Medium drops ad-based business model from publishing platform

Dive Brief:

  • Medium founder and CEO Evan Williams has majorly downsized the publishing platform, laying off one-third of Medium staff and closing offices in New York and Washington, D.C., according to Business Insider. Williams is known by many for co-founding Twitter.
  • The staff reductions came in the sales and business departments rather than affecting the site's engineering and product teams.
  • Medium seemed to stray from its original mission of creating a new online media model when it rolled out native ads and sponsored posts last fall. Williams’ move to downsize is a step back from the short-lived ad-driven model, and he wrote in a post that “[i]t’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people.”

Dive Insight:

With the Medium downsizing, it's clear that it isn't only traditional publishers who are struggling with how to make money online. While more content consumption is shifting to connected devices, readers are adopting ad blockers or otherwise trying to avoid the ads that have always underwritten the business of publishing in the past. Startups like Medium as well as big media companies are all experimenting with new business models but there have been very few success stories so far. 

The setback at Medium raises the possibility that native advertising — which has been gaining steam with publishers — may not be the panacea that some have hoped it would be. A recent report that some native ad renewal rates are low further supports this idea. 

Medium has become a popular publishing platform for individuals and brands, and even powers some websites such as The Ringer. However, its struggles with earning revenue and creating value with online content suggests that finding the right formula for online publishing may remain elusive in 2017. According to Williams, the new business model for Medium is currently uncertain and it could take a long time before that model is determined.

Filed Under: Corporate News
Top image credit: Medium