Angie’s List Case

NAME                                                                DATE

Angie’s List Case

Angie’s List has a three tier pricing service which should be eliminated immediately. Angie’s List should offer a free service because when we look at how the internet has evolved, people don’t like to pay for services on the Internet. They especially don’t like to pay for content that’s generated by everyday—and potentially clueless and ill-informed—users like themselves. Just think about how you’d react if you had to actually pay out of pocket to access content created by random people at YouTube or Facebook. Or, more appropriately in this case, how would you feel about paying to read and submit your own user reviews at sites like Yelp, TripAdvisor, and Amazon? When the current business model is put into perspective, most people would say “no” to the idea of paying money for such content. Yet, this has essentially been the business plan of Angie’s List  the members-only service that charges subscription fees in exchange for access to reviews made by consumers of plumbers, contractors, and other local businesses in markets around the country.

Speaking of these competitors (Yelp, HomeAdvisor etc.) it is obvious that they all have similar business models which are in sharp contrast to Angie’s List. By focusing on generating revenue through advertisements, they have provided consumers with a similar product for free. Given Angie’s List held a strong competitive advantage in the past which was providing reliable services to it’s consumers, this has eroded over the years. Consumers do not see the value in their competitive advantage, rather a new generation of millennials see a greater value in the freedom of information. If one looks at millennials and their view of the internet, they do not pay for any services or software. Given pirated movies, music etc. are being downloaded at an all-time high, a new view of not paying for services has developed amongst these consumers, Angie’s List has to change it’s business model to attract new consumers and grow.

Angie’s List was created in 1995—almost a decade before Yelp—and the subscription model it uses predates Internet services operating on a free or “freemium” basis by many years. Unsurprisingly, the company has struggled in recent years, even as it’s expanded, as upstart competitors have promised to deliver to consumers all of the benefits of Angie’s List reviews with none of the costs.

Therefore it has become painfully obvious that Angie’s List has to change its business model. It is recommended that Angie’s List removing the ratings and reviews paywall and enable consumers to access this service for free.  What this means is that traditionally only paying subscribers could check out Angie’s List reviews or submit their own, it is recommended that these new changes allow anyone to browse them which is similar to competitors such as Yelp. It is essential to not fully remove this payment model though given Angie’s List has been preaching about the benefits of a paid membership model. Therefore they should offer other “premium” services that users still must pay for.  These premium services should be of a higher quality and provide an ease of access to consumers. For example, if a consumer needs a reliable plumber at 2 AM on a Sunday, Angie’s List will enable premium users to find a list of pre-qualified plumbers who can make a 24 hour call. This will enable consumers to access the service they desire with less qualifying work (quotes etc.)