Medium is an online media platform leveraging the concept of social media for journalism, where writers are prompted to the platform to build their following through in-depth writings and essays. The platform follows a freemium model, and it makes money by prompting users to subscribe to articles behind paid walls (Medium charges $5/month or $50/year), and writers are paid based on readership.
Table of Contents
Origin story
Medium is an online social journalism platform, publishing content from amateur and professional writers alike.
Medium was created in 2012 by former Twitter CEO and co-founder Evan Williams. Indeed, Williams developed Medium as “a new place on the Internet where people share ideas and stories that are longer than 140 characters and not just for friends.”
Once established, the platform grew quickly. Any writer can publish their thoughts to the world in a range of categories such as Health, Politics, and Sport. The company also partners with similar organizations to publish content on its platform, including Sports Illustrated, Hacker Noon, and The Economist.
The company now boasts a monthly readership of between 85 to 100 million users. However, Medium seeks to focus on the amount of time each user spends reading on the platform. This, Williams argues, is a much more accurate determinant of business success.
Value Proposition:
Long-Form Content Hub: Medium positions itself as a platform for in-depth, thoughtful, and long-form content. It caters to readers looking for more substantial and engaging articles and essays beyond the limitations of social media platforms.
Diverse Authorship: Medium welcomes writers of all backgrounds, from amateur bloggers to seasoned journalists. This diversity of authors contributes to a wide range of perspectives and subject matter, making it appealing to readers seeking various viewpoints.
Freemium Model: The platform offers a freemium model, allowing users to access a limited number of articles for free. This encourages users to explore the platform and sample content before committing to a subscription.
Reader Subscription: Medium’s paid subscriptionmodel, priced at $5 per month or $50 per year, provides subscribers with unlimited access to premium articles and additional features like audio versions of popular articles.
Writer Compensation: Writers are compensated based on the engagement and readership their articles receive. This compensation structure incentivizes authors to produce high-quality and engaging content.
Customer Segments:
Readers: Medium attracts a diverse audience of readers interested in thought-provoking, informative, and well-researched articles. These readers appreciate the depth and breadth of content available on the platform.
Writers: Medium caters to writers across the spectrum, from aspiring bloggers to established authors. Writers are drawn to the platform to share their insights, build an audience, and potentially earn income through reader engagement.
Publishers: Media organizations and publishers partner with Medium to expand their reach and audience. This collaboration allows established publications to share content with a broader online readership.
Distribution Strategy:
Global Accessibility: Medium is an online platform accessible to readers and writers worldwide. It breaks down geographical barriers, enabling content to reach a global audience.
Freemium Model: The freemium model encourages users to explore the platform without immediate financial commitment. It offers a taste of premium content while providing an incentive to subscribe for unlimited access.
Direct Contribution: Writers can contribute content directly to the platform, reducing the need for traditional publishers. This direct contribution model empowers authors to reach a broad audience independently.
Partnerships: Medium collaborates with media organizations and publishers, allowing them to publish their content on the platform. This expands Medium’s content offerings and attracts readers from established publications.
Marketing Strategy:
Writer-Centric Promotion: Medium promotes itself as a writer-friendly platform, highlighting the opportunity for authors to share their insights and build an audience. This approach attracts writers who value a platform focused on content quality.
Subscription Emphasis: The platform’s marketing emphasizes the value of a subscription, highlighting the benefits of unlimited access to premium articles and additional features like audio versions.
Curation: Medium curates a list of daily articles on its homepage, showcasing engaging and diverse content. This curated selection encourages readers to explore the platform regularly.
Writer Compensation: Medium’s compensation structure, based on reader engagement, serves as a marketing tool by motivating writers to create compelling and shareable content.
It is first important to note that readers do get access to three articles per month without charge. But the vast majority of Medium content is hidden behind a paywall. To access this content, Medium charges $5/month or $50/year. This gives the user unlimited access to stories and publications. They can also listen to audio versions of popular articles and log in to a homepage with a list of curated daily articles.
When a reader with a subscription reads a subscriber-only article, a portion of their membership fee goes to the article author. At the time of writing, the exact fee is dependent upon the time spent reading the article itself.
Spotify freemium model as an inspiration
For Medium to be able to make money, Williams frequently cites the Spotify business model where listeners can enjoy ad-free, high-quality music for a small monthly fee. Here, the difference in value between the free and premium versions is clear.
In the case of Medium, however, the difference is less clear. Content on Medium is designated as premium at the discretion of the author – there are no criteria with which it must first be assessed. Authors can also choose to release their work as free content to attract new readers and build a following.
As a result, critics believe the sole method of Medium revenue generation provides little value to consumers. It remains to be seen as to whether this way of making money is sustainable.
Key takeaways:
Medium is an online publishing platform. It promotes social journalism, showcasing the work of amateur writers alongside professional authors and large publishing companies.
Medium makes money by hiding most of its content behind a paywall. While readers can access three articles per month free of charge, they will need to pay $5/month to access more.
The designation between free and premium content on Medium is up to the discretion of the author. Premium articles do not need to meet stringent criteria and authors may choose to release premium content for free if they have an ulterior motive. This has the potential to make the company’s business model unsustainable.
The New York Times generated over $2 billion in revenues in 2021, $1.36 billion in subscriptions, $497 million in advertising, and $215 million in other revenues. Of the subscription revenues, over $773 million were generated by digital subscriptions, while printed subscriptions generated $588 million.
Google is a platform, and a tech media company running an attention-based businessmodel. As of 2021, Alphabet’s Google generated over $257 billion in revenues. Over $209 billion (over 81% of the total revenues) came from Google Advertising products (Google Search, YouTube Ads, and Network Members sites). They were followed by over $28 billion in other revenues (comprising Google Play, Pixel phones, and YouTube Premium), and by Google Cloud, which generated over $19 billion in 2021.
Facebook, the main product of Meta, is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues in 2021, of which $114.9 billion was from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm).
Twitter makes money in two ways: advertising and data licensing. In 2021, Twitter generated $4.5 billion from advertising and $570 million from data licensing. While Twitter generated $5 billion in total revenues, it lost 221 million.
Medium is an online media platform leveraging the concept of social media for journalism, where writers are prompted to the platform to build their following through in-depth writings and essays. The platform follows a freemium model, and it makes money by prompting users to subscribe to articles behind paid walls (Medium charges $5/month or $50/year), and writers are paid based on readership.
Wikipedia is sustained by the Wikimedia Foundation, supported mostly by donations and contributions, which in 2021 amounted to over $153 million. Wikipedia is among the most popular websites on earth, and it is, as of these days, an open, non-profit project, on which twelve other projects have been developed.
WordPress.org became the most popular CMS and blogging platform in which the Foundation owns the trademark, and revenues come from donations. The Foundation holds a public benefit corporation that manages the revenues from WordPress events and conferences. Automaticc – the business arm – monetizes premium tools built on WordPress.com (a premium platform) through freemiums.
Squarespace is a North American hosting and website-building company. Founded in 2004 by college student Anthony Casalena as a blog hosting service, it grew to become of the most successful website-building companies. The company mostly makes money via its subscription plans. It also makes money via customizations on top of its subscription plans. And in part also transaction fees for the website where it processes the sales.
Wix is an Israeli provider of cloud-based web development services and is perhaps best known for its drag-and-drop website builder. Founded in 2006, the vision was to empower anyone to build their own site without coding, thus creating a drag-and-drop solution. Wix operates on a freemium model to attract customers to its platform, where those are prompted to enroll in one of its subscription plans.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
