Match Group, the largest online dating company in the world, has released its annual report to shareholders, reflecting on its development in 2022. Global Dating Insights has summarised highlights from the report.
The recent report highlights issues, challenges, and performances from the Match Group, giving readers an insight into its perspective on the online dating industry as a whole. Here are some of the issues the Match Group identified as significant to its continued success.
One of the risk factors the Match Group identified is the fiercely competitive nature of the social connection app industry.
“Some of our competitors may enjoy better competitive positions in certain geographical regions, user demographics or other key areas that we currently serve or may serve in the future. These advantages could enable these competitors to offer services that are more appealing to users and potential users than our services or to respond more quickly and/or cost-effectively than us to new or changing opportunities”, it shared.
The Match Group also highlighted that consumers in this industry have the tendency to use multiple platforms at once, and experiment with new approaches to meeting people. It warns that competitors could rise up and take some popularity away from Match Group’s portfolio.
“We may need to respond by introducing new services or features, which we may not do successfully. If we do not sufficiently innovate to provide new, or improve upon existing, services that our users or prospective users find appealing, we may be unable to continue to attract new users or continue to appeal to existing users in a sufficient manner”, it adds.
Competition comes from not only other dating apps, but also social media platforms. Match Group highlights that social networks, like Facebook did, can use their vast pool of users and the data they have on them, to contest Match Group’s own success.
Legislation & Regulation
The online dating industry interacts with government policy in numerous ways, from data protection rules, to trademarks, and safety guidelines. Here are some of the Match Group’s perspectives on government policies that have emerged recently.
In the USA, Match Group highlights that state legislatures have enacted new privacy legislation, with some coming into effect in 2023. The results of greater privacy protections are making an impact, with Twitter facing a $150 million fine for privacy violations in May 2022, it wrote.
In the EU, the Digital Services Act (DSA) will come into effect in 2024, imposing “additional requirements on technology companies around moderation, transparency, and the overall safety of their platforms”.
In addition to this, the UK’s upcoming Online Safety Bill may also have an effect, especially as it introduces “criminal liability for senior managers of regulated entities if they fail to comply with certain child protection duties”, Match Group points out.
App Store Policies
Match Group notes that its platforms are made accessible via the Apple App Store and Google Play store, both of which are able to change their policies.
These changes “may limit, eliminate or otherwise interfere with our ability to distribute or market our applications through their stores, our ability to update our applications, including to make bug fixes or other feature updates or upgrades, the features we provide, our ability to access native functionality or other aspects of mobile devices, and our ability to access information about our users that they collect”.
In addition to this, Match Group highlights that “Apple and Google are known to retaliate against application developers who publicly or privately challenge their app store rules and policies, and such retaliation has and could adversely affect our business, financial condition, and results of operations”.
These app stores also take a cut of in-app purchases made, affecting the profits brought in by the Match Group.
As these fees increase, Match Group shares that it may need to offset them by “decreasing traditional marketing expenditures as a percentage of revenue, increasing user volume or monetization per user, or by engaging in other efforts to increase revenue or decrease costs generally”.
Personal Data Collection
The above mentioned app stores also handle personal data related to Match Group consumers. This means that the app stores “receive and do not share with us key user data that we would otherwise receive if we transacted with our users and subscribers directly”, Match Group wrote.
The report warns that if the app stores increasingly limit the Match Group’s ability to collect key user data, “our ability to identify and communicate with a meaningful portion of our user and subscriber bases and provide services to help keep our users safe may be adversely impacted.”
The impact of any changes to personal data collection could impact Match Group’s ability to reach new users, improve paid marketing initiatives, charge advertisers accordingly, and exclude users who have broken terms and conditions (including underage users and bad actors).
Bad Behaviour and Brand Reputation
Match Group highlights that its business reputation may be impacted by the people users meet on their platforms. “When one or more of our users suffers or alleges to have suffered any such harm, we have in the past, and could in the future, experience negative publicity or legal action that could damage our reputation and our brands”, it points out.
This applies not only to Match Group platforms, but bad experiences on online dating platforms generally will impact the industry as a whole.
While it has policies in place to limit the bad behaviour of individuals, “users have in the past, and could in the future, nonetheless engage in activities that violate our policies. These safeguards may not be sufficient to avoid harm to our reputation and brands, especially if such hostile, offensive, or inappropriate use is well-publicized”, it shares.
The report to shareholders also discussed Match Group’s revenue over the past year. Overall it shared that in 2022 revenue grew 7%.
In Direct Revenue, Match Group saw an 8% increase in the Americas, a 3% increase in Europe, and notably an 11% increase in APAC and Other. The Americas still represent 51% of Match Group’s direct revenue.
To read the report in full, click here to visit Match Group’s Investor Relations page.