The New Medium Business Model
Breaking Down The New Information & A Suggestion
Recently I was lucky enough to be asked to be a writer in the Medium Partner Program, but before Ev Williams “pivot” was announced I was already fascinated with Medium and the basic premise of a platform that, in a sense, replaces the blog and micro-blog with a multi-tiered ‘Massive Open Online Magazine’ (MOOM?) that anyone can publish in or read from.
In other words, Medium seems to function like a “build your own silo” style magazine featuring millions of articles daily that people filter by chosen tier (paid or free), by personal interest, or by authors. More important, curation occurs more organically than on say Facebook where pay literally dominates feed play, people can see the articles of people they follow before they see more popular or curated articles.
Cale Guthrie Weissman wrote an excellent article in Fast Company today detailing the changes in the Medium Business model and explaining the Medium Partner Program payment scheme in detail.
As near as I can tell, the business model is based around at least ONE of the following:
- A transactional relationship between people seeking content without pop-ups or ads and the value of a popular hub to content producers who can then grow an audience and leave bread crumbs back to their personal web properties. I am not entirely sure how this play pays out for Medium but there has to be some kind of big data play (or some kind of data play).
- Large publishers can find a supplemental audience while the presence of these publications creates another reason for Medium members to stay on platform (I am not entirely sure what business relationship happens between these large publishers and Medium but one would assume there has to be some kind of financial relationship?).
- Medium now offers curated exclusive content from Medium’s most popular writers for subscribers who pay for the privilege of access to unique content produced specifically for subscribers. Medium sets a budget for itself and after it pays its bills the rest goes to the paid writing partners.
According to Weissman’s article, Mr. Williams says subscription numbers are growing so for this part of the model to work Medium needs to have happy writers who continue to participate in the program regularly.
When the program was first created it was reported that the payouts would be entirely controlled by claps which caused a bit of a firestorm (because claps are a bit hard to predict or write for) but luckily the payment algorithm seems to have become more sophisticated including some or all of the following elements and more:
- Read Time
- Social Shares
They are keeping the sauce secret to prevent the system from being gamed which is understandable but it was smart to diversify the scheme in order in order to ensure that popular content can be gauged in multiple more accurate ways beyond just claps.
What excites me most about writing on the Medium platform is that it allows me to potentially get paid without having to rely on embedding the pop-ups and bloatware that annoy me so much when I am reading content. I am also hopeful that all of the elements of this business plan will come together because it is an easy platform to write on, the Medium folks that I have interacted with are really nice, and I love that Mr. Williams has stuck to his principles regardless of what challenges he has faced.
If I had one additional suggestion it would be incentivizing subscribers in addition to incentivizing the content producers. If it is possible to put a monetary value on social shares for producers it should be possible to discount subscriptions based on shares. If it is possible to place a value on subscriptions it should be possible to reward subscribers for encouraging other potential subscribers to join as well. The more happy subscribers the more happy writers and the stronger the business model (and all without advertising revenue or pop ups).
When I was a kid, we all hoped that television would become a great educational and informational wonderland and arguably advertising ruined everything.
When I was a young man, everyone was hoping video wouldn’t kill the radio star and arguably advertising ruined everything.
When I was a bit older we all hoped that the internet would be more of a educational and informational savior than a cesspool and arguably advertising ruined everything (now you can’t even read an article online without spending the first ten minutes closing the ads).
Medium gives me a little hope that these changes could finally be the basis of an important victory for people power.
Let’s hope Medium 3.0 is a massive success for all of us!