I’ve been a reader (avid) and a writer (more sporadically) on Medium since 2016. When I first discovered it, I was stoked that a platform like Medium existed where the belief behind the platform is that “words matter” and its promise was “to help you find the right audience for whatever you have to say”. It was perfect for someone like me (yes, an avid reader and sporadic writer). Over the years though, Medium has always felt like a teenager growing into its own and figuring out who they want to grow up to be.
While I’ve been thinking about this topic for awhile, the impetus to finally get this post finished was Medium announcing a few days ago that they were launching a new set of publishing tools to make Medium more expressive. I think this is a move in the right direction but definitely not enough and hopefully not too little too late.
Here begins a longwinded explanation of where I think Medium’s value is and why they haven’t managed to unlock that value yet.
But before we continue, if you’d like to visit my Substack, you can find it here. Also, I will continue being a paying Member on Medium — I can’t wait for the day they figure it out.
A Short History: From Ink to Internet
Pre-Internet, content was largely delivered by paper — an expensive, capital intensive endeavor. Most publications aimed to maximize reach by heavily subsidizing the price consumers paid with advertising revenue. Like publications and creators, advertisers were also interested in reaching the broadest audience possible.
Consumers relied on publications to regulate quality and it was with publications that consumers had the strongest relationship with. People were far more likely to refer to themselves as a reader of the New Yorker than they were to identify as readers of a specific writer or contributor.
The Internet substantially changed the economics underlying that model. The fixed costs of publishing on the Internet were substantially lower than print, while marginal costs dropped to almost zero. There was no longer a cost barrier preventing creators from reaching and building their audience directly — only a reputation barrier.
Where before, creators were in competition to be featured in publications, this new generation of independent creators compete for readership in a global pool of free and abundant content. Publications used to be the tastemakers, deciding what was cool enough to publish and what wasn’t. Now, publications and creators alike are at the mercy of digital content distribution systems — search engines and social media that substitute taste and editorial decision making with algorithms. For the independent creator, getting in front of an audience has at once gotten both easier and harder.
Similar to their pre-Internet predecessors, many independent creators lean on the advertising driven model to provide content to consumers for free. However, the value equation had also changed for advertisers. The same digital content distribution systems dictating what consumers saw had also given advertisers the tools to specifically target potential customers. These ad targeting tools now own the bulk of ad inventory, with Google and Facebook alone representing over half of digital ad spend — leaving little left over for creators.
The alternative, subscription driven publishing, has seen a shift in narrative from impossible (what makes your content so special people will pay for it even when so much free content exists out there) to viable, as illustrated by these tweets:
Subscriptions do make for more reliable revenue than ads. In addition, because they only need to align the interests of two stakeholders (the creator and the consumer), they tend to be more sustainable than ad-driven models which need to reconcile three stakeholders (the creator, the advertiser, and the consumer). However, there’s no denying that achieving the reach and the reputation to be credible enough on your own is not easy.
Self-Publishing But Make It Social
Medium is exciting to me because it presents a third alternative — social self-publishing, a model that vertically integrates content management with distribution to consumers. It was founded on the idea that not only will Medium make it easy for you to write and publish, but Medium will also make it easy for you to find the readers for your writing.
Despite the most common narrative today (Substack is disrupting Medium!!), there is very good reason to believe that Medium still has a big opportunity at their fingertips. In theory, Medium aggregates and makes sense of the abundant content in its supply, thereby being valuable to enough paying readers such that it also becomes a valuable platform for its creators. As discussed, the reputation barrier is actually a creator’s biggest hurdle today and Medium, with its platform and algorithm, can be the modern take on the curation publications used to be solely responsible for.
In addition, Medium gets around the subscription fatigue motivating the formation of newsletter bundles such as the Everything bundle and the more recently announced, Type House. Ev Williams, the founder of Medium, even describes it as “one of the largest bundles of original content of its type” and therefore “great value for readers”.
