Fuck no.
That’s the simple answer to the question that arose when Jupiter Research reported that 2005 would mark the second consecutive year in which mainstream dating sites would lose their steam. Jupiter analyst Nate Elliot said online dating would grow by 9 percent in 2005, compared to 19 percent in 2004 and 77 percent growth in 2003.
Clearly, that’s cause for concern, but to a man, adult dating site operators said growth hasn’t slowed at all. In fact, quite the opposite.
“We haven’t seen a slowdown in the growth of number of members joining per day or the revenue that we bring in and pay out to our affiliates. That has been on a tear for the past six years,” says AdultFriendFinder founder Andrew Conru.
Executives at Eroticy, SexSearch, IwantU, and DateApp echoed the sentiment. Eroticy, for example, grew by 1 million members in 2004 and will easily surpass that number this year, according to director of operations Michelle Pendenza.
While everyone in the adult dating space seems to be cozy at this point, two things are clear—mainstream dating sites have different factors at play and the slowdown in growth will come.
“Oversaturation is definitely a possibility, but the difference with adult vs. mainstream is with adult you have the freedom to offer so much more to your customer,” says Pendenza, whose company also owns mainstream dating site Cherish.com. “On mainstream dating sites there really is a limit to what you can offer, but with adult you can give them an outlet to search for sex and content to occupy them.”
Predicting when market saturation will occur is somewhat of a crapshoot, but it’s obviously on everyone’s minds.
“In every industry you get to a point where almost everyone has used the product and you go into service mode. The mainstream dating sites probably had a one- or two-year jump ahead of the adult side, and that’s why the mainstream dating sites have gotten to this point. Almost everyone in the dating market has tried an online dating site,” Conru says. “On the adult side we see more legs on the growth. Obviously the growth as an industry is not as much as it was two years ago, but there’s definitely growth to be had.”
In other words, it’s time to focus on innovation or get left behind.
“The constant growth rate that we notice is a sign that the market is still not fully saturated. There is an enormous potential that is still not fully utilized, but with all the new players out there things will start moving faster,” says Sam Hourani, IwantU.com’s marketing director.
Sex will always be a commodity, but the pool that trades in it could be changing as well. Ideally, the growing acceptance of sexuality in mainstream culture will allow adult dating sites to flourish for sometime, SexSearch’s chief marketing officer, Adam Small, says. “I think that society is evolving and people are more open about expressing themselves sexually, and I think that we are going to see more and more people with healthy sexual appetites head online looking for sex.”
However, if you’re an established company like SexSearch or IwantU, you’d be smart to be wary of an upstart like Georgia-based DateApp, which provides turnkey online dating software scripts that allow anyone to operate his or her own dating portal. DateApp has been launching, on average, 15 new dating sites a day, according to CEO John Michael Cataldi.
If there’s a ceiling to market growth, DateApp is probably going to have something to do with finding it. The key to growth, Cataldi says, is adaptation and targeting.
“If you own a swingers’ site and cater to swingers around the world, or you own a gay site and don’t have a targeted market based on activities or geographic location or what have you, all the sites begin to have the same look, the same feel, and there’s no true quality to the individual—he’s going to an overly stuffed database,” he says. “You can have 18 million profiles, but what does that mean to an individual? How many of those people are in your community? Beyond that, the sites aren’t really geared towards a specific genre.”
The future, Cataldi says, is developing sites that are specific and community-oriented, such as a dating site for gay people who like skiing. He points to FriendFinder’s recent acquisition of Spring Street, a dating network that includes personals found at Salon.com and TheOnion.com and essentially caters to hipsters, as an example of such forward thinking. Spring Street runs independent of the FriendFinder network.
While Conru acquired Spring Street for its profit potential, he still sees a strong brand as the cornerstone of success and expects FriendFinder’s continued growth to come from not only acquisitions, but expanded services.
“The growth going forward is mostly going to be brand extension and providing higher value per member that we’re able to achieve through the size of our network,” he says. “We’re learning the motivations of our members and can start to give them products that expand the revenue per member.”
