Tinder, the mobile meet-cute method of choice, is a free-for-all no more. Yesterday brought the rollout of Tinder Plus, a paid version of the app with premium features, some of which are shiny and new and some of which used to be free but, well, nothing gold can stay. For Americans under 30, Tinder Plus will cost $9.99 a month. Americans 30 and older will be charged $19.99. Hey ancient American single people, it could be worse: in the U.K., the cutoff for a cheaper Tinder Plus is 28 years of age. The youngins there pay six dollars; the 29-and-over users pay $23. (There will still be a free version of the app.)
Pay the fee, and you’ll be able to use Rewind, that is, take back a swipe in either direction. You’ll also be able to scope out potential partners in other cities using the Passport feature, which sort of sounds like it defeats the original purpose of Tinder (finding a hook-up near you). What sounds like the biggest change isn’t what users gain from the pay model but will lose from the free version: only Tinder Plus users get unlimited likes. Bad news for all the daters using that swipe-right-on-everyone tactic. Though the free version of Tinder hasn’t launched any ad products yet, sources say they’ll be coming later this month, and Tinder Plus users won’t see them.
To quickly dispense with the obvious: this system is ageist and offensive. And what a PR misstep, to announce it this way, instead of presenting the tiers as “student” and “young professional,” which would mostly divide users along age lines by default. The only way to make Tinder Plus sound even more obnoxious would be to call it a Spinster Special.
What stands out about this new business model is this: it’s bad business.
In an email to Bloomberg Business, Tinder spokeswoman Rosette Pambakian justified the price points by saying “lots of products offer differentiated price tiers by age, like Spotify does for students, for example. Tinder is no different; during our testing we’ve learned, not surprisingly, that younger users are just as excited about Tinder Plus, but are more budget constrained, and need a lower price to pull the trigger.”
But Tinder’s core demographic is people under 30. More than half — 53 percent, to be exact — of Tinder users are between the ages of 18 and 24. Over seven percent of Tinder users are 13 to 17 years old. That means there are more teenagers on Tinder than there are 35 to 44 year olds on Tinder; that demo makes up 6.5 percent of the users.
What does it mean, then, that Tinder is turning to the 30-plus crowd for the bulk of its funding? Tinder is trying to get peripheral users to subsidize their core users. Which means Tinder still has not solved a very basic problem: how to get the core users to pay for themselves.
This setup — sizing up your customer base and charging people what you think they’ll be willing and able to pony up — is called consumer-based pricing. It’s the kind of thing car dealers do all the time. It gives a company flexibility, but, as Wharton professors Jagmohan Raju and Z. John Zhang write in Smart Pricing: How Google, Priceline, and Leading Businesses Use Pricing Innovation for Profitability, “an obvious problem with this pricing approach is that it inevitably alienates those customers who end up paying more than the successful hagglers.” This “discriminatory pricing” can backfire:
This kind of strategy can train good customers to behave badly. If a buyer knows the price she will pay depends on her perceived willingness to pay, she certainly does not have any incentive to dwell on how good and how valuable the seller’s products and services are… The game leaves both sides less happy than they might be.
TL;DR: Don’t expect your fringe customers to do the heavy lifting while your base gets a discount.
Tinder has a tremendous user base right now: 30 million people registered who, collectively, view 1.2 billion prospective matches every single day. Tinder’s parent company, IAC, also owns Match.com, OKCupid, and How About We, so it effectively controls the entire online dating marketplace. Tinder co-founder Sean Rad told CNN that international usage of Tinder has doubled since December and that Tinder is the “dominant” dating platform in 56 countries.
But a huge part of Tinder’s appeal has always been its ease: simple to sign up, simple to swipe, simple to text, simple to do… whatever it is you want to do after that. Adding a barrier to entry, particularly one as steep as $10 or $20, could change all of that. Tinder’s competitors, like Hinge and Coffee Meets Bagel, are free.
Tinder is less valuable to people over 30 than it is to people in their twenties and teens. And maybe, at a lower price point, that wouldn’t matter. If the difference were between, say, five and eight dollars a month, it’s possible no one would notice or care. But even the younger Tinder Plus price is eyebrow-raising: $9.99 a month? Once you get to the price for users aged 30 and over, the idea becomes even more absurd. Who would actually pay $19.99 a month for Tinder Plus? Nearly $240 a year, and for what?
It remains to be seen how “limited” likes will be on the free model, now that unlimited likes will be a privilege you have to pay for. And Rewind is a feature users have wanted for a while; can’t let that one slip-of-a-swipe send your true love away into the Tinder-ether, never to be seen again! So fine, the features are nice. A welcome addition, truly. But 20 bucks a month? That’s more than double the cost of Amazon Prime; it’s twice as expensive as Netflix or Spotify Premium, four times as pricey as Pandora One.
In fact, if an adult were so inclined, he or she could approach another person at a bar — this is a crazy idea, I know, but stay with me — and use that $20 to buy a couple of drinks.