Blogging is not a particularly new form of media, originating in the 90s and going through transformations as the world wide web evolved. Blogging provided a means for people to share their opinions, stories, and expertise with the broader world. It evolved to support businesses with their lead generation through various methods (such as their own blogs, influencers, and traditional ad space), but it never offered individual writers a way to capture much of the value they created by putting in the time to create and share their stories with the broader world.
Sure, you could monetize by including ads in your blog, along with some other methods, but it wasn’t easy to build a living as a writer based solely on your voice unless you joined a publication with a larger brand presence that you aligned with. Individual writers were usually either part of a larger editorial voice or stuck within their small niche.
This is now changing, and we are seeing it unfold alongside the rapid rise of some similar, but very different blogging platforms over the last 5 years.
Medium’s Rise and Strategic Shifts
Medium is a “social journalism” platform, launched in 2012 by Twitter co-founder Evan Williams, initially aiming to make it as easy as possible to write and publish a story without having to set up your own blog.
In their early years, they focused heavily on optimizing for time spent reading on-site, as opposed to unique visitors and their audience size. This resulted in a platform that had a user experience well optimized for article discovery and reading.
They saw significant growth over the next few years – in 2016, they had 7.5 million posts published and 60 million readers using the platform. With such a large reader base, Medium offered bloggers huge reach by syndicating their stories, making it a very compelling platform for anyone looking to publish, as Sam Mallikarjunan summarized in this great article:
Medium is doing for content publishing what transactional marketplaces have historically done for retailers, subsidizing the acquisition of an audience.
Sam Mallikarjunan – Why Medium Works
He also captured the thinking behind Medium’s editorial strategy that would come into focus in 2018-19 – Similar to Netflix and Amazon, they could develop their own media creation strategy based on the insights they gain from the platform:
In addition to feature development, by owning a central platform on which media publishers create content, Medium could use the millions of writers creating content to guide their own media creation strategy.
Sam Mallikarjunan – Why Medium Works
But before we get to their content strategy, Medium had another pivotal strategic decision to make in 2017 – they had to figure out monetization. Up to this point, Medium had experimented with advertising as a way for publishers to get paid. However, they realized that this would not lead to a transformative model that could disrupt the attention economy, and instead just lead to incremental improvements on the traditional ad-based model. So Medium pivoted, first announcing that they would no longer be focusing on advertising revenue as a means of monetization, and in 2017 they launched a subscription feature with certain content behind paywalls. The essence of this would be that writers could choose which of their pieces would fall behind Medium’s paywall, and readers could pay a monthly fee to access any articles on Medium that were behind it (after they reached their quota of free articles). The writers would get a share of that subscription revenue, calculated from an evolving formula based on criteria like how long people spent reading it, and the “Claps” it received.
Medium is rolling out a membership program that will cost $5 a month (for now) and sounds like a little bit Spotify, a little bit Patreon, and a little bit Pocket.
NeimanLab – “Media is broken,” so Medium’s launching a $5/month member program that offers small upgrades
By doing this, they would be supporting the writers who crafted higher quality content. As Ev Williams summarized, they would be supporting:
Those who maximize our understanding of the world but don’t necessarily maximize clicks — and, therefore, are at a disadvantage amongst the highly optimized algorithm chum being slung by the truckload by low-cost content purveyors.
Ev Williams – Upgrade Your Medium
While they lost some larger publications as a result of this (some still preferred to rely on ad-based revenue), this strategy seemed to work. By 2019, Medium had about 400,000 paid subscribers and the number was continuing to grow (eventually hitting 725,000 subscribers in 2021).
While they were getting validation that this monetization model could work, Medium was still trying to figure out its content strategy. Going back to the example of Netflix, they knew they could use readership insights to develop their own publications. And in 2018, they started investing in their editorial team, hiring experienced writers and editors to launch high-end digital publications. They doubled down on this in 2019, but the economics for that didn’t quite work. And earlier this year, Medium announced that they would be shifting their focus to supporting independent writers and cutting in-house editorial operations. We could dig into why their editorial strategy didn’t work, one take was that they relied too much on organic discovery and did not like to pay for search advertising, which could have improved their top-funnel for these larger investments. Perhaps developing a long tail of independent writers, could drive better organic discovery?
As they were still figuring this out, another strategic shift was working well for them – they were shifting towards a more relational media strategy. They were shifting their experience from enabling a more transactional type of media consumption towards a relational style. As an example, their home experience was more focused on the writers you followed, and less on their discovery algorithm and the biggest headlines. These types of changes would enable writers to build trust and grow relationships with their readers.
However, as we’ve evolved, we haven’t done as good of a job helping those thinkers, writers, and experts who do publish more regularly, which was the intention, as well. Our distribution mechanisms became more transactional and less relational over time. More concretely, while you can build followers on Medium, our algorithms have played a bigger role in what gets distributed. As a result, readers have been less likely to follow writers because it doesn’t have a huge effect.
Going back to our new app [….] This means you’re more likely to read the authors you like much more consistently and develop deeper relationships. As a writer, you’ll be writing to people who care what you have to say (and much less dependent on headlines).
Ev Williams – Towards a more relational Medium
This relational shift is interesting because it also mirrored another growing trend in the blogging world – the paid email newsletter.
The Rise of Newsletter Monetization – Stratechery, Substack & Revue
Email newsletters aren’t a particularly new or novel means of blogging, but the ability to monetize your newsletter wasn’t something that was considered feasible for most writers.
