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Angie's List unleashes 'freemium' model in all markets

July 13, 2016

Angie's List Inc. has officially opened its doors to free users nationwide, marking the first time in its 21-year history that the Indianapolis-based company has allowed access to its home-service reviews without requiring membership fees.

Angie's List announced Wednesday morning that it has introduced a free member tier in all markets, and that an advertising blitz will soon follow. The move is intended to accelerate user traffic and, subsequently, service provider spending with the company.

Angie's List will still offer consumer memberships for premium features, but its basic offerings will be free.

"Ninety percent of millennials were saying as a matter of principle they would never, ever pay just to read a review," CEO Scott Durchslag said in an interview Tuesday. "When you have that kind of clarity, I mean you can try and fight gravity if you want to, but I'm not going to do that. I'm going to embrace it."

The company announced its so-called freemium model in March. It includes "Green," "Silver," and "Gold" tiers, each with progressively more features, including fair-price guarantees and complaint-resolution support.

Silver membership costs $24.99 a year and Gold costs $99.99 a year.

Angie's List removed its paywall in certain markets starting last month, and did no advertising around it, Durchslag said. The results have been impressive, he said, with free and paid member signups growing 300 percent versus the same period last year, and service provider profile views more than doubling.

"These are very early days and the beta is for a relatively limited period of time," Durschlag said, "but these are very encouraging numbers."

The company's rationale is to boost the number of consumers on the site in order to attract more spending by new and existing service providers. Those service providers buy ads on Angie's List and give it a cut of pre-priced service packages those companies sell, such as $99 gutter cleanings.

While Angie's List turned its first annual profit in 2015, user growth and revenue growth have been slowing over the past several quarters.

Angie's List shares closed Tuesday at $6.62 each, up 3.6 percent. The stock price has fallen nearly 30 percent since the beginning of the year.

 

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