Tinder Forecasts Rise in Paid Subscribers, Ad Revenue

App Expects More Advertising to Roll Out in Four to Eight Months

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Tinder expects its paid subscribers to double by the end of the year, according to a new note from Cowen and Company analysts led by John Blackledge.

While the matchmaking app is free to use, last year the company launched a subscription model with a monthly fee for premium features such as "super liking" (a super-charged way of flagging up one's amorous intentions) or "rewinding," a feature that allows you to go back and like someone that you accidentally rejected, or "swiped left on." The firm hosted a chat with Gary Swidler, chief financial officer of Tinder's parent company, Match Group, where the executive described efforts to monetize the dating app as being "ahead of schedule."

With a la carte revenue from new features performing better-than-expected through the first quarter of 2016, management has space "to 'take some swings' by tweaking or adding to the product, which hasn't changed substantively since the rollout of the 'Super-likes' last November," according to the analysts.

Although the forecast is for the doubling of subscribers, not total users, during its May earnings presentation the company said it currently has over a million subscribers. Users of the service spend roughly 35 minutes per day on the app and swipe left or right 140 times, the Cowen and Company note says. This leads the analysts to believe advertising could be a substantial source of revenue in the future. They expect more advertising to begin over the next four to eight months, with revenue from ads starting to grow more significantly in 2017.

The company did draw criticism for charging older users twice as much as their younger peers. It made no changes to its pricing model following the backlash.

Match went public in November of last year at $12 a share, closing on Thursday at $13.54. The firm also owns dating services OKCupid and Match.com.

-- Bloomberg News

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