Medium shifts direction, away from ads and towards… what, exactly?

Apparently, the ad model isn’t working

In another zigging of the zag called Medium, Ev Wiliams and his lieutenants have returned from a winter retreat and decided — despite readership and published posts being up 300% in 2016 — to make major corrections in the company’s direction.

Of course, the company’s old direction was unclear, and despite his explanation in Renewing Medium’s Focus we are still unclear as to why it was necessary to close the company’s New York and DC offices and lay off 50 sales, support, and business people.

Recall that Medium has zig-zagged before. In May 2015, Ev wrote Medium is not a publishing tool, laying out a case for Medium as a social network:

We started out by building a great tool for writing. And it’s not even the editor itself that created the main value. It was the fact that you could easily write and share a story without the setup, overhead, or commitment level of starting a blog. It’s clear that there are many more people who occasionally have valuable perspectives to share than there are people who want to be “bloggers.” These people love writing on Medium, even if they see it as just a tool to create a nice page to point people to from Twitter.

[… Ev discusses specifics of social affordance on Medium, like comments and highlighting, as areas where Meidum has more to do. …]

But every day we’re seeing growth of this activity and great examples of the network power of Medium being realized.

That’s why I say Medium is not a publishing tool. It’s a network. A network of ideas that build off each other. And people.

To which I responded in What’s Going On At Medium?,

So, it’s a network, I guess, built around longish form writing.

But unmentioned in his post is the news that the company’s investment in its own publications is reportedly being trimmed, and structural changes are being made. As reported by Business Insider, The Message will now be managed by the team at Matter, while the former ‘writers at Matter’ will now just be ‘Medium writers’. War Is Boring — arguably one of the best investigative journalism site on war — is leaving Medium. Re:form — Medium’s design publication — has been closed after no one stepped up to sponsor after BMW dropped out. Likewise, The Archipelago has been shut down, and those writers are out.

As a Medium user most of this is perhaps irrelevant, except to the degree that the turmoil reflects barriers to adoption of the Medium network/platform. As a user, I would like to see interesting stuff to read, smart people to interact with, and an improving user experience. Much of that has been happening, but I fear that the zigging and zagging of the company’s direction will lead others to quit the network/platform.

So, I am betting that once again back-office business realities are intruding at Medium, and these are sparking the course correction and layoffs. The obvious observation is that growth in page views and posts are not linearly related to revenue, so there finances are likely to be the reason for cost cutting, like shuttering offices, and reducing head count in general.

The specifics of the directional change is less clear.

Williams says in his post yesterday,

We are also changing our business model to more directly drive the mission we set out on originally.

Which he nows states was, and is, to be a new publishing platform (despite the title of his zig-zag post in May 2015). In yesterday’s post he makes this ‘clear’,

Our vision, when we started in 2012, was ambitious: To build a platform that defined a new model for media on the internet. The problem, as we saw it, was that the incentives driving the creation and spread of content were not serving the people consuming it or creating it — or society as a whole. As I wrote at the time, “The current system causes increasing amounts of misinformation…and pressure to put out more content more cheaply — depth, originality, or quality be damned. It’s unsustainable and unsatisfying for producers and consumers alike….We need a new model.”

We set out to build a better publishing platform — one that allowed anyone to offer their stories and ideas to the world and that helped the great ones rise to the top. In 2016, we made big investments in teams and technology aimed at attracting and migrating commercial publishers to Medium. And in order to get these publishers paid, we built out and started selling our first ad products.

Apparently, the ad model isn’t working.

We had started scaling up the teams to sell and support products that were, at best, incremental improvements on the ad-driven publishing model, not the transformative model we were aiming for.

To continue on this trajectory put us at risk — even if we were successful, business-wise — of becoming an extension of a broken system.

Upon further reflection, it’s clear that the broken system is ad-driven media on the internet.

So, he wants to move to a business model that’s not reliant by the ad system, but one where authors (and publishers, presumably) are ‘rewarded based on the value they’re creating for people’. As he says,

We believe people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention. We believe there are millions of thinking people who want to deepen their understanding of the world and are dissatisfied with what they get from traditional news and their social feeds. We believe that a better system — one that serves people — is possible. In fact, it’s imperative.

So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day.

So this looks like an adoption of subscription-supported publishing, or pay-per-post, or something else along those lines. Perhaps he wants to allow publishers to build subscriber-supported publications like The Information? Or build a system like Spotify, that distributes royalties based on usage?

At any rate, it’s not clear what he’s going to do, and so to some extent this feels like the frosting troweled onto a layoff. But maybe he has a plan in the making. He just hasn’t laid out the specifics yet, so it’s hard to judge.

Originally published on Stowe Boyd and The Messengers.

Founder, Work Futures. Editor, GigaOm. My obsession is the ecology of work, and the anthropology of the future.

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