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Can online dating services raise prices?

Bambi Francisco at AlwaysOn writes:

InterActiveCorp's ( IACI: news, chart, profile ) Match.com is one of the most popular sites online, but its ability to raise prices next year (should it care to) looks questionable even though online dating is the leading service consumers are willing to pay for.

The onset of the site called Friendster, a new so-called social-networking site that burst onto the Internet scene through word-of-mouth marketing and its unbeatable cost to the consumers -- zero, invariably caps Match.com's ability to charge. Someone recently pointed out to me that he saw the same people on Match that he saw on Friendster. So, why bother paying to get on Match?

(See The middleman's dwindling value.)

Bambi overlooks the fact that eHarmony is currently charging $50, more than any other online dating service that I know of. People are willing to pay a premium for a premium service.

It is also doubtful that Friendster will stay free much longer. The company is supposedly worth $30 million, so they are going to have to start charging money soon to justify that.

But people get mad if they feel they are being ripped off. The recent angry reviews of JDate here at eDateReview.com demonstrate this. People are probably more willing to pay a premium price for a new service with slicker marketing than to suddenly pay more for the same old service. Given the large number of online dating sites out there, it's an unwise business move to alienate users the way JDate did.

posted November 13, 2003