Paywall site Ongo, backed by NYT and WaPo, folds after 16 months

Paywall sites are having a bad month. Google (s GOOG) shuttered One Pass at the end of April. Now paywall and news aggregation site Ongo, which launched in January 2011 with $12 million in funding from the New York Times (s NYT), Washington Post (s WPO) and Gannett (s GPI), is closing, Nieman Journalism Lab reports.

Ongo was founded by former eBay (s EBAY) and PayPal exec Alex Kazim and aimed to aggregate news while charging for some content from big newspapers. NYTco’s Martin Nisenholtz described Ongo as a “Hulu of news.” But as Nieman explains, the pricing scheme was confusing:

basic Ongo subscription gave you access to content from The Washington Post and USA Today — but only “Top Stories” from Reuters, “Selected Content” from the Financial Times, and “Picks” from The New York Times. If you wanted to add more publications beyond the core offerings, those came at significantly varied prices — 99 cents a month for Slate, Salon, or Engadget; $3.99 for the Christian Science Monitor; $9.99 for the Chicago Tribune or The Miami Herald; either 99 cents or $14.99 a month for The Worcester Telegram & Gazette, depending on how much of it you wanted; and so on.

Some of the content that Ongo charged for was free on the publisher site. And to further complicate things, the New York Times launched its own paywall in March 2011, just a couple months after Ongo opened for business. At launch, Ongo charged $6.99 per month for a subscription; that cost was later lowered to $1.99, but it wasn’t enough to save the site.

Ongo’s closure leaves RR Donnelley’s Press+ as the largest standing paywall solution, with around 350 publications using the service. Press+ cofounder Gordon Crovitz recently proclaimed to the Wrap, “Paywalls won’t save news publishing by themselves, but…it’s the single biggest new source of revenue for papers.” But Ongo’s failure suggests paywall implementation may be best left to individual papers — and that readers don’t want to pay for an aggregation site.