Angie’s List, a contractor and service review and ratings service, announced that it will abandon its membership model and move to a tiered subscription plan this summer, says USA Today. Angie’s List (NASDAQ: ANGI) made the announcement on March 3, 2016 as it unveiled its new Profitable Growth Plan at Investor Day. According to the announcement, the company will remove the ratings and reviews paywall to allow consumers to access the service for free.

In addition, Angie’s List will introduce freemium and premium tiered subscription offerings with “additional high value services.” Angie’s List’s traditional search, ratings and reviews will be among the free services. The premium services will include emergency services hotlines and services that guarantee a pre-qualified handyman to respond to a subscriber’s home within hours of their call for assistance.

The announcement said that early testing shows that the new model will significantly increase consumer engagement and the value to service providers. They expect it to also yield more consumer registrations, profile views, reviews and originations. Scott Durchslag, president and CEO of Angie’s list explained the growth plan:

“The new plan announced today transforms our legacy business model to bring in a new era of growth and profitability at Angie’s List. Angie’s List is the premier brand in the $400 billion home services market. 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.

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. Given the unique strengths of Angie’s List, the tremendous growth in the home services market, and the new strategies we are announcing today, we have many reasons to be excited about the long-term value creation opportunity for Angie’s List.”

The company said it would begin to implement the business model changes during the second quarter of 2016, with a full roll out expected in the third quarter. In an interview with USA Today, Durchslag said he expects “to see traffic explode” as a result of the changes. However, it will take time to make up for the 20% revenue lost from Angie’s List memberships.

The first phase of the profitable growth plan, which includes the revamped business model, focuses on strengthening and repositioning the core business in 2016. During 2017 and 2018, Angie’s List will focus on leveraging its home services platform, and in 2019 and 2020, the company will expand its consumer and service provider bases and develop partnerships to provide additional value-added services.

Insider Take:

The Angie’s List announcement comes 10 days after the company reported its fourth quarter and full year 2015 results. For the first time in the company’s 20-year history, the company finished in the black, reporting net income of $10.2 million for the year, $14.2 million of which was earned in the fourth quarter. It also reported total paid memberships for the quarter of 3.3 million, an 8% increase year-over-year. This is impressive considering that, for the year, Angie’s List lost 17% of its gross paid memberships.

It is hard to believe that Angie’s List has survived so long operating in the red, but it looks like the company may finally be turning a corner. This is likely due to the wisdom of its new president and CEO who was hired in September 2015. In a short time, Durchslag, who was previously with Best Buy and Skype Global, has seen the company make a $22 million swing from 2014 results.

“Since I joined Angie’s List just six months ago, we’ve launched change across the company to strengthen customer loyalty, improve operating efficiency, and enhance our product, technology and marketing capabilities. New products, including LeadFeed, Angie’s Fair Price Guarantee and Angie’s Service Quality Guarantee, as well as the initial roll out of our new Angie’s List 4.0 technology platform are just a few examples. We are executing smarter, faster and with more discipline based on data driven decisions than ever before,” said Durchslag when the 2015 financials were released.

It is interesting to see that Angie’s List is finally profitable and that they are making substantive changes to their revenue model, so while Durchslag made some changes during his brief tenure, and seen some initial success, there were already fundamental issues with the core model that finally be addressed.

It looks like the company might finally be doing that. We’re glad to see that Angie’s List is not afraid to change things up, test their ideas and try to stay relevant in a changing environment, but it will take more than finishing in the black for one financial period before we are convinced they are on the right path.