Grindr CEO George Arison Talks Premium Membership Tier

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Tim Stenovec** (0:07)
Well, shares of the LGBTQ dating app Grindr fell on Friday. After the company's improved full year revenue forecast still trailed the average analyst estimate, the company said it now expects full year revenue to be about $540 million, up from the $535 million, and just-de-de-de, about $232 million, up from $227 million. It also said it expects to finish the year with, quote, meaningfully fewer employees than we had originally planned. We've got George Arison with us, the CEO of Grindr, he joins us here in the Bloomberg Business Week studio. Hey George, welcome back.
You're about five months into the debut of some of these new AI features, some of these new subscription tiers that you're testing out. Can you just update us on how that's going?

**George Arison** (0:48)
So the tests are going really well. The product features are quite popular with users and they work really well. The product itself is very tested. We're now trying to figure out what the price should be. We've never launched anything at this price point before.
That's very premium focused. Small number of users will ever use this product. And so we've been iterating on what's the best way to position the product and explain it to them.

**Tim Stenovec** (1:13)
What are you thinking about right now?

**George Arison** (1:14)
We tested 80 bucks as the baseline price and that did very well.

**Tim Stenovec** (1:19)
Annually?

**George Arison** (1:20)
No, monthly.

**Tim Stenovec** (1:20)
Monthly, wow.

**George Arison** (1:21)
Which is 2X our previous highest price point. We've tested prices all the way up to 375
And there's a broad range of where it might land. We'll see.

**Tim Stenovec** (1:34)
That is extremely premium.

**Norah Mulinda** (1:36)
Very premium. Tell me about the $80 though. What will that entail if I am paying $80 a month? What am I getting out of it?

**George Arison** (1:43)
So historically, Grindr's premium or paid tiers have given you access to more people. You would see more people based on how much you pay. Extra gets you 500 people. Unlimited gets you unlimited number of people.
This one gives you a lot more information with the people you see. So on the profile, you have now AI-generated information about a person. We go through all your messages and we create a short list of people you should be talking to and summaries of all the conversations that you've had with them, which is like a short list of your prime targets. And then we also give you recommendations of people you should engage with based on what we know about you and what we know about them. So it's a very different set of features that we have previously.

**Tim Stenovec** (2:24)
Yeah, when you're testing out the different price points, what are you noticing about the way that people are, I don't know, the way that they're thinking about the stickiness of it or just how receptive they are to it? Does it change based on location?

**George Arison** (2:39)
Well, this product is more sticky than other things we thought, than we thought it would be, which is great. On the price point, obviously there's elasticity between higher the price, less people try it, but there is also some no elasticity at the top because some people just don't care.
And I think that's kind of part of this like, how many people do you want in the product versus how much revenue do you want to make from it in total? And for us, we've said publicly, this is going to be the driver of revenue growth in 27 and 28 And so it's a balance of finding like, what's the highest price point for the total number of users you want to be in the product.

**Norah Mulinda** (3:13)
So when you think about the user base and you dig into those individuals that be willing to pay that price, what demographics come up? Are we talking about younger users, older users? Where does it fall?

**George Arison** (3:22)
So Grindr released some demographic data last year in November.
46% of our users are under 29, so in that kind of 18 to 29 age range in the US. And their pay rates are actually quite low. But we like keeping it that way because we want them to have a really awesome experience in the free product. And then as users age, the pay rates increase significantly and kind of peak at that 40 plus age cohort. This product is very much targeted at the older user who wants to pay. The ones with more money. Yes, because they have a lot more disposable income. Exactly.