Business of News

‘We had no idea that it was coming’: Medium pulls the rug from under publications

May 11, 2018
Image via Unsplash.

Chris Faraone knew something was wrong when he got a reader email the morning of May 7 asking if the Boston Institute for Nonprofit Journalism was shutting down.

Faraone, who founded  BINJ in 2015, was working on deadline for DigBoston, where he is editor and co-publisher, but he couldn’t ignore the steady trickle of concerned emails. A little after noon, he pieced it together: Medium, the platform on which BINJ published much of its work and maintained a small number of monthly donating members, had pulled the plug on its membership product, and BINJ members, notified of the changes, thought it was closing its doors.

Faraone frantically blasted out an SOS letter to BINJ members: “Medium just cancelled all BINJ memberships but we still need your help. We don’t know why. And we had no idea that it was coming.”

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BINJ, a news incubator aimed at funding investigative reporting in the greater Boston area, partnered in 2016 with Medium, the website that acts as both a publishing platform and as a publisher. BINJ relies on grants, foundational support, and individual donations, and Faraone was particularly attracted to Medium’s publisher-friendly membership program, which allowed readers to sign up to support BINJ for as little as $3 a month. The arrangement seemed almost too good to be true: Medium wouldn’t take a cut of BINJ’s proceeds, and it didn’t require BINJ to pay to use the platform. At the time BINJ launched its membership program on Medium, around two dozen publications had similar arrangements.

Less than two years later, Medium abruptly ended the offering to focus fully on its own site-wide subscription model, which it offers for $5 a month. In a statement provided by a company spokesperson, Medium’s head of partnerships Basil Enan said membership arrangements like BINJ’s were causing confusion.

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“Continuing to support this legacy program poses a cost to Medium and is confusing to users given the Medium membership program, so we have decided to discontinue the publication membership program entirely,” Enan said.

BINJ spent the week scrambling to redirect its members elsewhere. BINJ had about 80 monthly recurring members paying an average of about $7 a month through Medium, which Faraone estimated brought in more than $500 a month—funding anywhere from three to four major projects a year, he said.

At another publication, Medium’s decision to pull the plug on the membership program was even more dire. Electric Literature, a literary magazine nonprofit wooed to Medium in mid-2016, had already weathered a financial hit when Medium abruptly pivoted away from advertisements and laid off about a third of its staff in January 2017, executive director Halimah Marcus said. For Electric Literature, that meant saying goodbye to between $15,000 and $20,000 in advertising revenue.

Electric Literature stuck with Medium anyway, figuring that the membership program would be a winning prospect. As of April 2018, Electric Literature had about 450 monthly members whose subscription revenues totaled $25,000 a year. For perspective: In 2017, Electric Literature spent $33,000 paying freelancers.

Marcus said Medium gave Electric Literature a week’s notice that the membership program was ending, so Electric Literature rushed to get its members to donate to the publication through a funding page on Drip, a subscription crowdfunding service. Medium has spoken to Electric Literature staff about moving the site’s content behind Medium’s paywall for other monetization opportunities, but the nonprofit hasn’t decided whether it will.

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On Thursday, Medium insisted that publications like BINJ and Electric Literature were outliers. Of the 21 publishers who had paying members,12 were bringing in less than $100 a month on memberships, and a handful of those publications had stopped regularly posting on Medium altogether, a spokesperson said. (Citing privacy reasons, the company declined to provide a list of the publishers who were affected by the change.)

By Friday afternoon, however, Medium had issued an apology and extended an olive branch to the affected publishers.

“Recently, we notified a small group of publishers on Medium that we would be discontinuing an invitation-only beta feature called publication memberships,” Michael Sippey, Medium’s vice president of product, said in an emailed statement that Medium requested be published in full. “These memberships allowed readers to subscribe to an individual publication on Medium. We had been working with a number of these partners on alternative licensing deals to keep their income at or above the levels they were earning through this feature. However, we realize, for those that we were not working with, we gave far too short of notice for them to make alternative plans. We completely understand the frustration this caused and would like to apologize for our lack of consideration. We’re sorry.”

