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INTERVIEW: Cupid To Trial Pay-As-You Go Subscription In The US

LONDON (Alliance News) - Online dating operator Cupid PLC is going to test a new pay-as-you-go ...

Online dating operator Cupid PLC is going to test a new pay-as-you-go subscription model when it launches one of its websites in the US in the summer, and will roll the model into other markets if it proves successful, Group Finance Director Niall Stirling told Alliance News.

The company will test a pay-as-you-go model when it launches Uniform Dating in the US later in the summer, after research showed that some people would rather pay for a block of time than the traditional dating site subscription method of paying a monthly fee.

"One of the things we will be doing in the US is building a new platform that allows users to use different subscription models. If it works over there, then we will look to bring that flexibility into some other markets as well," Stirling said.

Uniform Dating is one of the company's most popular dating sites, and has just gone live in Australia. In the UK, the company recently added to its portfolio by launching over-50s product Lovebeginsat.com, a site it also launched this week in the US.

"There will be a lot of spend going into Uniform Dating in Australia in the third quarter, and we will also launch the website in the US in the quarter too," said Stirling.

Cupid is also looking at products aimed at the younger demographic, to potentially tap the rising popularity of mobile social dating apps.

"Mobile social dating apps tend to have a younger demographic than our traditional sites which tend to be aimed at 25 years old and above, so it is an area that we don't currently address and will certainly be looking at going forward," said Stirling.

However, its mainstream dating websites like UniformDating.com and Cupid.com, as well as its mature sites for the over 45's, have the largest number of subscribers and are generating the most revenue. It also sees these sites as the biggest growth opportunities going forward, driving revenue in its main markets of North America, Australia, the UK and France.

"The Australian market is interesting because its behind North America and Europe in terms of mobile adoption, which means there is a really interesting opportunity there for that," said Stirling.

"Obviously geographically the US is a huge place, but it is competitive. However we see it as a big growth opportunity for us," he added.

The internet dating company restructured last year, selling off its casual dating businesses for just over GBP45 million in order to focus on building an international portfolio of niche and mainstream dating websites. The casual dating sites represented 70% of the company's overall revenue.

The casual dating sites were aimed at people who were looking for heavy flirting and fun, and included the sites BeNaughty.com, Flirt.com and CheekyLovers.com, but Cupid sold them as the sites were imbalanced between males and females, meaning too many men.

Last month, Cupid said it was expecting to post a smaller-than-previously-anticipated loss for the first half of the year, as it continued to manage costs tightly. It expects to report a loss before interest, tax, depreciation and amortisation of around GBP3 million, even though revenue for the first half will be around GBP7 million, slightly lower than its earlier expectations.

"We haven't spent money in the first half on marketing. There are a number of product launches on the way, and some of those are coming through slower than anticipated... the re-engineering our our product base has been slower than expected too. Because revenues are lower than expected, that means that marketing is slower than expected," said Stirling.

Stirling said the company is currently on track for a positive run rate for profits when it enters 2015.

The company also sees advertising-technology or "ad-tech" - targeting adverts to customers based on their data - as a significant opportunity going forward. It said initial revenue from ad-tech data will be coming into the business later on this year.

"We're moving into becoming a data ad-tech business during the back end of 2014, and we will see our first revenue from ad-tech in the second half of the year. We will build on that in the following year, and eventually expanding into digital services," said Stirling.

Source: Morningstar.co.uk