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Ongo-ing struggle: subscription aggregation service Ongo closing down

Ongo-ing struggle: subscription aggregation service Ongo closing down

After launching less than a year and a half ago, paid digital content service Ongo is shutting down. The company, which aggregates news from around 40 publishers, presents it in a user-friendly, add-free format, and charges readers a subscription for it, will shut shop by the end of this month, reported Nieman Lab yesterday.

Ongo’s closure represents a bad bet made by some of the traditional news industry’s biggest players: The New York Times, Gannett and The Washington Post each contributed $4m to the company when it was launched.

What went wrong? One problem, as Nieman Lab points out, is that Ongo’s pricing system was confusing. Readers could pay a flat subscription rate for full access to the AP, USA Today, The Washington Post and ProPublica, and for a selection of stories from The New York Times, Reuters and The Financial Times. But they could also get access to a range of additional publications, which were priced individually between 99 cents and $14.99 extra per month. Lots of this paid content – for example from Slate or The Guardian – was available elsewhere for free. Also, the service that Ongo offered was also replicated by free apps like Flipboard and Pulse. Nieman Lab notes that Ongo dropped its prices and made special offers available after its launch, but these pricing experiments weren’t enough to save the company.

Charging steep and complex fees for content that is available elsewhere for free as part of a service that also has free competitors, was never going to be easy. Why did Ongo try it at all?

As Nieman Lab points out, Ongo’s business was not focused on what users were reading, but on how they were reading it. Ongo’s founder Alex Kazim told paidContent last year, “we realized that users won’t pay for content — however, they will pay for a better user experience and that’s what we’re really offering.”

Unlike Flipboard, which shows display ads and features “cover stories” that are selected based on the behaviour of its users and their friends, Ongo is ad-free, and top stories are picked out by news professionals. Kazim told The New York Times after the company’s launch, “I just don’t think my friends are as good as professional editors in finding stories for me to read”. And Ongo’s CEO Dan Harmann told Nieman Lab “I hate advertising in my news”. But it looks like readers didn’t feel the same way, about advertising or about social. Ongo's competitor Flipboard topped 4.5m iPad downloads, five months after launching display ads and has just unofficially launched for Android, where TechCrunch expects it to have great success. And Harmann tells Nieman Lab that one this he is learned is that “in order to be successful at all in this business, is that social is absolutely critical.”

Harmann also implied that Ongo had also suffered from not wanting to give Apple a 30% cut by allowing in-app purchasing on its iPad app. “Apple’s take, from a billing perspective, made it very difficult to succeed in a paid-product space from what we think the pricing should be,” Harmann told NiemanLab.

PaidContent points out that the closure of Ongo and the recent demise of Google’s One Pass now leaves RR Donnelley’s Press+ as the biggest player in paywall solutions.

Sources: Nieman Lab, The New York Times, paidContent (1) (2) (3) The Next Web, Mashable, TechCrunch


Hannah Vinter


2012-05-09 14:11

Shaping the Future of the News Publishing

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