stop using them and you were pissed about it?

I kept using them because what's the alternative? Lakshmi, welcome back. What did you think? I take it that Ev Gilbert does not pay for dating apps. I don't think so. In his final year of law school, he actually wrote a paper calling Match Group a monopoly. It's like that moment when you realize Procter and Gamble makes all of your household products, or that Rupert Murdoch is the hand behind a lot of the news. But then you stop and think about dating apps. You're hoping they'll help you find other humans to connect with. And then you think, uh, they're run by a multi-billion dollar corporation trying to keep its shareholders happy? That can be concerning.

Is this late-stage capitalism at its finest? Anything and truly everything has a price. The thing that strikes me is, our love lives are being steered by Match Group's business objectives. So people are paying for all of these features, and they don't really know if the money's getting them anywhere. Yeah, being a part of Match Group seems to flatten these dating services into money-making machines. But a lot of people feel like there aren't many alternatives to this world that Match Group rules. And Match Group truly has its tentacles in every niche of the market, from black singles to single parents to folks over 50. No matter where you turn, you're in the match vortex.

So many different cars, but when you lift the hood and take a look at the engine, it's still match group. In our next episode, we're going to go one layer deeper into the system and look at the algorithms that are literally shaping our romantic futures. How daters are noticing the patterns in how the apps work and trying to figure out ways to make them work a little better for themselves. Special thanks to Dr. Helen Fisher, Mark Brooks, and Jim Osman. Archival clips in this episode are from CBS This Morning. Land of the Giants Dating Games is a production of The Cut, The Verge, and the Vox Media Podcast Network. Oluwakemi Oladusuyi is the show's producer. Cynthia Betubiza is our production assistant. Charlotte Silver fact-checked this episode. Jolie Myers is our editor.

Brandon McFarlane is our engineer and also composed the show's theme. Nicole Hill is our showrunner. Additional support from Art Chung. Jake Kastranakis is deputy editor of The Verge. Nishat Karwa is our executive producer. I'm Sangeeta Sinkerts. And I am Lakshmi Rangarajan. If you liked this episode, please share it and follow the show by clicking the plus sign in your podcast app.