However, Medium under-delivers on its potential because its current business model is poorly set up to support its value proposition. Medium monetizes by charging a monthly membership fee to Members who get unfettered access to content behind the paywall. Medium then splits these membership revenues with creators based on how engaged paying members are with each specific creator’s paywalled content.
The Problem: Medium’s Identity Crisis
Ev describes Medium this way:
“Medium is not unlike other digital media subscription businesses like the Washington Post or The New Yorker — or even Spotify and Netflix. We sell content on a subscription basis. Like most paywalled sites, we give some stories away for free (currently, it’s three per month). But unlike most paywalled publications, we rely solely on subscriptions (no advertising), and we have a mix of original and non-original content.”
This description glosses over an important distinction. The Washington Post and The New Yorker are quality first media subscription businesses; Spotify and Netflix are discovery led. The first two are publications who produce a limited quantity of consistently high quality content. Each subscriber receives a uniform experience. The latter two host an abundant supply of content and use data to deliver the optimal experience for each individual subscriber.
The value proposition Medium delivers is more similar to the latter but how its system functions now is more reminiscent of the former. To be even clearer, Medium should be an aggregator but it acts more like a publication.
The goal of a subscription publication is to first and foremost maximize the number of paying readers. In line with this goal, they typically operate a metered paywall with a high stop rate so as to convert as many readers as possible. Where they can, content is created in-house to maintain that consistent experience; where they can’t, they exercise as much editorial judgement as possible.
On the other hand, an aggregator’s early success depends on its ability to be an attractive platform for suppliers of content, thereby enabling it to acquire users. In time, once an aggregator has achieved a critical mass of users, its advantage becomes increasingly defensible as it becomes more and more invaluable to its suppliers.
Having mis-aligned their current system to their value proposition, Medium is stunting the growth of both the demand and supply side of their platform, in three main ways:
1) High stop rate paired with limited control over quality of content
Like publications, Medium has a very high stop rate. Actually, a higher than average one — the average successful publication has a five article metered paywall whereas Medium has three. Unlike publishers, Medium has a little to no control over the quality of content free readers will encounter, as they would likely have followed a link from elsewhere onto Medium’s platform. This inconsistency limits Medium’s ability to convert paying readers.
In contrast, aggregators are usually either completely free to use (i.e. Google, YouTube, Spotfiy) or completely pay to use (i.e. Netflix). Providing limited access to content hosted on an aggregator is counterintuitive since the true value of an aggregator is only experienced when a personalization engine is paired with a tremendous supply of content.
2) Creators get all the content risk with little of the reward
Like publications, Medium has an extensive editorial and writing staff, producing a substantial amount of content in-house to support their self-curated publications. Unlike both publications and aggregators, Medium transfers almost 100% of the content risk onto creators. Content risk is defined here as the likelihood of incurring the costs of poor content performance, especially in comparison to one’s investment in its creation.
Publications typically pay creators upfront for the right to publish their work, thereby taking on most of the content risk, at least post-creation. Aggregators will either make it free for creators to post (i.e. Instagram, YouTube) or pay the best prices they can upfront (i.e. Netflix). In both cases, content risk for creators is diminished. For aggregators, content risk is spread out across a wider pool of both supply and demand, making them both more resilient and less risk averse than publications.
On Medium, while it is free for all creators to publish, writers who choose to paywall their work are only exposed to Medium’s paying members and are paid out of this limited pool of membership fees. Writers who choose to publish in front of the paywall so readers can view their content for free are de-prioritized by the platform for promotion. No matter which a writer chooses, it is a losing situation. Phrased in the most negative light, Medium exploits creators to accumulate a diversified supply of content with which to attract paying customers.
