On Jan 4, Evan Williams, co-founder of Twitter, and founder and CEO of Medium, announced some major changes at Medium:
Our vision, when we started in 2012, was ambitious: To build a platform that defined a new model for media on the internet. (…) “The current system causes increasing amounts of misinformation…and pressure to put out more content more cheaply — depth, originality, or quality be damned. It’s unsustainable and unsatisfying for producers and consumers alike….We need a new model.”
Upon further reflection, it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.
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.
That’s great, setting aside the fact that the strategic pivot means they are firing 50 people and have upset many Medium’s publishing partners, caught by surprise by the announcement.
I would say that reactions to Ev’s announcement have been split between two contradictory feelings:
- Of respect toward Ev’s decision: Someone had to say this, and act in consequence.
- Of surprise and disbelief: Why, and why now? It is not credible that Ev had suddenly lost faith in advertising because he has realized that the ad-driven business model is dishonest and distorting. He must have known it for a long time as a major shareholder of Twitter.
There is also general scepticism about the possibility to find such a new “transformational” business model.
Wut? Five years is not enough time to think about how we should make any money in a way congruent with our founding values? That just doesn’t compute. (David Heinemeier Hansson, “Venture capital is going to murder Medium”)
too many Valley companies intent on fixing broken models think incumbent companies are using broken models because they’re idiots and not because the problems are not easily solved. (Elizabeth Spiers, “Medium and There Is Only R”)
No business model that involves selling content can get around a fundamental fact: Content can only be consistently good if its creators can make a living from it. (Leonid Bershidsky, “Why Medium Failed to Disrupt the Media”)
In fact, Ev has been completely opaque:
It is too soon to say exactly what this will look like.
And here is where the whole thing gets really interesting. Such a model must surely exist. For years I have believed (and preached) that sooner or later new business models would populate and advance the digital economy, that advertising would have played a key role in igniting it—and there were good reasons for it to play such a key role—but in the future it would not be a completely dominant role; that an economy and a society where all our “knowledge” is supported by advertising, would be unsustainable. So far this has not happened… unless we turn our eyes toward the east to see what’s happening with Chinese digital me-too’s. If we do it, we can reasonably ask: What if Google and Facebook got it all wrong? What if, after all, Google and Facebook focused on the wrong monetization strategy from a long-term perspective?
The rise of Tencent to the top as China’s most valuable tech company points to a business model that goes beyond ads: direct transactions. Tencent generates the majority of its revenue through enabling direct transactions. While here in Spain and other western countries we’ve been abducted by Facebook’s Whatsapp, nine out of ten people in urban areas in China use Tencent’s WeChat. WeChat application is revolutionising e-commerce, by integrating orders, payments, and customer care.
I do not intend to suggest that Wechat model should be a reference for Medium—or media in general. Far from it. I only want to stress that the fact that western digital economy is so reliant on advertising is not the consequence of a physical or mathematical law. There is life beyond advertising… why not for media?
The main reason ads ended up being dominant in Silicon Valley might have been simply a different starting point.
When Google and Facebook started their monetization efforts, the U.S. already had a sophisticated retail ecosystem with broadly accepted payment options and significant advertising budgets. (…) Not so much in China. The country lacked a comparable retail infrastructure, and the growing middle class didn’t have easy access to many retail options.
We should also carefully look to us ourselves as the ultimate cause of the business models we have. In a thoughtful article, Emily Parker describes her own experience with Parlio to argue why we can’t fix twitter. She realises that we usually complain about the low quality of social media conversations, about trolls, about the lack of meaningful comments, and we say that we want more civil, thoughtful dialogue. But do we really? Given the chance, we die for a flood of Twitter mentions. She sadly concludes: sometimes we get the platforms we deserve.
Nothing new: People always say they want the salad. Then they buy the cheeseburger.
Ev. Williams will need a very good cooker to cook a new Medium. Let’s hope he will not end up simply with a vegan(1) burger!