Subscriptions on Medium
At the beginning of this year, Ev Williams announced that Medium was renewing it’s focus. It started by laying off 50 employees in sales, support, and other business roles and closing down offices in NY and DC. A month later, Ev announced at the Upfront Summit that Medium will launch a consumer subscription product.
Here’s the latest announcement:
All eyes are on Medium now. They’re taking on a big challenge — disrupting ad-supported publishing. In a world where publishing has always been paid by advertising (and where it still works relatively well), it’s hard to break that model, for both publishers and consumers. But as Ev points out, ad-driven publishing is a broken system:
Upon further reflection, it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.
Besides being misaligned with readers, online advertising is becoming less and less sustainable as ad revenue keeps declining with the continued growth of Adblock. In response, publishers who won’t give up on ads may jam pages with even more ads, hoping to make up their losses on the audience who still hasn’t installed Adblock. Last year, Google Adsense even removed their limit on the number of ads per page for their publishers. Whether this is in response to Adblock or not, it certainly makes the advertisers happier. Publishers may also increase their volume of low-quality ‘click-bait’ articles to bring more traffic to provide some ad revenue. It’s a vicious cycle.
Medium is making the right move. In the face of all the changes in online media and internet user behavior, 100% support by advertising is not a long-term strategy. We have a lot of respect for Medium in taking on this challenge that most publishers have ignored or are afraid of. But in moving forward on a subscription model, Medium needs to think critically about how they implement it. With any implementation, Medium risks losing their loyal audience of writers and readers.
A key consideration is that Medium is a service for both publishers and readers. Publishers have a literal “medium” for their content and a simple way to write and share without creating a website, worrying about SEO, hosting, etc. Readers discover new and interesting content, a lot of which will come from writers who couldn’t reach those readers before.
So the main challenge with a subscription will be aligning the goals Medium’s publishers with the wants/needs of Medium readers. The tricky part is that there is no one type of publisher or one type of reader on Medium. So how do you build a system that maximizes the overall value to the complete audience?
As we described in our previous post about challenges for content monetization, it’s important to understand that every website has casual visitors and frequent visitors. Casual visitors come to the site a few times per month or less, whereas frequent visitors come at least every few days. Causal visitors generally make up 70% or more of the audience, and these visitors will never pay on the site. They just don’t get enough value for a payment to make sense.
So going back to how Medium maximizes value to all of its users, it helps to outline the different types:
Medium publishers. In the context of subscriptions, there are 2 basic types of publishers on Medium: publishers who want to promote and publishers who want to be paid. By “promote”, we mean promote their content/stories/ideas, promote themselves, or even promote their business by providing expert knowledge in their field. These publishers don’t want to directly monetize their content. They mostly want Medium for its audience. This group makes up the majority of Medium’s publishers.
On the other hand, there’s a smaller but decent number of publishers who produce content they want to monetize directly. Yes, they also want to promote ideas and expertise, but they want provide it at a level where it can be sold. For now these publishers can use Medium to direct traffic to their paid content.
Medium readers. The break down here is simply casual vs frequent users. Some readers come to Medium on a daily basis for news, stories, and advice. Other may occasionally find Medium from a Google search or from links shared on other social media platforms. Obviously, users who come every day will be more interested in a paid subscription to Medium.
Now that we’ve outlined the different types of users, we’ll describe our ideas for 2 main subscription types for Medium, with their pros and cons.
(1) A single, site-wide subscription.
A site-wide subscription would block access to anyone who is not a paying subscriber. It should definitely be a metered paywall (read or publish 10–20 articles per month for free before being asked to pay) rather than a hard paywall (no content or no publishing without paying), which would turn away too much traffic.
Pros: With a metered paywall, most casual visitors can still access Medium without interruption. However, it would require all users to sign up, to avoid the common hacks of metered paywalls. Only the most frequent visitors would be asked to pay. And these visitors already get so much value from Medium, that they’d probably be willing to pay for access to the publishing tools and or the content. The subscription is also simple. Users choose from 2 options: to pay a single monthly fee or not.
Cons: A site-wide subscription will turn away the majority of publishers who are on Medium to promote but aren’t interested in making money from their content. Case in point: I Will Leave Medium if there is a Paywall by Greg Ferenstein. Sure, Medium is a great writing tool, but its biggest value to publishers is its audience. Publishers who want their content to reach the most readers will publish where their content is freely available. In addition, if Medium has a site-wide subscription to content itself, content creators should get paid. The distribution of these payments would be complicated and tough to make fair. Platforms like Spotify alright highlight this payment problem.
(2) A content marketplace.
In the marketplace model, publishers would be a given a ‘monetization toolbox’ so they can create their own subscription on Medium’s platform. For instance, every publisher could create a monthly subscription for their most premium content. They can still provide free, non-premium content to casual readers but they’ll have an extra section of paid content for their most dedicated readers.
Pros: Publishers choose whether they want to charge for content or not. And readers decide what content they want to pay for or not. There will still be plenty of free content for casual readers to stay engaged, but there will be unique paid content for frequent readers to get even more value out of Medium. Another value to frequent readers who would subscribe to multiple publishers — they can use their single Medium account to access and pay for content. Compare that to now, where if you want to subscribe to NYT and WSJ, you have to make multiple accounts and worry about a hassle if you ever want to unsubscribe (for both, you have to call customer service to do so!). Finally, the marketplace solves any issue of publisher payouts. Medium can take a % of the payments, and the rest goes directly to that publisher.
Cons: Publishers will want many custom tools, but that will ultimately make the subscription experience complicated for users. So Medium will have to balance what publishers want vs. what’s easiest for the paying users. We suggest letting publishers have just one subscription, and all they need to do is decide the price and which of their articles will be included in it. Medium will also need to build ways for publishers to handle all communication with their subscribers. It would be a nightmare for Medium to handle all the questions, customer support, possible refunds, etc. for 100s of publishers.
Interestingly, Medium already piloted publisher subscriptions last year. Here are a couple of examples. 400 publishers applied for the Beta launch, at least 5 started subscriptions. It may just be matter of time for the subscription options to roll out to any publisher.
As a side note — if Medium succeeds with a content marketplace, there is another big opportunity for growth. Eventually major publishers like NYT and WSJ will want to publish their premium, paid content directly on Medium. Medium’s advantage will be the large network of paying users who regularly purchase online content. Think about why most major retailers now put products on Amazon — they do it for the audience. Medium can even build a “Sign in with Medium” button that publishers add to their own sites. The button would let users log in and pay instantly with their linked credit card on Medium.
These are our thoughts on the challenges Medium faces with a subscription and 2 best ways to implement it. We want to know — what are other ways for Medium to offer subscriptions? or what features you would be willing to pay for? Please share any ideas in the comments. We (and probably Medium) would be happy to hear them.
On this topic of Medium’s move to subscriptions, we also recommend these posts: “Long Medium” by M.G. Siegler, “Wow, It’s Official — The Subscription Model is Coming to Medium…” by Dakota Shane, “Venture capital is going to murder Medium” by DHH, and “Ev Take My Money -or- Where’s Medium Premium?” by Borja Rojano. If I’ve missed a post here, please add it to the comments, and I’ll keep this list updated.
If you are a publisher, startup or developer who’s decided to build a paywall and membership service from scratch — feel free to start with our open-source code.