3) As creators grow, Medium only becomes less valuable
The creators who publish on Medium fall into one of the four quadrants below:
In the upper left quadrant are infrequent writers who are already well-established. This is Barack Obama posting a rallying cry after George Floyd was killed by police. This is Jeff Bezos posting an open letter to the National Enquirer. Regardless of where they’re hosted, these posts will likely achieve broad readership. For them, Medium is an appealing choice because the ease with which anyone can post to Medium makes it feel like a more democratic, honest, and authentic forum.
Their less established counterparts (Quadrant 1) are likely to find Medium the most attractive. Since they have no pre-existing audience, Medium enables them to reach more readers than they could organically. If they want to skip straight to monetization, Medium enables them to do that with minimal effort.
However, as creators begin to post more frequently, invest more in their content, and shift their priorities towards building an audience (Quadrant 2) or monetizing (Quadrant 3), Medium loses its appeal. Your total addressable audience shrinks to that of Medium’s paying members so long as you want Medium’s help being promoted. Which you do, because Medium is really the one who owns the relationship with readers. Medium is the one with control over the algorithm that evaluates content quality and determines how creators are paid. When a reader becomes a paying member, what they demonstrate is confidence in Medium’s ability to attract good creators and curate quality content; what they’re not investing in is their relationship with the creator. Ultimately, Medium’s job as a curator naturally commoditizes the creators and content on its platform. In this aspect, Medium is a classic aggregator.
As you can see, even though I believe in the problem Medium set out to solve, I have complaints about how they’re doing it. However, I’ve also become a bit frustrated with the story that Medium’s shortcoming is as simple as not giving creators adequate ownership. While not wrong, this interpretation is doing the complexities of their business model a disservice.
Plenty of aggregators commoditize the suppliers of their content — it’s baked into their business model. You’d be hard pressed to make an argument that YouTube or Instagram creators have any more control over the distribution of their content but here, the differences are two-fold:
- YouTube and Instagram are open platforms whereby there are no barriers to achieving as broad of a viewership as possible. YouTube especially is heavily involved in supporting and developing their creator community while neither limit the ability of their creators to make an income (Medium forbids third-party sponsorships or advertisements on paywalled posts). The result is creators have both the potential to reach a wide enough audience and a better chance at making enough of an income.
- Text is inherently a lot less fussy of a medium than most other media. This enables the kind of direct relationship between creators and consumers (email) in a way that’s hard to achieve for video, audio or even images.
[Blogging] is the only communications tool, in contrast to every other social service, that is owned by the author; to say someone follows a blog is to say someone follows a person.
— Ben Thompson, Blogging’s Bright Future
Does that mean social publishing for text is impossible? Given how hard I think breaking into independent publishing is for creators who aren’t already established, I think that conclusion is still too early to reach. Instead, my hypothesis is that it’s possible — but Medium will need to develop a robust creator program that can be compensated from a pool of money not tied to Member revenue. Relying on the Member revenue pool to grow fast enough to support its paywalled creators is probably wishful thinking.
Instead, Medium needs to take a more proactive approach by bringing creators and publications to their platform the way they did when they first launched. To make the paywall model work, Medium needs to be known first as the only place on the Internet to access a specific type of content (just as Netflix has exclusive contracts for shows), before they can be seen as “one of the largest bundles of original content”. (Somewhat similarly, Substack is starting to be seen as the place reputable journalists exit onto.) Ideally, this content needs to come from independent creators and not Medium’s in-house team to demonstrate in good faith to creators, what’s possible for them.
This is a strategy not specific to Medium; instead, it’s one being replicated across aggregators in general. Recently, platforms have been investing more in acquiring creators while creators are becoming increasingly multi-platform. For example, TikTok star Addison Rae announced plans to launch a Spotify-exclusive podcast, retiring rapper, Logic, signed a multi-million dollar exclusive streaming contract with Twitch and Facebook is reportedly offering financial incentives to TikTok stars to take their audiences onto Reels, a TikTok lookalike attached to Instagram.
All of this at once emphasizes the indispensable roles that aggregators play for their content suppliers while also playing out the desire that creators have to build and own their brand in a defensible way.