New startup Ongo is trying to tackle a big problem — getting people to pay for news online — using a combination of new and old techniques.
Ongo is going to aggregate the content from a number of newspapers, strip out the ads, improve the interface and charge a monthly fee.
Yes, Ongo is going to CHARGE for news that’s generally free on the web. Crazy, right? We think so, but Ongo CEO Alex Kazim doesn’t seem rattled.
Kazim figures there are millions of news readers online. If he can capture just a fraction of them, he could have a multi-million business on his hands.
Ongo’s base subscription fee is $7 per month. With that you get a selection of top New York Times stories, a selection of top FT stories, as well as stories from the Washington Post, USA Today, and the AP.
If you want more news from other sites like Slate, the Boston Globe, or number of regional newspapers it will cost an extra $0.99 on average.
Think of Ongo like cable. You pay a flat fee for basic cable. For a little extra, you get more channels. Also, just like cable initially delivered sharper signal for TV, Ongo delivers sharper news since it strips out the ads and delivers a slightly better interface.
Kazim estimates Ongo could generate $100 per user. If it gets 1 million users, then it’s a $100 million business. If it gets 100,000 users, it’s a $10 million business, which isn’t bad for a news aggregator.
Of course, getting even 100,000 users is a pretty tall order, since few people are willing to pay for subscriptions to newspapers on the web.
This isn’t the first big project Kazim has worked on. He previously worked on Skype and PayPal at eBay. Prior to that he was at Apple in nineties.
Ongo investors include some of its partners. The USA Today, New York Times, and Gannet each invested $4 million into the company.
Ongo will have mobile apps, as well as a traditional website. It launches today.
Here’s sneak peak at the Ongo interface: