If you want to get a great app out there – maybe like Spotify, or Tinder – you’re going to want to be on an app store (or, probably, more than one). This is essential because it’s just where the action is… your customers won’t find you unless you’re front and centre. But it comes with a downside: these digital marketplaces make their revenue by taking a chunk of yours. There’s a way around this: become so big that you can forgo app stores altogether. Companies like Spotify and Fortnite-maker Epic Games have advised customers to sign up through different means. Now, the number on digital dating site has joined that privileged group.
Match Group’s share price has appreciated by an incredible 89% so far this year!
Source: Yahoo Finance
According to Bloomberg, Match has created a new default payment option that forces users skip Google Play (the Android App Store) and enter their payment info directly into Tinder’s app. Once done, the app remembers the information, and removes the option to swap back to Google Play for future purchases. That will let Match skirt around Alphabet’s 30% commission fee for subscribers, which is (of course) fantastic news for Match shareholders.
In addition to Match, streaming video on demand market leader Netflix is eschewing app stores. According to The Seattle Times, Apple made a cool $257 million last year from its Netflix commission alone. But Netflix, like Epic Games, Spotify, and Match, is now so big that it doesn’t need app stores – everyone knows about these companies, and new subscribers don’t have to stumble across them in an app store. They go where they’re told to access these platforms.
Match is a real success story. CEO Mandy Ginsberg told analysts earlier this year that only 3% of dates were made online ten years ago. Today, that figure is 30%. Match is largely the company behind this dating explosion, and there’s still plenty of room for growth. What’s more, without costly app store fees on the horizon, Match will be in a position to keep more of the money it makes to itself.
Disclosure
Dominion holds Match Group in its Global Trends Ecommerce Fund.
Author: Theo Leworthy
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