MORGAN STANLEY - Despite a recent slowdown in user growth for dating apps, the industry is expected to deliver at least 10% annual growth through the end of the decade, according to Lauren Schenk, Morgan Stanley's equity analyst. The industry will shift its focus from user growth to monetization as companies move towards developing new products and features to convert users to paying customers. Currently, ~32% of the U.S. single population uses online dating, and of those, slightly more than a quarter pay. "An increased push toward monetization would drive 70% of revenue growth from 2022 to 2030, compared with 60% from 2014 to 2022," says Schenk. She estimates the industry monetization rate has doubled to 26% over the past eight years and could grow to 32% by 2030. Even small changes in the number of users paying for an app can have an outsized impact on revenue growth, Schenk says. Currently, the average paying user spends between $18 and $19 per month on either subscriptions or a la carte purchases.
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