Angie's List announced today it is giving free access to all of its reviews and is creating two new paid membership tiers. The news fulfills plans first revealed March 3 and follows ownership changes that have produced significant changes in how the service works.
The company's new Green service level provides free access to company information and the ratings and reviews that Angie's List members have given those firms. The Silver tier, which costs $24.99 annually, includes Angie's Fair Price and Service Quality guarantees plus "exclusive discounts, chat, and email customer support," the company said. The Gold service, at $99.99 per year, adds a complaint resolution process and customer support by phone.
"Benefits planned to be added in the coming quarters include tools for project pricing, scheduling, and financing (through partnerships), handyman chat line, a home emergency service line, instant hiring, as well as eCommerce savings," the Indianapolis-based company said in a news release.
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, and while it recorded a $10.2 million net profit in 2015, during the first quarter it swung to a $4 million net loss in the first quarter from a $4.4 million net profit in the year-earlier period, in part because revenues barely changed and the company reserved $3.5 million as a contingent liability for unnamed pending litigation.
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.
In prepared remarks for an announcement event today in New York, Angie's List President and CEO Scott Durchslag said tests in recent months of the new concept has been enthusiastically embraced. "Since dropping the reviews paywall, a number of key member metrics are re-accelerating," he said. "In the most recent week, new member sign-ups increased nearly fourfold compared to a year ago and, among those members, unique visits more than doubled. In that same period, unique members searching have more than doubled and the number of service provider profile views from those members more than doubled. Although these are early days, the data is very encouraging. While growth in new free members will not impact near-term revenue, it is a critical milestone in executing our Profitable Growth Plan."
That growth plan was put in place a few days after the March 1 announcement that the private investment firm TCS Capital had bought a 12.75% stake in the company and got three seats on the company's board of directors.
