Geoffrey Graybeal’s Analysis of Ongo:
As one who has devoted a significant amount of time researching new business models and news platforms, I was pleased to see the debut of Ongo. According to this PaidContent.Org post, Ongo is a social news site that combines aggregation and paywalls. Ongo has significant backing from some major newspaper companies, including the New York Times Co, Washington Post and Gannett. This is the first effort I’m aware of that harnesses socialization, but also adds a payment component.
This is an excellent start, but in my opinion this model/product still misses the mark in many ways. First, this is a destination site. The product appears to be an aggregator of social news much like Flipboard. Aggregation in many ways is an old notion because it is predicated on the idea that people are seeking the news, rather than news finding the reader as often occurs on the Social Web environment.
The second problem with Ongo is subscription. Seeking to charge for online content is good. A subscription model, however, is just a tired retread of a print business model. Social news consumption comes from multiple sources. The ability to pay for a single piece of content is needed. Micropayments were in high demand just two years ago, but there seems to be a sudden hesistancy on newspaper publishers’ part to experiment with micropayments. Newspapers have not given micropayments a fair chance in earnest despite the widespread success of micropayments for other types of media content, such as music files and mobile ringtones.
I firmly believe that micropayments can succeed for newspapers. The Graybeal & Hayes’ “Modified News Micropayment Model” outlines four drivers- socialization, microearning, hyperlocal focus and a centralized banking system- that would allow micropayments to work for newspapers.
I wonder what incentive would-be users of Ongo have to subscribe. In the Graybeal & Hayes model we suggest using foreign currencies or points rather than real dollars and cents because it helps to remove the anxiety involved in the consumer purchasing decision. We also suggest that the ability to microearn is a vital factor. None of that is in the Ongo model that I’m aware of. I’m basing my evaluation on the press materials because I do not have an Ongo account yet.
In some ways, placing content on a new platform may actually hurt the major newspaper companies investing in it. In a recent study I did with Amy Sindik* published in the current issue of the Journal of Media Business Studies we found that brand loyalty increases user likelihood to adopt micropayments for online newspapers. Brands matter. Brand names like The New York Times or Washington Post carry far more weight than Ongo. The Times fared quite nicely, in fact. Survey participants indicated a greater willingness to pay for Times content online than any other newspaper.
Ongo has tremendous potential, especially for establishing a mindset for paid social news. I, for one, will be watching closely its development throughout the year.
*Sindik, A., & Graybeal, G. (2011). Newspaper micropayments and Millennial Generation acceptance: A brand loyalty perspective. Journal of Media Business Studies, 8(1), 10-20
*An article about the Graybeal & Hayes “Modified News Micropayment Model” is currently in press in the International Journal on Media Management.