Thursday, May 04, 2006

As Online Dating Sites Novelty Wears Off, Offline Dating Becomes More Profitable And Popular

Personalized Water Bottles

Marketdata Enterprises Inc., a leading market research firm, has released a new 232-page report entitled: The U.S. Dating Services Market. The study presents in-depth status reports and analyses of independent matchmakers, dating Web sites, chains and franchises, radio datelines, print personal ads, and singles publications. The study estimates industry revenues, trends, and competitor profiles from 1991 to 2008 Forecast.

There are 90 million singles in America, and online personals Web sites such as Match.com, Yahoo! Personals and eHarmony have brought matchmaking into the mainstream since 2001. However, we are now seeing the first wave of divorces of people that found their soulmates online and consumers are not happy with the accuracy of online profiles. State lawmakers are not happy either. There are bills proposed or pending in IL, TX, FL and VA, to require dating services to state whether they perform background checks. This has become a controversial battle. The novelty of online dating has worn off and revenue growth for the 850+ websites operating has slowed drastically—to only 4.5 percent last year, versus 47 percent in 2003.

“The introduction or dating services market is growing only 3.7 percent per year in the U.S., but not all segments of the market are faring equally well. The industry is basically self-regulated. This has turned into a global business, branching beyond the United States. The U.S. is still the largest market, but it’s saturated and the untapped potential appears to be Europe, as well as ethnic and hobby-based niche markets.”, according to Marketdata’s Research Director, John LaRosa.

Major Findings:

1) Marketdata forecasts the total dating services market to grow at an average annual rate of 3.7% from 2005 to 2008, to $1.11 billion. Growth has slowed in the all-important dating websites segment, which represents 49% of the entire market. Most other segments are seeing flat or moderate gains.

2) It’s estimated that 1,300 independent matchmakers operate nationwide (grossing $50,000 to $200,000 per year each). An additional 218 physical offices run by chains or franchises (Great Expectations, Together, The Right One) also compete. Added to this, there are literally thousands of dating websites, as well as singles magazines, and roughly 375 radio station datelines.

3) The latest U.S. Census survey reported that the “average” dating service establishment had 2002 receipts of $555,000, down from $887,000 in 1997.

4) Matchmakers, usually 1-person operations, have survived and prospered, despite fees than often reach $25,000+. They cater to high income male executives. More are entering this lucrative field. About 1,300 are estimated in the U.S. The “average” established matchmaker grosses about $200,000/year, but some make as much as $5 million.

5) Off-line dating services (franchises and chains, solo matchmakers, speed dating) in many cases are outperforming the dating websites. They have a lower cost to acquire a new customer, a higher lifetime customer value, and can offer in-person verification that dating websites cannot.

6) Very few dating Web sites are profitable and the cost of entry to build a “critical mass” and database of profiles is now estimated at $10 million.

7) Profit margins for “bricks & mortar” chains can run as high as 30 percent of sales, with little or no competition, and 19-22 percent with moderate competition. No doubt, margins are at least 30 percent for the one-person matchmakers not run out of a retail office—because their overhead (especially advertising) is much lower. It’s not unusual for a dating franchise to spend $5,000 per month on advertising, to bring in perhaps $15,000 in sales. By contrast, a single matchmaker may spend next to nothing, instead relying on word-of-mouth and personal networking.

(Source - Marketdata Enterprises Inc. Press Release at PRWEB.Com

P.S. I've got to admit, I totally love The Shield Pro 2006