January 4, 2019 marked the two-year anniversary for when everyone briefly thought that Twitter co-founder and Medium CEO Ev Williams had lost his marbles. Early that morning in 2017, a third of Medium’s staff had been let go. A few hours later, Williams posted an article to Medium titled “Renewing Medium’s focus.”
Up until this point, the running assumption was that Medium would be an advertising-supported business, and it had staffed itself accordingly. Its plan was to sell high-quality native ads that would be recommended alongside its content. The company had brought on a few initial ad partners and also lured several mid-tier publishers onto its platform with promises of guaranteed income streams and better distribution.
But this strategy, Williams’s post-layoff blog post stated, was a mistake. “While we could continue on our current path — and there is a business case for doing so — we decided that we risk failing on our larger, original mission if we don’t make some proactive changes while we have the momentum and resources to do so.”
To continue down the advertising route, Williams felt, would undermine Medium’s mission to publish the world’s best text-based content. The incentives wrought by an advertising-based business model had generated many of the problems in digital media that Williams sought out to solve: clickbait, fake news, and sensationalism
What was missing from Williams’s article? An alternative business model. Here was a company that had taken in tens of millions dollars from venture capitalists, most of whom were expecting large returns, and it was abandoning a business model that had thus far powered every platform of its kind. And those publishers that had bet their futures on Medium? They were just as surprised as we were by Williams’s announcement, and over the next year they would steadily abandon the platform.
But over the next few months, we began to see what Williams had in mind when he called for a “better system — one that serves people.” In early 2017, Medium launched a $5-a-month-$50-a-year metered paywall. What would a member get for this sum? A few things.
Medium began syndicating content from already-established publications like The New York Times, New York magazine, and The Financial Times. Rather than running every single article from these outlets, Medium’s staff picks and chooses the stories that are most likely to resonate with the platform’s audience. It’s not always clear what the value add is here; many of the syndicated articles can be found elsewhere for free, though I do enjoy the occasional Financial Times article, given that most of its content exists behind the newspaper’s hard paywall.
Medium also works with professional freelance writers and journalists in a typical article acquisition process, the kind that you’ll find at just about any magazine. To lead in this endeavor, the company hired Siobhan O’Connor, a former executive editor at Time. She’s been steadily hiring out a slate of editors across a number of beats, and they’ve been armed with a sizable freelancer budget that they use to commission longform articles, regular columns, and even a full-length book.
Finally, we have the Medium community itself. Whenever one goes to publish an article on Medium, you’re given the option of placing your piece behind the Medium paywall. Those that do are paid based on a Spotify-like system in which the amount you’re given depends on the amount of engagement your article has received. “Engagement” is a fuzzy term that Medium doesn’t completely define — lest users try to game the system — but it certainly involves the number “claps” an article receives and the number of users who finish the article to completion.
To create real value for subscribers and also scale out the company’s content offerings, Medium has invested significant resources into this last bucket. Because most user-generated content is terrible, the company needs to find an effective way to locate the highest quality user content and place it in front of paying subscribers. To help in this mission, Medium hired “elevators,” staff whose sole job is to comb through the thousands of articles published to the platform each day and surface the diamonds in the rough. Once an elevator has located an article that has promise, they’ll “reach out to the writer and work with them on improving their piece,” often helping them to tweak things like the headline and featured image. They’ll then plug the piece into topic “channels,” which blast the article to the Medium homepage and daily newsletters. As someone who’s had my work promoted in channels, I can testify that it does significantly boost an article’s distribution.
So we’re about to reach the two-year anniversary of the membership platform’s launch. How is it doing? And more important, is it a viable platform for those trying to make a living on the written word?
Medium is a private company and we have limited access to its financials, but its staff has dropped several hints about the state of its membership. In a December post, they claimed to have paid out $5 million to writers in 2018. Williams has indicated that, at the moment, 100 percent of member revenue is being funneled back to writers, so performing some back-of-the-envelope math indicates that the company had somewhere north of 100,000 paying subscribers by the end of the year.
In stats it posts every month, Medium offers details about its writer payouts. In January, its highest payout for a single story was $4,290. Any freelance writer would consider this a good rate for a feature-length magazine article. The highest-paid author took home $8,390 for the month, meaning that it’s theoretically possible for a single writer to generate $100,000 a year on the platform. A little over 8 percent of writers who placed their articles behind the paywall generated over $100 in January.
In a 2017 interview, Williams revealed his goal of reaching 10 million paying members within five years. He also indicated that Medium would eventually take between a 20 and 30 percent cut of membership money, meaning up to 80 percent would go to writers. Ten million members would generate $500 million per year, which would mean that Medium would be paying out around $375 million to writers. The average journalist makes about $46,000 per year, so that means Medium, if it hit Williams’s goal, would be paying the equivalent of 8,000 journalists’ salaries.
The New York Times, ones of the largest journalistic institutions, has a newsroom of around 1,600, so that means Medium would be one of the world’s largest employers of writers. Of course, it’s not like all writers for Medium would make $46,000 per year. Some will make much more than that, some much less. Quite a few could make a full-time living on the site while others would use it to supplement their income.
Sounds like a rosy outcome for the written word, yes? Of course, there are caveats. For instance, what happens when a writer is making a happy living on Medium and the product team suddenly tweaks the algorithm, decimating that writer’s distribution overnight? We’ve seen this happen on other platforms, most notably YouTube, which has sent its creators into a panic on multiple occasions after it’s repeatedly changed its advertising platform.
Also, I’m concerned about rules that hinder writers from building up their audiences outside the Medium platform. Its guidelines for medium partners bar pieces from having “calls to action.” This means that you can’t encourage your readers to subscribe to your newsletter or follow you on Twitter. Given the need for any writer or publisher to diversify their traffic sources, I worry that this means Medium writers will become too dependent on the platform for generating an audience, thus leaving their incomes up to the whims of Medium’s curators.
Lastly, it’s far from clear that Medium will reach its subscriber goal. There’s a wide gulf between 100,000 and 10 million digital subscribers, and as far as I know, no text-based, English language publication has come even close to reaching this threshold (The New York Times, which has around 4 million subscribers, has set a goal of reaching 10 million by 2025, although that number includes print subscribers). Are there 10 million people who will pay to read essays between 600 and 2,000 words? Its current system doesn’t seem well primed for publishing, say, investigative journalism. After all, how could I spend six months chasing down a labyrinthine story when I ultimately don’t know how much engagement and money it’ll attract? Breaking news seems similarly ill-suited for the platform.
The platform certainly has the scale to make its 10 million subscriber goal seem plausible. Medium attracts 90 million unique visitors a month and its users generate 20,000 articles per day. We’ve seen evidence that it’s leveraging the data generated from this massive user base to make inferences about what converts readers into subscribers. For instance, it recently did away with its paywall for those coming to the site via Twitter links. “As it stands, Twitter is a relatively small (but important) part of our traffic, and we expect this to have a positive effect,” Williams tweeted to explain the move.
I’m definitely rooting for Medium. I like the idea of a democratized platform that pays writers and tries to install incentives for quality writing over clickbait. I haven’t placed most of my writing behind the paywall (although Medium once commissioned me to write a freelance piece in the membership’s early days), but I’ve been keeping an eye on the platform as a potential source for income. I like the idea of a future in which I only pursue stories that interest me and I’m not reliant on the companies, organizations, and publications that currently supply my freelance income. So yes, while I was one of those who briefly thought Williams had lost his marbles two years ago, I now consider myself one of his biggest cheerleaders. At the very least, he deserves credit for trying to make the web a better place.