Ev Williams is in New York to have meetings. He’s meeting with writers to discuss producing original content for his Medium platform; he’s meeting with editors about potential work with the company; and he’s meeting with journalists like me to try and describe just what Medium is now. After the company’s latest strategy shift away from ad revenue and toward individual subscriptions, he has a lot of talking to do.
I’ve written quite a bit about Medium for over the last few years, and with each business shift, I try my best to understand what the overall plan is. So here I am sitting down with the Twitter cofounder, having him walk me through what could be called Medium 3.0.
Now Williams and Medium have a new system in place. Instead of relying on ad revenue, they want subscribers to provide most of the revenue. He has a few things to iron out, though. For one, he has to hire a brand-new editorial team. “I’m actually talking to editors while I’m out here,” Williams says. These editors would focus on the big Medium-commissioned pieces and help curate the front page for subscribers. Specifically, Williams is looking for an executive editor and likely a few others. The goal is to have the team in place in the next quarter or so.
Beyond this hiring effort, Williams is also here to explain Medium’s recent business shift. Earlier this year, it announced a drastic change in its revenue model. Instead of being beholden to the endless rat race that is the digital advertising business, the hybrid blogging platform/publisher wanted to create something more sustainable. And it decided to go with a subscription-based model, which is a far cry from a revolutionary idea yet something Williams thinks has legs.
Over the last few months, Medium has rolled out a “partners” program that gives premium content to paying subscribers. The nuts and bolts of this system is a bit wonky, but the general idea is that the content individual subscribers most “engage” with receives the lion’s share of the revenue. (For example, if I’m a Medium subscriber and I share or “clap” more often for a specific writer, my funds will be allocated to that person.) Now that the dust has settled and the system is more or less becoming more formalized, Williams is making a more sustained pitch about why people should turn once again to Medium.
“It’s looking very promising so far in terms of the engagement with the content,” Williams says. “It really enables something new–a different model, which I’m feeling optimistic about.” His optimism stems from both the engagement, which is based on a bunch of different factors–most notoriously its “claps” function, which is akin to a Facebook “like.” He also says that subscription growth is healthy, although he won’t provide numbers. “It’s very early days,” he says, “but shows the signs of a system [where] all the parts are working.”
Not Just Claps
Williams is quick to explain this new system, given some of the less-than-stellar press it received. When it was first announced, Medium explained that writers would get a cut of the subscription revenue, which would be divvied up based on engagement. Claps would be a big factor, with writers who receive more claps taking home bigger paychecks.
This concept quickly became the butt of many Jeb Bush-esque “please clap” jokes, while others expressed real trepidation with relying on a “like”-style function as an indicator of engagement. In response to the criticism, Williams admits the claps element may have been overemphasized. He says he and his team use a number of different factors to determine what gets the most engagement. Others include read time and probably social shares as well, although Williams is hesitant to give away the model’s secret sauce. “I think about it a little bit like Google’s search quality algorithm,” he says, saying it’s about figuring out signals of value that can’t be gamed.
“It’s probably not going to be super transparent what [those factors] are,” Williams adds.
So it’s not just claps. And the system is based on subscription revenue, with a model that allocates all of the money received from subscribers to the writers. “We designate a budget, which is tied to overall subscriber revenue,” explains Williams. Currently the budget hits the current revenue, but the plan is–once the system is fully going–that the budget will be less than the overall subscriber earnings. Once that happens–voila!–a more sustainable media business.
What Is Medium Now?
Over the past few years, Medium has gone through a few big changes. It has recruited big writers, editors, and publications to its site as a way to grow its audience, only to unceremoniously change its tune. In 2015 it built a well-reputed line of internal publications, and then decided to cut many of them. Later on, Medium would once again woo publishers to use it as an alternative to software like WordPress and then, a few months later, laid off its ad sales team and told these sites the company would no longer seek ad revenue (which is what kept many of these publications afloat).
Which is to say that Medium has run to and fro experimenting with different revenue models for years now. As one source told me in 2015, it seemed like the company was just “throwing shit at the wall to see what sticks.”
But with this entire new business model, what exactly is Medium now? Is it a wholly different beast from what it was before? “It’s square one from the business model,” he says, but it “overlaps with what we’ve done before.”
Williams says he has been talking to bigger publishers to use Medium as a supplementary distribution point, and a bunch have already joined–including the New York Times, The Guardian, and Bloomberg. Still, he acknowledges that many native publishing platforms–Facebook’s Instant Articles, for instance–have had mixed success.
“I think, in the future, most publishers will certainly still have their home pages,” Williams explains, “Platforms will serve as distribution points for different types of content.” Subscribers will be given curated content, and they pay for the ease of having it in one bundle, or so the idea goes.
The question remains, though: Are there a enough people who will pay? “I think there is a segment of the market that is discerning and really cares about the information they consume,” says Williams. “They recognize the importance of innovation and they also realize it’s worth paying for.”
So that’s what Medium is pitching now–both to readers and to writers. It wants to emerge anew; no longer a mere PR blog post publisher. It wants to be something more. Williams is signing on more writers by the day and is once again building out an editorial apparatus to help that grow. Crucially, though, Medium needs to bring in paying readers and lots of them. But according to Williams, that’s the easy part: “I’m honestly not that worried about subscriber growth.”
He goes on, “I think there’s an engine there that’s going to work.”