Match Group revealed on Tuesday that it is halting livestreaming services on its dating platforms, leading to the termination of 6% of its staff. This announcement was made during the company’s earnings call for the second quarter.
In making this change, Match Group is reorienting its focus towards other initiatives, notably generative AI technologies.
The cessation of livestreaming services will particularly affect the Plenty of Fish (POF) and BLK dating apps, which had introduced a complimentary livestreaming feature named “Live!” in 2020 as an encouragement for virtual dating amidst the COVID-19 lockdowns. This feature also allowed users to buy “Live Credits” to gift to streamers, mimicking the interaction seen on TikTok Live.
Updates on their official help pages note that BLK’s livestreaming will cease on August 19, while POF will see the termination of this service by August 31.
Additionally, the Hakuna live app, a part of the Match Group following its acquisition of Hyperconnect in 2021, will also be discontinued. The app primarily connected hosts with users in Korea and Japan through live interactions.
Match Group has rationalized the discontinuation of livestreaming offerings, stating that these features gained popularity as a means of connection during the isolation periods of the pandemic. Now, as the world progresses past these times, user preferences have evolved.
During the earnings discussion with investors, Match Group CFO Gary Swidler highlighted how consumer habits have shifted since the arrival of 2020, noting the initial attractiveness of livestreaming as a supplementary revenue stream, a perspective that has since changed in the post-COVID landscape.
Another app under Match’s umbrella, Hinge, similarly phased out its in-app audio and video calling features last year, responding to a resurgence in preference for face-to-face encounters.
Earnings sharing was also a significant factor in Match Group’s decision to move away from livestreaming, as Swidler pointed out the need to distribute a portion of the revenue to livestreamers, an extra cost not present in other facets of their dating business model.
Match Group also faced formidable competition from social media giants like TikTok, with Swidler acknowledging the challenges of growing livestreaming revenues amidst these pressures and the substantial investment required to achieve viable margins.
The halt of livestreaming is anticipated to bring about an annual revenue shortfall of approximately $60 million for Match Group, albeit with an expected $13 million saving in costs.
The company is steering its strategic focus towards areas with “proven advantages,” such as the exploration and incorporation of generative AI technologies.
As for the layoffs, there is an ongoing effort to reallocate some of Hyperconnect’s staff with expertise in artificial intelligence to renowned apps like Tinder and Hinge. This move underscores Match Group’s intensified push towards AI innovations, including AI-driven features for enhancing user profiles on Tinder.
Talking about Tinder, the app has been witnessing a decline in its paid subscriber base for the seventh consecutive quarter, with a downturn of 8% to 9.6 million in Q2 from the 10 million reported in the previous quarter.
In an earlier move this year, Match Group had already reduced its workforce by roughly 8%, equating to 200 employees.
Compiled by Techarena.au.
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