Virtual gifts - why they just might work
James Hong, one of the founders of HotOrNot.com, emailed GigaOM yesterday to announce that they are doing away with paid subscriptions to their “Meet Me” dating site. Instead, they’re turning to a mostly ad-based revenue model, as well as selling virtual gifts.
The concept of virtual gifts is a brilliant idea — even Facebook is trying to get in on the action too, testing their own virtual gifts. It’s a concept that’s been proven to work in international markets with sites like Cyworld, but whether it will catch on en masse in North America is another question. A quick survey of the discussion out there shows most people are pretty negative on the idea. Where it might stand a chance, though, is if there are enough guys out there willing to shell out money to get the attention of girls — and if girls don’t find virtual gifts cheesy, tacky, or just plain stupid. Put it another way, it’s a concept that will work only for dating purposes. Hence, it’s probably not going to work for Facebook, since Facebook isn’t a dating site per se (at least nobody thinks of going to Facebook for that reason). It just might, however, work for HotOrNot.
With paid (and even free) dating sites losing subscribers to free social networks, making themselves free was a move that HotOrNot had to make to survive. The problem with free, though, is that it attracts the looky-loos, unemployed bums, players, stalkers, etc. When real money is involved, you can weed out the guys and girls who aren’t serious about meeting people. For HotOrNot, virtual gifts could go a long way to filling that gap they left by going free.
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