Angie's List announced today it will begin letting consumers access its ratings and reviews for free starting next quarter. This announcement comes just two days after Angie's List revealed that a private investor bought 12.75% of the company's shares. The investor also received three seats on Angie's List's board of directors.
"By removing the paywall for ratings and reviews, our new Profitable Growth Plan removes the barrier that has limited our growth and enables Angie's List to engage with more consumers and more service providers than ever before," Angie's List president and CEO Scott Durchslag said in a statement. "Through this three-phased plan, we expect to reignite revenue growth and drive significant increases in profitability over time with minimal disruption to the business."
Aside from taking down the paywall, the Indianapolis-based firm also says it will introduce "new freemium and premium tiered offerings with additional high-value services." The company said those tiered premium services will include " emergency service hotlines and services that guarantee a pre-qualified handyman in your home within hours of a call."
(See related story: "Repair Wars: The Expanding Role of Online Home Services.")
Full rollout is expected during this year's third quarter.
While Angie's List has grown to 3.3 million members as of Dec. 31, that represents just 13% penetration in the 243 markets the company serve, it estimates. In addition, those membership fees accounted for only 20% of the company's $344.1 million in revenue last year. Advertising and related revenues from the company's 54,402 service providers, including remodelers, brought in the other 80%.
The company had incurred losses for several years, but it swung to a $10.2 million net profit in 2015. For this year, Angie's List expects revenues to total $345 million to $355 million. By 2020, however, it's planning on revenue totaling $750 million. At the same time, the company expects the share of revenue from membership will decline; that's not necessarily bad, though, as the cost of marketing to get new memberships also will decline.
The robust revenue growth forecast may be related to the arrival of the private investment firm TCS Capital as a significant investor and occupant of three out of Angie's List's 11 board seats.
At the same time as the company has been adjusting its business model, Angie's List also is increasing its strategic relations with various manufacturers. For instance, it has announced a James Hardie Contractor Alliance program. An Angie's List spokesperson told Remodeling that the benefits include "exclusive e-commerce offers" in which contractors can align with the James Hardie brand and sell directly to Angie's List members when the members search for siding. Highly rated James Hardie contractors also will get increased exposure when the siding category is searched, the Angie's List spokesperson said. And companies in the James Hardie program will be eligible for advertising discounts on Angie's List if they buy certain James Hardie products at volumes above certain thresholds. (See video for more.)