Nisan Gabbay has an excellent analysis of the site at HOTorNOT.com Case Study: Mixing free and premium services
My wife and I celebrated our fifth wedding anniversary a few months
ago. I’m happily married, so I haven’t visited HotOrNot in years. I was fascinated by the description of the dating service, which I don’t think they offered when a friend first told me about the site.
“Thus HOTorNOT was able to fill some pretty basic human needs in a way
that no other online service had before. This would later translate
into financial success once HOTorNOT offered its premium dating service
because their cost of customer acquisition was so low - zero. The
largest cost associated with operating a traditional online dating site
is the cost of customer acquisition, which even for successful sites
can be 50% (or more) of revenue. Because HOTorNOT attracted users with
its free rating service, it could offer its dating service for the low
price point of $6 per month. This is a price that traditional dating
sites can’t compete with because it generally takes $15-$30 to acquire
a subscriber for a traditional dating service.”
I wouldn’t think that advertising would be very appealing on the site except to a few advertisers like Budweiser. So the idea of adding dating as a way to make money seems terrific. As the article says:
“Pay $30 a month to troll through profiles? Hell no! Pay $6 to contact a
hot girl who already said she thinks I’m hot too? Probably.”
Neat to see somebody come up with a way to compete not only with the usual paid dating sites (Match, eHarmony, Yahoo) but also with Craigs List and PlentyOfFish.
Can’t recommend this article - if you’re into web startups - highly enough.