Match Group announced on Tuesday that it will discontinue its dating app live-streaming service and cut 6% of its workforce. The news was announced during the dating app giant's second-quarter earnings report.
The move will see Match shift its focus to other services, including generative AI.
The decision to end live streaming directly affects dating apps Plenty of Fish (POF) and BLK, which launched free live streaming features “Live!” in 2020. These features were an attempt to encourage users to go on virtual dates during COVID-19 lockdowns. Users could also purchase “live credits” to send streamers on virtual dates, similar to TikTok Live.
According to posts on their respective help pages, BLK's live feature will end on August 19th, and POF users will no longer be able to live stream after August 31st.
Additionally, Match will shut down its HAKUNA app, which it acquired through its 2021 purchase of social networking company HyperConnect. The app featured livestreams where users and hosts interacted primarily in South Korea and Japan.
The company said ending livestreaming makes sense in a post-pandemic world because it was a popular feature when users were desperate to connect during quarantine. As the world weathers the pandemic, the company is seeing a change in user behavior.
During the company's earnings call with investors, Match Group CFO Gary Swidler highlighted how customer behavior has changed since 2020.
“You know, the world was different when we got into livestreaming a few years ago — before COVID-19 and all the other issues — but we thought at that point that livestreaming would be an attractive ancillary additional revenue stream for us,” Swidler said.
Hinge, another dating app owned by Match, quietly shut down its in-app voice and video calling features last year for similar reasons, as more users returned to in-person dating.
Revenue sharing also influenced Match's decision.
“Livestreaming incurs similar costs as any other dating business, with one big difference: we have to pay revenue shares to the livestreamer,” Swidler says, “which can be upwards of 20% of revenue, so that's an additional expense that we don't really incur with our dating business.”
There is also stiff competition from social media platforms like TikTok.
“While we had expected to grow live streaming revenue by approximately $60 million this year, the increased competition and changing environment and trends we face have made it much more difficult to expand our revenue base. Moreover, even in the best-case scenario, reaching the scale necessary to achieve reasonable profit margins from our perspective would require significant investment over a number of years,” Swindler added.
The decision to end live streaming is expected to result in revenue losses of approximately $60 million per year, but is also estimated to result in cost savings of $13 million per year.
Match told investors the shift will allow it to focus on businesses where it has “proven advantages,” such as generative AI.
As for the job cuts, Match Group plans to redeploy some of its hyperconnected employees with artificial intelligence expertise to its popular apps Tinder and Hinge. The company has stepped up its focus on AI in recent years, including an AI-powered photo selector for Tinder profiles.
As for Tinder, the app has experienced a seventh consecutive quarter of declining paying users, with numbers falling 8% to 9.6 million in the second quarter from 10 million in the previous quarter.
In February 2023, Match laid off 200 employees, or 8% of its workforce.