Millennials Prompt Angie’s List To Tear Down Paywalls, Go Free: CEO
Online reviews site Angie’s List ( ANGI ) said Thursday that it will drop its current membership model this year and replace it with free access to its business ratings and reviews as part of a tiered subscription plan. The company promised changes last fall after it turned down a $512 million acquisition offer from IAC/InterActiveCorp ( IAC ) subsidiary HomeAdvisor. Angie’s List is trying to grow its presence in the $400 billion home services market. Indianapolis-based Angie’s List has struggled with competition from rivals including Yelp ( YELP ), search engines such as Alphabet ’s ( GOOGL ) Google and others. The company announced changes and 2016 year guidance at its annual analyst meeting Thursday in New York. Angie’s List stock was up nearly 4% in afternoon trading on the stock market today , near 9. Angie’s List stock is up 28% in the past 12 months but down nearly 70% from its all-time high of 28.32, brushed in July 2013. “The new plan announced today transforms our legacy business model to bring in a new era of growth and profitability,” Angie’s List CEO Scott Durchslag said in a statement. “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.” He said, “We expect to reignite revenue growth and drive significant increases in profitability over time with minimal disruption to the business.” The new tiers — to launch this summer — include a free option where users can research ratings of local businesses, read reviews and see display advertising. Premium silver ($24.99) and gold ($99.99) annual subscriptions include options such as an emergency service hotline and fair price guarantees. “The reviews paywall served the company well for the last 20 years, but looking ahead to the next 20 years — millennials are not going to pay for reviews,” Durchslag told USA TODAY on Thursday. Angie’s List guided 2016 revenue at $345 million to $355 million, up 0.25%-3.00% year over year. That’s short of the $361.5 million analysts polled by Thomson Reuters had modeled. “There will be some trade-off in terms of consumers that will want to just get things for free as opposed to paying a subscription,” says Durchslag. “There will be others that want the new set of offers we’re launching.”