Is Medium’s Business Model Sustainable?

If you look at my archive, you’ll see at least a dozen posts on Medium. Almost all of those posts are praising Medium.

I take Medium seriously, use it as the single source of traffic, and learn a lot of lessons from my Medium stats. It’s an excellent platform for readers, writers, and humanity.

In short, I’m a fan of Medium. Nevertheless, I don’t believe in its business model, and I’ll explain why.

The Number of Paid Memberships Is Growing

In his last post, Ev Williams, CEO of Medium, shares the progress of Medium’s subscription business.

Mr. Williams shares a chart of the daily new members and the total number of members. Both numbers seem to be growing, but there aren’t actual numbers on the chart. We don’t know whether the total number of premium members are 10K, 100K, or 1M.

50K Weekly Writers, 80M Monthly Unique Visitors

Mr. Williams cites other stats. More than 50K writers publish at least once a week on Medium. Medium received more than 80M unique visitors in a recent 30 day period. Those are some strong numbers.

There is a critical question to be asked though.

What is the conversion rate of the 50K writers and 80M unique visitors to premium members?

I don’t know the answer to that question. I don’t think that conversion rate is high enough to sustain Medium in the long run.

Spotify’s Value Proposal

To justify the premium membership model, Mr. Williams mentions other businesses based on similar models. One of his examples is Spotify.

I’m a premium Spotify member since it became available where I live. There’s a huge difference between Spotify’s premium and free offering.

  • Ad-free
  • Unlimited skips
  • Listen offline
  • Play any track
  • High-quality audio

That difference is worth more than the 100 I pay them every year, especially considering their vast, ever-growing back catalog.

Medium Premium’s Value Proposal

I don’t see a difference that is worth $50 / year between the free and premium versions of Medium.

  • Premium posts don’t have marketing messages, not even links to email newsletters.
  • You can save stories to an offline reading list.
  • There are some commissioned stories.
  • You can listen to the audio versions of popular stories.

Medium Premium’s Competition

In the premium content space, Medium’s offering can’t compete with Kindle and Audible as far as I’m concerned.

In the free content space, Medium is the biggest competitor of its own premium membership business. In the free audio segment, there are more than enough quality podcasts.

While trying to prove his case, Mr. Williams is making some sad remarks in his post.

“There is — and probably always will be — a surplus of free content. But that’s like saying there’s a surplus of free food in the dumpster behind the alley.” Ev Williams [1]

“Will people just lower their standards? Perhaps. In fact, our standards have been gradually lowering for years. We’ll read crap on the web we wouldn’t have put up with in print.” Ev Williams [1]

Free Content Isn’t Necessarily Crap

I don’t read “free crap” on the web. The posts that I read on Medium aren’t the content equivalent of the free food in the dumpster.

I always have a Kindle book or an Audible audiobook as an alternative. I read a free Medium post, because I think I’m going to get something out of it. The cost of a Kindle book is irrelevant to me compared to the time I invest in it.

Who decides that the premium content on Medium is better than the free content on Medium? What is the decision criteria?

A Medium post is premium, because its author decided so. Outside of the no marketing rule, there are no criteria that separate a premium post from a free post, as far as I can see.

What’s the motivation to provide outstanding content on Medium?

A writer can have several motivations.

  • Spread ideas.
  • Get some exposure.
  • Build an audience.
  • Market products or services.
  • Make some money.

A paid membership website isn’t the best way to spread your ideas, get exposure, and build an audience. Marketing isn’t welcome in premium posts. Money isn’t significant either.

“In February 2018, 56% of authors who published at least one story for members earned money — making $58.45 on average for the month.” Medium Marketing Message [2]

Sure someone made $9K in a month, and a post made $1K, but those figures are possibly outliers. They probably don’t represent a reliable income. If I were that writer, I wouldn’t get a mortgage counting on that $9K monthly income.

Buy a Membership to Support Medium

You might argue that you have a Medium membership, because you want to support Medium’s cause. I acknowledge that. I donated to Wikipedia and other non-profits in the past.

I could buy a Medium membership to support it. However, that’s not the point. Medium doesn’t ask us to donate them money.

Medium is trying to sell us something as a for-profit company. There’s nothing wrong with that. I evaluate Medium as a commercial product, not as a non-profit.

Conclusion

Medium’s premium program doesn’t provide sufficient value to the consumers. It doesn’t offer enough value to the writers either.

If the subscription model can’t satisfy the primary stakeholders, how is it going to become a sustainable business?

The subscription model doesn’t convince me, but there are other business models that Medium can use. I’m going to publish a post about one of them tomorrow.

Your Turn

  • What do you think about Medium’s subscription-based business model?
  • Are you a premium member?
  • If so, what made you a premium member?
  • If not, what keeps you from becoming a premium member?
Burak Bilgin
Software developer with a Ph.D. and 15 years of experience. I write daily on personal development and life lessons. Sign up to my email newsletter to receive a weekly overview of my latest content on personal development and life lessons.