“To help smooth the transition,” Sippey added, “we will pay each of the affected publishers four month’s worth of any revenue they were making through this program. We’re reaching out to these publishers individually.”



THE CANCELLATION OF MEDIUM’S membership option is in some ways a natural continuation of its January 2017 pivot away from advertisements and publisher-friendly monetization options, and toward its continued investment into its own subscription business, which it launched in March 2017. Enan said as much in a statement provided through a Medium spokesperson.

“When we shifted away from an advertising-based model in 2017, supporting publisher monetization was no longer a part of our core business,” Enan said, adding that Medium stopped providing new membership options in January 2017.

This new direction is being implemented under chief executive Ev Williams, the former Twitter executive and serial digital entrepreneur who has repeatedly made the declaration that he intends to “fix the internet” with Medium. He reiterated that plan in a New York Times profile published Thursday.

Both Faraone and Marcus spoke dryly of the profile.  

“It seems to me that Ev Williams’s project is not so much about fixing the internet, but about finding the correct business model for his company,” Marcus said.

Williams’s future for Medium so far is an ad-free subscription business. Medium’s modern spin on the subscription model is the “open paywall” concept, which means publications and individual writers alike fall behind a single, site-wide paywall instead of having to implement individual paywalls on their own.This is the reasoning behind Medium’s decision to cancel the membership program that it had offered to the likes of BINJ and Electric Literature; publisher-specific membership programs were not part of the so-called “open paywall”—and they weren’t bringing in any revenue for Medium.

Medium promises individual writers the opportunity for monetization with the open paywall. Write your best stories for free and put them behind Medium’s paywall, and if subscribers click a “clap” button at the bottom of your piece, part of their $5-a-month subscription is shared proportionally with you, Medium tells interested writers. The amount of time subscribers spend reading articles also factors into how much contributors are paid. A spokesperson would not provide the number of monthly members Medium has across the platform, but said subscription revenues were growing 50 percent each quarter.

Medium employs a few editors but not does not have any writers on staff. The subscription model is being built on the work of many contributors who do not receive payment up front, as well as syndicated content and licensing deals Medium has with various publishers and on commissioned projects. (A Medium spokesperson did not respond to requests for information about such syndication and licensing deals.)

Medium encourages publishers to launch on its platform, but many publishers rely on the same monetization options as writers do. “It’s up to the publication to arrange payment details with the individual writers and contributors they work with,” Medium advises in guidelines for publishers.

Just over half of the people who published at least one paywalled story on Medium in February earned money, making an average of $58.45, Medium said in a post on its Creators page. There are a few high-paying outliers—in February, for instance, one author on Medium brought in nearly $9,500—but those are far from the norm.

For publishers who don’t have licensing deals with Medium, that means divvying up the trickle of income from Medium if they pay their writers competitive freelance rates or if they have overhead costs for operation.

A number of sites, including The Ringer, ThinkProgress, Pacific Standard, and Film School Rejects, left Medium in 2017 because they were unable to monetize their sites with advertising. Other publishers have stayed and found other ways to get revenue: The Establishment, which somewhat infamously launched on Medium the same day the site announced it would no longer support advertising, has a robust section on its Medium page giving readers various options to support its journalism.

The removal of a membership option makes the prospect of staying on Medium less appealing for places like BINJ and Electric Literature. But moving years of work over to a new site is costly and possibly cost-prohibitive for small sites with minuscule budgets. And there are quite a few small sites with minuscule budgets for whom Medium offered the opportunity for monetization, growth, and success that has since been taken away time and time again.   

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Kelsey Sutton is a media reporter whose work has appeared in Politico, Capital New York and Mic. Follow her on Twitter @kelseymsutton.