From Medium to Small: A step in the other direction.


evWilliamsJanuary came bearing bad news for about 50 employees of the blogging platform, ‘Medium,’ with the company announcing closing of its New York and Washington, D.C. offices along with a reduction of close to one third of its workforce.

For those of you who aren’t familiar, Medium is a publishing platform, similar to Google’s blogspot. Medium was started by Ev Williams–one of the co-founders of Twitter–in 2012. Where Twitter allows you a maximum of 140 characters per post, Medium focuses on long form writing where you can pour your heart out. Medium raised a Series C round of $50 million in April last year, just under one year after raising a $57 million in Series B. That’s some serious funding.

Which is why this pivot by Medium comes across as such a surprise. Founded by Ev Williams, successful in terms of user base and traction, and funded in the millions, Medium has spent five years trying to figure out a revenue model, and it looks like it still has more work to do on that front.

But then, the business of content is tough. Most platforms rely heavily on ad revenues. However, ads are often invasive and annoying–especially if they want to make you the right kind of revenues. This is exactly the sentiment Ev Williams described in his blog post announcing the news. The catch-22 situation that plagues most services in this space is simple: when you publish content for more eyeballs and increased ad revenues, the quality takes a hit, and high quality content is expensive.

Medium has another very interesting service: Publications. Publications are distributing hosts that carry articles like newspapers and magazines. With an initiative called ‘Medium for Publishers,’ the company allowed publications to charge a subscription fee for the content they offered, with Medium getting a cut. In addition, Medium also generates revenue through promoted posts. All this in addition to the revenues generated through advertising. Medium is a well liked and reasonably popular platform in the Valley.

The question now is, what pivots can a company like Medium consider. Monetization via a content platform is tough, even for Twitter, and while nothing has been announced on the direction the company will take, the general sentiment seems to be that Medium will double down on revenues from publications.

While Medium has a ton of work and soul searching to do, there are some revenue generation strategies that other content businesses have used with varying degrees of success. Here are a couple that I can think of:

  • Niche market: One way to attract readers and to get them to pay for content is to make it highly targeted, thereby creating value and quality for readers. Think research publications, industry-focused reports and studies, and so on.
  • Unique Consumption. For example, an exemplary sales professional creating an online course that needs to be purchased. This also ties into the earlier point about being specific.

Among other forms of content-based revenue, we have ebooks, subscription-only sites such as the Wall Street Journal that put their content behind a paywall, and more. And of course ads. The problem with going after ad-based revenue is that, in order to get enough revenue, you must give marketers what they want: better targeting. Which means you need to be OK with tracking your users, collecting troves of information about their location, gender, likes and preferences, and more. As Facebook and Google have shown, if you collect enough information about users, marketers will pay top dollar to show precisely targeted ads to those users.

So although ads are great for marketers, they make for a poor experience for the users, who must accept giving away a lot of information, and seeing intrusive ads. It looks like the team at Medium has decided that this is not the business model they want to use. Hopefully they’ll come up with something that is not as invasive, and yet makes them enough revenue to be a successful business.


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