Angie's List, the online local business reviewer, will offer services for free
Increased competition and sluggish membership rates are forcing the pioneer of online business reviews to try a new model to attract more users.
A plumber installs a kitchen faucet on a home under construction in Sacramento, Calif., in 2013.
Rich Pedroncelli/AP
Angie鈥檚 List, the 20-year-old, membership-only business review site first imagined by Angie Hicks while she was looking for a contractor in suburban Ohio, wants to turn itself into a 21st-century, digital reference guide and e-commerce platform.
To do that, the company needs to convince a lot more people to come to its website in search of local , so starting this summer, Angie鈥檚 List will become free, said Scott Durchslag 鈥� appointed CEO of the company six months ago 鈥� on Thursday, before the company's meeting with investors and analysts.
But free won鈥檛 pay the bills, so Angie鈥檚 List also will launch a tiered-membership model this summer. People will be able to view ratings of local businesses and read reviews for free. Otherwise, they will have the option to buy an annual silver subscription for $24.99 or a gold subscription of $99.99, which will include options such as access to an emergency service hotline and fair price guarantees, reports USA Today.
Angie鈥檚 List hopes to turn the millions of people who come to its site in search of responsible local businesses 鈥� and then leave as soon as they see they have to buy a subscription 鈥� into paying customers, as many other online service sites try to do.
鈥淭he reviews paywall served the company well for the last 20 years, but聽 鈥� millennials are not going to pay for reviews,鈥� said Mr. Durchslag to USA Today.
This is part of the reason that the Indianapolis-based company has had only one profitable year 鈥� 2015 鈥� since it went public in 2011. The rate of new memberships has been sluggish until recently, in part, thanks to growing competition from services such as HomeAdvisor, Thumbtack, Porch, and Houzz.
Angie鈥檚 List says it has around 3.3 million members, and millions of visitors a month, though many don鈥檛 use the site because they don鈥檛 want to pay the membership fee to do so.
鈥淲e get over 100 million visitors each month, but because of the reviews paywall,鈥� Durchslag told TechCrunch. 鈥淲e expect to see traffic explode with the change,鈥� he said.
Improving the website, refreshing its brand through a new marketing campaign to highlight the company鈥檚 service quality guarantee, plus introducing premium offerings for Angie鈥檚 users to buy, will double the company鈥檚 revenue, Durchslag promises, from between $345 million and $355 million this year, to $750 million by 2020.
鈥淧ut simply, ,鈥� Durchslag, the former head of Best Buy鈥檚 online business, said in a recent quarterly earnings call.
In November, IAC/InterActiveCorp., a company that owns About.com, Ask.com, and Dictionary.com, offered to buy Angie鈥檚 List for $512 million. But because it undervalued the company, reported The Wall Street Journal. Angie鈥檚 List said that it wants to strengthen its business before considering potential mergers.