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Free or subscription revenue models for online dating?
When Julia McMillan was planning the launch of her dating site TOYBOYWAREHOUSE at the end of 2006, she was faced with the dilemma of whether to go for the subscription model or the free model. Also she had the question of how to get enough people on the site to make it appealing. The NextWomen asked Julia, who serves currently as the CEO of the company, to describe her thoughts and strategy on these issues.
“I was new to the online dating business and it was all a steep learning curve. Both for the business model and the marketing of the site. After all no-one is going to stay on a dating site if there’s no-one there!
Tons of press, email lists and a free site
I had a lucky break in getting national press even before beta launching, and got the techie to put up a page saying: ‘If you want to know when ToyBoy Warehouse goes live, leave us your email.’ So by the time we did go live I had a list of 500 emails to kick start it. (TNW: There was no Twitter at the time)
The site was free for the first year as I reckoned you couldn’t charge people unless you had at least 5000 people on the site. We broke the target within a year with no paid pr but thanks to a lot of media interest. We even made it in the FT. We also used that year to customize the site and add important features like ‘the virtual bar or pub’ and ‘the forum’. I always felt it was important if you wanted to build a community to allow the women to talk to the other women, which proved to be true.
Subscription Site: Manage expectations Members
After a year we brought in a subscription charge of £5 a week, £10 a month or £50 for 6 months. I did give our members some warning but soon I realized I hadn’t managed it very well as there were a lot of irate people saying ‘How can you impose a charge? This is a free site!’ In retrospect I should have managed their expectations better, even though in the end most paid and stayed as members.
Like most dating sites, at Toyboy Warehouse you can sign up and search the database for free but if you want to communicate with another member you have to upgrade. With the massive growth of social networking sites like Facebook, which offer dating aps, the industry trend -until about a year ago- was towards big free sites, like www.plentyoffish.com and www.okcupid.com. The thinking behind the industry trend was that no-one would pay if they could get something free elsewhere and to build up massive sites with ad revenue. But I don’t follow this industry trend for the following reason.
Beware for the fakes and duds and Serious daters
I, as a woman, would never join a free site as everyone and anyone is on there. There is no policing and probably half the guys are not single but pretending to be. When we were still a free site -i.e.in the first year- women emailed us to ask when we were going to start charging as they felt it would filter out the fakes and the duds. In fact, it does work to some extent like that. There is little point in lying on a dating site and if you are paying you are less likely to.
Now however, ad revenue has fallen off and in order to make enough money to survive, free dating sites are currently stuck in a rut. All they can do to earn enough money to keep the lights on and the servers running is plaster sites with un-targeted advertising.
PlentyofFish is trying an interesting experiment where members can purchase a badge that identifies them as a Serious Dater. The badge simply signifies intent and is a bad value proposition, as even anyone can buy a badge. Regardless of the type of ads displayed, any free dating site with fewer visitors than necessary to remain profitable through clicks or impressions will fail. Let’s say the magic number is 200k monthly uniques. If the site receives less than 200k visitors, it doesn’t make enough revenue to stay afloat.
The VIP Section
The future seems to be, as on non-dating sites selling other things, to have different tiers of membership to allow for different levels of access and privacy. We are in the process of rebuilding ToyBoy Warehouse at the moment to go international. So we will have free and silver membership as we do at the moment, we’ll introduce gold for international access and we are also building a VIP section, which will be platinum membership.
I’ve been approached by a lot of women over the two and half years since I started TBW who have said “Yes, I love younger men, but I couldn’t join a site where the tea boy at work could find me!” So our VIP section will have much higher entry criteria, will be much more expensive than the main section and have the look and feel of a luxury hotel. Members in the VIP section will be able to invite a member of the main Warehouse section up for a drink. This is aimed at women who wouldn’t normally join a dating site, giving them the privacy and security you don’t get elsewhere.
It’s always more difficult to get women on dating sites than it is to get men, so male owners of dating sites should really heed what their female members are saying.”
Julia Macmillan, Founder of www.toyboywarehouse.com
Blog: http://sussedandsassy.com
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Interesting to hear the decision-making and development process for this dating site. As a Singles Coach, many of my clients share their concern about the merits of the singles on the sites. We talk quite a bit about a criteria for who they interact with.
I agree with the comment that paid services can weed out the undesirables who are less likely to pay for their activity.
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[...] of a dater. However they are not available on every site. On TheNextWomen a post titled ‘Free or subscription revenue models for online dating?’ featured an interview with Julia McMillan CEO of ToyBoyWarehouse She says: ‘I, as a woman, would [...]