A New Model For Online Publishing

Earlier this month, the CEO of Medium, Ev Williams, announced that his company would be making some major changes. Specifically, Medium was laying off 1/3 of it’s staff, mainly those who were focused on sales, advertising and business operations.

Williams noted that Medium’s readership grew by around 300%, from 2015 to 2016, as did the number of posts published . Yet, he also observed that when Medium was founded (in 2012), he and his team were striving to create a “new model for media on the Internet.”

More specifically, at the time, Williams believed that “the incentives driving the creation and spread of content were not serving the people consuming it or creating it — or society as a whole.” Williams goes on to state that writers should be “rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.”

Williams felt that Medium has not (yet) succeeded in this effort. He hopes to create a new revenue model, to reward Medium’s writers, and more effectively serve his company’s readership. Williams’ announcement arrives at a pivotal moment for online publishing.

As Paolo Gaudiano explained in a piece in Media Post last year, ad-based publishing is a “three party model.” Readers want engaging content, while advertisers desire “access to readers,” and publishers (an umbrella term, which includes writers) seek to sustain and grow their businesses. Guadiano argues that when media platforms are supported mainly through advertising, a publisher’s primary goal is to draw readers, leading to a situation where “content is to serve as bait, which lowers quality.”

In this situation, clever use of social media, and ad technology, can prove more useful than informative, thoughtful writing. Also, since an advertiser’s main goal is to draw traffic, quality of content means little. Who suffers in all of this? Readers, who suffer through the proliferation of tiresome advertising, and,an abundance of weak content.

Advertiser-supported publishing also faces another major challenge: Let’s call it the Google & Facebook Problem. From the first six months of 2015, to the first half of 2016, total digital advertising spending in the United States rose by over 19%, from $27.5 billion, to $32.8 billion. During that same period, Google’s ad revenues rose by 60% (to $17.4 billion), and Facebook’s intake increased by 43% (to $5.7 billion), while spending on all other web platforms decreased by 3%.

Clearly, advertisers see Google and Facebook as the optimal platforms to reach prospective customers, leaving others trailing in the dust. In this environment, fewer and fewer online content producers, will find (only) advertising revenues, to be a viable business model.

So, what’s to be done? Is it impossible to produce quality pieces online, while rewarding those who dedicate their time to their craft? Or, is there a better way forward?

First, let’s get something out of the way: People will have to pay for at least some of the stories which they find relevant. As mentioned, there just enough advertising dollars floating out there, to allow every worthwhile online platform, to rely purely on external funds. The phrase “You get what you pay for” has rarely been more applicable, than in the present context.

Still, there are some glaring issues with current subscription models, where we pay a monthly fee, to gain access to every story offered by a publication. One of the biggest challenges, is that few readers are likely to find every story, to be of personal interest.

Suppose you sign up for a New York Times online subscription, but are only really into domestic politics, followed by movies, music and the arts. For you, the value of the Dealbook page, or the Real Estate section, is rather limited. Yet, insightful articles about politics in the Washington Post, Medium, or the Wall Street Journal, might be very compelling, as would pieces on gallery openings in The New Yorker, or a Variety writeup, of a film screened at Sundance.

Many of us are looking for particular types of story, wherever they are found. In other words, we are somewhat publisher-agnostic. With this consideration in mind, what if we develop a cross-platform subscription model, where one pays a flat subscription fee, in exchange for access to a certain number of articles, across a range of publications? Let’s return to our earlier example.

Under this new approach, you would pay a fixed fee, say, $15 per month, and could read up to 50 articles, on your favorite topics. It wouldn’t matter whether a story appeared in the New York Times, Medium, Buzzfeed, or elsewhere, as long as a particular publication participates in the service.

Each user’s overall experience will be improved, as he or she can focus on more of what is personally most appealing, regardless of publication. This elevated level of customer satisfaction, will increase the public’s willingness to sign up for subscriptions, increasing the overall financial health of online publishers, and leading to continued creation of satisfying writing.

What’s more, problems of publisher, reader, and advertiser incentives being misaligned, will be largely resolved, as publishers are no longer so dependent on outside dollars, to make ends meet. They can focus more on crafting stories which their audience are interested in, rather than simply angling for clicks on inane headlines, or read minimally relevant articles.

Of course, let’s remember that old adage “In theory, there is no difference between theory and practice. In practice there is.” Making this model a reality, presents some unique challenges.

One of the biggest obstacles, is the nature of online media entities. While many of them might see the writing on the wall, major organizational changes take time, and often require considerable persuasion, especially with publications that are publicly held, or owned by larger corporations. Getting decision makers and owners/investors, to buy in, will be critical for the success of the aforementioned efforts.

Additionally, not all platforms are similar, either in terms of audience, or writers/journalists. The New York Times has been in print in for over 180 years (and online for 2+ decades) and likely has a somewhat different readership, than a website like Medium. What’s more, the Times is largely staffed by professional journalists, each of whom commands a salary, while Medium offers a more mixed group, with many creators for whom writing is not a primary source of income.

Given these differences, there are clear obstacles to the New York Times entering into a shared reading agreement with Medium. While the numbers can be made to work, this will require openness, creativity, and a lack of ego, on the part of all involved. Still, there are clear incentives for cooperation: The economics of media are changing, and those who don’t acknowledge these new realities, whether upstart websites or longtime print publications, will face serious challenges.

The good news is, something has to change. As mentioned, advertising dollars for websites not named Google or Facebook are shrinking, a trend which will continue. Yet, in a positive sign, the public has shown an increasing willingness to pay for what at least some of what they read, as evidenced by rising subscription numbers at major newspapers, and at some magazines as well.

Broader trends, in the world at large, bode well for those who produce effective content online. We are living through what military leaders describe as VUCA — conditions of volatility, uncertainty, complexity, ambiguity. Science and technology is reshaping society at a rapid pace, while a new sort of nationalist leadership, is gaining power, in disparate nations across the globe. People are looking to writers, thinkers and journalists, to help illuminate and interpret these events.

Here in the United States, early indications are that the new administration and the press, will have an adversarial relationship, at a time when the country is heavily divided in it’s opinion of the new president. As Jack Shafer, Politico’s senior business correspondent, noted, this will make for aggressive investigative reporting, which will help in “making journalism great again.” If the post-election jump in subscriptions at the New York Times and Washington Post is any indication, plenty of Americans agree with Shafer.

As citizen of nations across the globe, seek out incisive, hard-hitting writing, there’s an excellent opportunity for those who are great at their craft, to build a stronger readership, and grow their revenues in the process. However, achieving such success, will require a deeper understanding of how today’s reader actually engages with what he or she reads online. Ev Williams, as leader of one of the most powerful publishing platforms around today, is in a unique position to lead this transformation. Let’s see what he and his peers are able to accomplish.