For Online Dating Sites, a Bumpy Road to Love


In August, Spark sold 16 percent of its stock to the investment firm Peak6, laid off workers and closed its Israel office.

But Brad Goldberg, president of Peak6 and Spark’s new board director as of August, said that through modernizing the company’s technology and focusing on how to effectively market its two best known sites — JDate and ChristianMingle — the company will adapt and “take advantage of the changing industry landscape.”

JDate was created in 1997 in a West Los Angeles condominium; ChristianMingle was added in 2001. Spark Networks (which trades under the ticker symbol LOV) eventually grew to about 30 dating sites, but the crown jewel has always been JDate.

Mr. Goldberg estimates that 70 percent of the Jews of dating age in the United States have had some contact with JDate or JSwipe, with about one million registered users.

“We’re unambiguously touching a greater percentage of the Jewish population than ever before,” he said.

That may be the case, but according to Spark Networks’ 2015 filings with the Securities and Exchange Commission, the number of paid subscribers to its Jewish networks declined to around 65,000 last year from a little over 85,000 in 2012. Its total for all networks dropped by more than 55,000 people, to under 204,000.

This comes at a time when an increasing number of Americans are trying to find partners online. According to the Pew Research Center, 15 percent of Americans have used online dating sites or mobile apps, compared with 11 percent in 2013. Spark Network’s revenues fell nearly 22 percent from 2014 to 2015.

Some of the decline could reflect Spark’s management turnover, but it is also indicative of the challenges facing the online dating industry.

There are about 4,500 online dating companies, according to a report by the market research company IBISWorld, but the majority are tiny. The largest player in the field is the Match Group, with 51 dating sites; over the last few years alone it acquired such high-profile companies as Tinder and Plenty of Fish.

“It’s never been cheaper to start a dating site and never been more expensive to grow one,” said Mark Brooks, a consultant for the internet dating industry who also runs Online Personals Watch. Part of the problem, he said, is that 70 percent of internet dating in the United States is now on mobile.

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The number of paid subscribers to Spark Networks’ Jewish sites declined to just under 53,000 this year from a little over 85,000 in 2012.

Dating apps usually start by offering their services completely free to bring in new users. There are then two ways for the services to make money: advertising and turning free users into paying ones.

“It used to be 10 percent of those who registered converted to paid,” Mr. Brooks said. “Now it’s more like 2 to 3 percent.”

Advertising can be tough to get, said Tom Homer, editor of the website Dating Site Reviews, and on a mobile device it does not pay much because there is less real estate available than on regular websites.

Other tensions are pulling at the online dating industry. Do consumers want to find a special someone or just anyone? Internet dating used to mean filling out questionnaires to match interests and culture. With sites like Tinder, Bumble and Hinge, it is all about who is nearby and available.

Some of the difference, of course, is generational. Younger people are more likely to be interested in casual dating and more likely to use mobile devices for dating, the IBISWorld report states.

But, as Mr. Goldberg, the Peak6 president, sees it, now “there is growing frustration as people tire of swipe-based apps.” He added, “Consumers want companionship and deeper interactions, and the industry will have to adapt.”

Some also see a move toward ever more niche sites like MouseMingle.com (Disney lovers) and GlutenFreeSingles.com (the name says it all). But, when you slice the pie ever thinner, “you’re also slicing your membership base,” Mr. Homer said.

Amarnath Thombre, chief strategy officer of the Match Group, disagrees. He does not see one approach growing at the expense of the other. Rather, he said, online dating will expand to encompass more and more categories of people.

The wave of the future for online and mobile dating, he predicts, is the growing use of artificial intelligence and better data science.

Artificial intelligence, by pulling from a variety of places — say, a user’s Goodreads list or Instagram or list of charity donations — could more effectively match people than relying simply on a person’s own profile or questionnaire, he said.

Spark Networks, of course, already offers niche products, but Lisa McLafferty, Spark’s new chief revenue officer and chief marketing officer at Peak6, says its aim is now to “refresh the brand.”

“Over the last few rounds of management, the brand got a little lost,” she said. With JDate, “we’re seeing an evolution away from a marriage focus and religiosity and more to connecting on a cultural-values plane.”

With ChristianMingle, the plan is to move in the other direction. The site, consumers say, has become too broad-based, with a variety of Christian date seekers, and the goal is to pivot back to its evangelical roots, Ms. McLafferty said.

Despite these efforts, Mr. Young, the former Spark executive, said he would not be surprised if Match Group acquired Spark in the near future “so they have the No. 1 players — JDate and ChristianMingle — in each of these categories.”

Mr. Thombre, of the Match Group, said he would not speak publicly about his company’s acquisition strategy.

Whether JDate and ChristianMingle end up refreshed by Spark or in a new marriage remains to be seen. Mr. Goldberg did not want to address that issue, but he said he was certain of one thing: “I don’t know what it will look like, but I bet the world of online dating in 18 months to two years will look completely different than it does today. That’s just the way we’re moving.”

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