Snap Interactive, Inc. (STVI): Growing Population of Singles Explodes the Online Dating Market

Snap Interactive, Inc. develops, owns and operates a social dating application for social networking websites and mobile platforms. The company’s flagship brand, AYI.com, which stands for “Are You Interested?”, has become one of the largest social dating applications on the Internet with over 70 million installs, including over 25 million Facebook connected singles.

Snap Interactive is benefiting from a number of demographic and social trends. The key demographic trend is the rising number of singles in the United States and Western society in general. Especially in the United States, the total number of adult singles in the U.S. population totaled 37.7% at the start of 1977, and as marriage continuously declined, the adult single population is now 49.7% of the population. For the first time in United States history, the number of single people equals the number of married people.

The number of single-person households and couples that cohabitate have seen nearly a straight line increase over the past three decades. Although some argue that there has been an ongoing decline in marriages due to a rejection of religious values, there is no evidence of that. Over 78% of the U.S. population identifies as a member of some denomination of Christianity, and those that identify as agnostics or atheist are in the low single digits. Complex structural economic and social factors have shaped these changes in our society. As women have entered the workforce, the role of stay-at-home wives that focus raising children is now a rarity. Over the same three decades, the income of the middle class has stagnated or declined while the share of the country’s income to the top 1% aggressively grows. One can recall a period of time in the past when the working husband was able to afford a mortgage, a car for himself and one for his housewife, and health insurance for the entire family. That shifted in a matter of a few decades to households where both husband and wife have to work to maintain the same benefits as the prior generation. Marriage simply doesn’t play the role it had in the past.

The economic reasons also play a role in increasing divorce rates which range anywhere from 41% to 50% depending on how the divorce rates are measured. There are many social factors which play a role in the increasing number of singles as well. The negative stigma associated with someone that was never married has significantly declined. The emphasis on individualism in America to enhance consumer activity has further atomized society and decreased a sense of community which also cuts into the value of extended nuclear families. All the evidence indicates that the demographic trend of increasing singles will continue.

With the increasing population of singles, comes the increase of online dating which has grown into a $2.1 billon industry. Revenue from mobile dating is in the neighborhood of $400 million. This industry continued to expand at a rate of 3.5% a year till now and wasn’t slowed by the Great Recession, and continues to attract investors. Currently, about 38% of Americans that describe themselves as single and looking have used a mobile dating app or an online dating Web site, which is a huge increase from 2005, when about 11% in that same category used online dating. About 23% that use online dating find a successful relationship, and since 2005, nearly a third of the couples that have married initially met online.

There are 4,900 companies that run online dating sites, and the online dating industry is expected to add 100 new companies a year for the next 4 years. A key driver of growth has been the introduction of systems that match users of mutual interest according to content-based algorithms, which are based on factors that include a user’s age, education and income, and collaborative filtering-style algorithms, which is based on prior communications between users of similar interests.

Snap Interactive’s AYI online dating app matches users of shared interests and friends and allows the user quick and easy creation of a rich authentic profile so they can begin meeting other singles locally right away. Their app is integrated across Facebook, iPhone, Android, and the World Wide Web. The company has over 2 million monthly active users, and captures over 10,000 new users every single day. Snap Interactive recently reported their sixth consecutive month of subscriber growth, with an increase in their active subscriber base of 24% during the first five months of 2014, and this was while cutting marketing and advertising costs by 25% since January 2014. Snap Interactive has clearly gained growth momentum which should continue for years.

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