For nearly two decades, newspaper companies have struggled to profitably reach readers online. As more news consumers turn to mobile media, companies like the New York Times, Washington Post and Gannett are hoping to establish commercial models that expand their user base while not giving anything away for free.
Enter Ongo, a mobile app developer backed by the biggest names in news. The company launched an advertising-free iPad app earlier that curates articles from leading newspapers and magazines. The app is subscription-based with a $6.99 monthly fee, and subscribers can also filter and personalize the news they receive and add additional publications for 99 cents a pop.
Last September, Ongo raised $12 million from the New York Times, Washington Post and Gannett. In this edition of Meet the Makers, Ongo CEO Alex Kazim discusses how he leverages this immense competitive advantage in the increasingly crowded news aggregation space, what other information-oriented iPad apps he admires, and why the company’s upcoming iPhone app will offer a completely different user experience than the tablet version.
Appolicious: While there are several news aggregators that exist as iPad applications, Ongo is the only to my knowledge financially backed by the New York Times, Washington Post, and Gannett. Talk about the advantages these financial and strategic relationships bring to your company.
Alex Kazim: The biggest benefit is for the users. First, these are arguably the most trusted brands in the news space, and in a world of seemingly infinite news, users know they can count on these publishers to let them cut through the noise by reporting on the most vital news of the day. These publications also give users some really interesting stories on top of that. These papers win Pulitzers for a reason. Second, the breadth and depth of content is terrific. From a category standpoint you'd be hard pressed to find better World News than the NY Times, better Politics coverage than the Washington Post, or better "everyday" news from USA Today. And geographically, these publishers cover over 80 metro areas. It's also a benefit for the company. Not just the financial investment, but the deep understanding they have of the news industry and their relationships with other publishers has been a great help to us.
APPO: How much focus is on having users filter articles according to their own chosen topics as oppose to what is curated on their behalf by your editorial team?
AK: We give our subscribers the choice between professionally and personally curated news content. Our team of professional editors spotlight the most timely, important, and interesting stories from across our publications, saving our subscribers time and keeping them well informed. These range from the latest headlines to engaging feature stories to “water cooler” stories destined to become the most talked about news. We also think it's important for users to be able to set up their own filters for personalization and they can do so through one of our value added features, Ongo Topics. This lets them select key words or specific content from across their publications that match those areas of interest that are most personally important to them. Because the content is aggregated on Ongo, users can easily choose to see either news our editors have selected, or the news they have identified they want to read.
APPO: What other iPad apps in the news delivery space do you admire, and which do you consider to be your primary competitors?
AK: We haven't seen any true competitors to Ongo. Our vision for Ongo is to be the primary destination for online news — that is, it's where you go every day to find out what news is happening. The best news from the best sources, full articles, not merely aggregated links, curated by professionals, no customization required. Most of the apps we've seen on the iPad are secondary destinations: it's what else might I have missed. But we do think there's been some cool innovation in the space. I like how Flipboard pioneered the aggregation of my social network as a news source. And I like Zite's on- boarding process for personalizing my news.
APPO: While Ongo is free to download, after a one day trial the service requires a monthly $6.99 subscription (with a la carte options for additional publications at 99 cents a pop). How did you come to that pricing structure, and are consumers adapting in ways you predicted?
AK: The Ongo iPad app is free to users who subscribe to the standard subscription package. We also offer a free one week subscription for users to enjoy the Ongo experience prior to signing up. As for pricing, we wanted to go with a subscription model overall for a number of reasons. First, it allowed us to remove advertising, which we saw as a detriment to the user experience. And second, it's a simple model for the user to understand -- they already have an analogue with their cable bill. For the price, we needed to balance paying the publishers for their content with keeping the hurdle to adoption as low as possible. That said, you'll probably see the subscription bundle and the pricing move around as we try to find the right sweet spot.
APPO: Are there plans to create a smaller screen version of the application for iPhone and iPod touch owners?
AK: We're definitely evaluating a native iPhone app. But it's more than just a smaller screen version of our iPad app. We've done market research that shows that iPad users check their news once or twice a day while iPhone users check their news continuously, so they're looking for a different kind of news. And an experience designed for Wi-Fi isn't going to be so hot on 3G, so we're looking at something that will look very different than our iPad app. As for our iPad app, it offers true mobility with offline caching enabling news reading on the go, even without an Internet connection. At present we do have a mobile site that users can access: http://m.ongo.com which offers an optimized interface for smart phones.
APPO: What about expanding to Android tablets and smartphones? Are there enough Android tablet owners today to justify that investment? If not, what's the threshold?
AK: We're also evaluating those devices but as a startup we need to weigh the development and ongoing maintenance costs with the size of the market.
APPO: After the initial publicity pop after the release, what in your opinion are the best ways to drive iOS application downloads over time?
AK: It's all about building a great app. Word of mouth is always the best plan for startups, so if you have something that's really cool, other people will hear about it. In our experience, we know that this is critical to building our consumer base.
APPO: Name the three biggest things central to the mobile media space that keep you up at night. Why?
AK: There are two that I believe are central. First is the proliferation of platforms. You don’t want to just port apps to every platform: you want each to be optimized for the user behavior. So whether it’s screen size, network speeds, presence of a GPS: you have to take all of these into account. But users also want to have functional parity between devices, which means the vast majority of your features have to go into each app. So you run into a multiplicative cost issue. Second, the relative youth of the platforms keeps us from doing things. For example, our business model requires monthly variable billing system since users can add and remove publications at any time, but the subscription service in the iOS app store is designed for billing the user the same amount every month. So we can’t use it without creating a horrible user experience.