When it comes to finding a date, significant other, or a way to expand ones social life, individuals are spending less time with the old fashion ways of meeting people such as at bars, work, or being matched by mutual friends, and more time at their computers searching for potential partners using an online dating website. The top four dating sites in regards to customer ratings as well as number of members are Match.com, eHarmony, Zoosk, and Chemistry.com (“Top 10 Best”). Each site has minor differences that define their place in their market and completing a market structure analysis will hopefully result in reasons why the online dating market is so successful.
The four major online dating sites all feature basic information such as location, interests, career, level of education, prior relationship status, values, and religious preference, but they also have or are constantly working on ways to stand out from the other sites. In regards to online dating, most changes that occur involve adding new features to the websites. Some examples of recent additions include eHarmony’s Something to talk about feature which allows users to fill in more information about their interests in hopes to have common interests between themselves and the potential match which may give them something to talk about and start a conversation (“Little Red Rails”). Another example is Chemistry.com which at registration has their members fill out a questionnaire similar to a personality test or Myers Briggs that helps the user find whom they are most compatible with (“Chemistry”). Match also has a new feature which currently no other site has- the Match.com guarantee which states if the user does not find someone within 6 months, they will receive another 6 months for free (“Dating sites reviews”). None of these features have a long delay for new product entry because the companies just have to change features on their website and do not have to deal with production and manufacturing as well as distributing. There is no extensive research documented on the reason for changes and most changes are not heavily advertised at first except for sending new features to current and past users and eventually some television and print advertisements.
Currently, the barriers to entry of a new site include upfront cost considerations for web development, IT infrastructure, and advertising to ensure ways to stand out to pre-existing sites many of which already have over a million members. New dating sites also need to be credible and have success stories that whether or not are true, are believable. Currently, the market has several service providers where there are no governmental issues or current government intervention with consolidation of firms that may create a monopoly.
Using eHarmony as an example, data shows the company currently has approximately 275 employees with between 70,000 and 90,000 active members (“Dating sites reviews”) so the companies do not need to employ a lot of people in order to make their company successful because they rely heavily on computer programs to do the matching. With the average cost of membership being over $30.00 per month, all four major dating sites are making a significant amount of money for the services they provide with very little overhead costs to succeed (Top 10 Best Dating Sites).