When Billionaire Ev Williams founded Medium.com in 2012, he thought it would help him fulfill his self-appointed mission to “fix” the Internet that, as a founder of Twitter, he helped break.
That goal appears as elusive as ever.
Williams talked a good game, declaring when Medium launched that “our goal is to help people pay attention to the most valuable stuff first and to have the best ideas win.” Medium offered publishers a one-stop-shop, including website hosting, publishing software and native advertising, which are sponsored posts that blend with content more seamlessly than traditional banner ads.
Given Williams’ background, small media companies — such as former ESPN broadcaster Bill Simmons’ pop culture/sports company The Ringer — signed up. Investors also were intrigued. According to Crunchbase, Medium has raised $132 million in funding from venture capitalists, including Spark Capital and Andreessen Horowitz.
“Ev Williams is the LeBron James of online publishing,” Forbes Contributor Theo Marks wrote in an August 2017 post.“He doesn’t always have the best teammates, but he can bring a championship anywhere. If someone that impactful starts an online publishing platform, you don’t ask questions. You wire the money and pray he figures out a way to monetize it.”
But Medium has fallen short of expectations for generating revenue, and Williams’ frequent changes have also raised doubts about the company’s promise. Investors pouring money into the venture seems unlikely. A spokesperson for Medium declined to comment.
In 2017, Williams overhauled the business, scrapping plans to accept advertising and instead relying solely on subscription revenue. As a result, Medium cut 50 employees, roughly one-third of its staff, and shuttered its offices in New York and Washington, D.C.
A Broken Model
Writing in a post on the site at the time, Williams argued that Medium’s model wasn’t “the right solution to the big question of driving payment for quality content.” He described ad-supported content as a “broken system” being pushed by corporations that “doesn’t serve people.” He launched a paywall charging readers $50 a year to fund the site’s content.
Not surprisingly, The Ringer struck a deal with rival Vox Media because it had counted on Medium to help generate ad sales. It was one of “countless pivots” that Williams has undertaken since founding the company, according to Laura Hazard Owen of Harvard University’s Nieman Journalism Lab.
“But Medium has also done a number of not-so-great things,” Hazard Owen wrote in a post earlier this year. “It’s sometimes been called a `YouTube for text,’ but unlike YouTube, there are no Medium-native stars.
“Rather, the company has typically hired and promoted the work of editors and writers who were already well known. Many of them were able to head back to legacy publications or other ventures when their Medium publications folded; people whose careers weren’t as established, or who were starting publications on Medium from scratch, often haven’t been so lucky.”
Earlier this year, Medium launched four new publications covering science and technology, business, health, and general interest. The company, which reportedly spent $2 million on content in the first seven months of 2018, also is looking to partner with third parties to develop content for its site. Its previous attempt at launching “editorial brands” ended in sales and spin-offs, according to DigiDay.
“We are dramatically increasing our spend on original content this year,” said Medium Vice President of Editorial Siobhan O’Connor told DigiDay, declining to provide specifics. “We think doing so under distinct publication brands is a good way to make this investment. There are already thousands of publications with their own brands on Medium, so this is a structure that our readers understand.”
Popular With Industry Leaders
To be sure, Medium continues to publish engaging content and is often the platform of choice for public announcements for many industry leaders.
Jeff Bezos, the founder of Amazon.com, last year used the site to publicize his claims that the former owner of the National Enquirer threatened to expose his extra-marital affair unless he agreed to make false statements. Medium also published well-received stories about sexual-harassment allegations against celebrity chef Mario Batali and gave American student Amanda Knox a platform for her story of being jailed in Italy for a murder she didn’t commit.
Media reports indicate that Williams has invested some of his own money into Medium, though it’s unclear how much. Some of Williams’ fellow billionaires, including Bezos, who also owns the Washington Post, speak of their publishing assets as they were a public trust rather than a profit-making enterprise. It appears that Williams has a similar mindset, which may explain the company’s investments in original content despite losing money.
Even under the most optimistic scenarios, Medium faces an uncertain future.
According to DigiDay, Medium aims to have one million subscribers by 2020. If all of them paid the yearly $50 subscription rate, the company would garner about $50 million in revenue. That would make Medium a minnow in a media ocean of sharks.
Medium has fallen short of its goal to disrupt the online publishing world. Whether its fortunes change dramatically is hard to say. Private equity investors are increasingly leery of media investments. Consider the owners of Vice Media and BuzzFeed, who are reportedly unhappy with their properties’ poor financial performance.
It seems likely that Medium will rely on its owner’s fortune for support for some time to come.