Match Group announced on Tuesday that it is discontinuing its livestreaming services across its dating apps, resulting in a 6% reduction in its workforce. This decision was revealed in the company’s second-quarter earnings report.
The livestreaming features, known as “Live!” on Plenty of Fish and BLK, were introduced in 2020 as a response to the COVID-19 lockdowns, aimed at facilitating virtual dating. Users could also buy “Live Credits” to interact with streamers, much like TikTok Live.
BLK’s livestreaming feature will end on August 19, while POF’s will cease on August 31. Additionally, Match is shutting down the Hakuna app, which was acquired through its purchase of Hyperconnect in 2021 and primarily served users in Korea and Japan.
Match Group’s decision reflects a shift in user behavior as the world moves beyond the pandemic. CFO Gary Swidler noted that while livestreaming was a valuable feature during isolation, the current landscape has changed. “When we launched livestreaming a few years ago, the world was different,” Swidler said. “Livestreaming at that point provided an attractive additional revenue source for us.”
The company’s move away from livestreaming is also influenced by financial considerations. Livestreaming incurs significant expenses, including revenue shares for streamers, which can be as high as 20% of the revenue. This adds to the overall cost, which is not present in other dating business operations.
Furthermore, competition from social media platforms like TikTok has made it increasingly challenging to grow livestreaming revenue. Match Group projected a $60 million revenue contribution from livestreaming for the year but deemed it difficult to achieve given the competitive landscape and the need for substantial investment.
Despite the anticipated $60 million annual revenue loss from ending livestreaming, Match Group expects to save approximately $13 million in annual costs. The company plans to redirect its focus to areas with proven advantages, such as generative AI. This includes leveraging expertise from former Hyperconnect employees to enhance popular apps like Tinder and Hinge.
Match Group has also faced ongoing challenges with Tinder, which reported an 8% decline in paid users to 9.6 million in Q2, continuing a seven-quarter streak of decreases. Earlier this year, in February 2023, the company laid off 8% of its staff, or about 200 employees.
Match Group has not yet responded to requests for further comments on the recent developments.