However there would soon be successful examples of this, the most prominent use case was not from a tech company but an independent writer. Ben Thompson started the tech blog Stratechery in 2013, and by moving his posts behind a paywall around 2014 through a freemium subscription model, he was able to support this as a full-time job (and a well-paying one!).
Applying some rudimentary math, I estimate that Thompson will pull in revenues of $3,285,351 for the calendar year 2020. Congratulations!
Ben Thompson’s Stratechery should have crossed $3 Million in Profits in 2020 –
Andreas Stegmann
Some claim he pioneered this paid newsletter business model and was the inspiration behind Substack – a newsletter subscription platform. Substack was founded in 2017, allowing writers to easily start their own newsletter and monetize it using their tools.
Getting a thousand people to pay for your work is really hard. Having to have technical skills — that easily scale to multiple authors — unrelated to what you produce is an unnecessary barrier.
Ben Thompson on Substack – Vox
By 2021, Substack had more than 500,000 paying subscribers, with top writers on the platform earning over $15 million / year through their publication subscriptions. The growth of this platform and the new revenue model for writers was not going unnoticed, with Twitter acquiring Substack competitor Revue in 2021. Revue is a similar newsletter platform founded in 2015, that launched its subscriptions feature in 2018.
With these rapidly growing platforms – one thing is clear, their monetization models also came out of the same need that Medium was solving for. They were trying to disrupt the attention economy by giving writers another means of monetization, and thus gain more independence in their writing.
Now, it’s clear that the Substack model, based on subscriptions instead of advertising, is working. Writers are gaining the independence they need to do their best work. Readers are finding writing that has been crafted for them and not for an economy based on engagement-based algorithms.
Investing in Writers – Substack
There’s No Winning Model – Solving for Different User Needs
One might ask which model is better – the Medium style publication platform or the newsletter platforms. But that would be missing the point. While both are trying to achieve the similar goal of disrupting the traditional ad-based monetization model for publications, they are achieving this by solving for different user needs.
Going back to Medium’s strategy I described earlier, they were optimizing heavily for the reader experience, trying to increase time reading and enabling discovery for other content of interest. By doing this, they were able to gather an audience that could expand the reach of writers. With Substack and Revue, they were optimizing for the writer experience, providing the tools to easily publish your newsletter and monetize it.
Not to say either platform neglected the other end-user, but it usually shows which one was the primary focus. One could use the Shopify vs Amazon example here – they both improved the eCommerce experience by solving for a different user need. Amazon heavily optimized for the customer through their marketplace, while Shopify made it increasingly easy for businesses to launch their own eCommerce platforms.
Ben Thompson touched on the differences between Shopify and Amazon – and one similarity you can see here is what the writer (business) can get out of these platforms. With Medium (Amazon), you can optimize your content to get discovered on their “marketplace” hence increasing your reach. There is less pressure on differentiation since you can rely on the Medium brand to a certain extent. However this likely comes at a cost – as your monetization is at the mercy of their revenue distribution formula (which seems very similar to the Spotify model, and we know artists aren’t particularly thrilled with that). With Substack and Revue (Shopify), you have to differentiate and rely on your brand to succeed, which can come at a higher chance of failure, but increased reward with the direction subscription revenue (minus their fixed fees).
When I look at these options, I suspect newer and less prolific writers may prefer Medium to increase the audience for their publications, while more established publications may prefer to monetize their brand and voice through the newsletter platforms.
Your Take Rate is My opportunity – Competition heats up
In a great Twitter thread, Chris Dixon described the opportunity for web 3.0 startups to eat into the margins of web 2.0 incumbents, and was especially prevalent in the social media platforms that had 100% take-up rates, not sharing any revenue with content creators.
While the definition of web 3.0 is broad, and these players may not strictly fit that definition – the opportunity here is similar. These new monetization models are opening up opportunities for platforms to eat into each other’s margins by returning more value to the content creators. You can already see this when you compare Substack and Revue’s similar products and their pricing – excluding payment processing fees, Substack is charging 10% of subscription revenue, while Revues charging 5%
All this to say, it is going to get increasingly competitive, and it’s still too early to call the winners.
Blogging 3.0 – Disrupting the ad-based attention economy
When you read about the foundational ideas behind the likes of these platforms – there’s a common theme here:
…Substack, was working in opposition to the ad-driven attention economy, attempting to change the rules of engagement for online discourse
Substack on the Letter Acquisition
We need a system that funds stories and ideas not just based on their ability to attract attention, but on their value to readers.
Ev Williams – Upgrade your Medium
With different monetization models from the ad-based one that previously dominated the attention economy – they are giving writers increased freedom and independence, to pursue their own voice and create great long-form content, that’s not solely driven by getting more clicks and views. It marks a shift from an ad-based attention economy to a patronage-based model (similar to Patreon), that rewards creators for telling their story, and doesn’t rely on getting more eyeballs. This is what I feel defines this next phase of blogging, let’s call it blogging 3.0:
- 1.0 – When blogging first started, the intentions were closer to personal diaries. They captured the writer’s ongoing reflections with no strict business purposes.
- 2.0 – There was a shift as blogging could support business needs and allowed some value capture for brands through lead generation, as well as the bloggers (turned influencers or advertisers).
- 3.0 – Blogging platforms evolved their capabilities to support new monetization models, allowing writers to pursue their own voice and supporting independent writing careers, without having to be a part of a larger publication.
I see a similar evolution happening in other media as well (e.g. youtube content creators that have no ads but are supported by their Patreons), and I feel this would be a great topic for a follow-up post. I am intrigued to see what other forms of value capture could disrupt this new paradigm, and excited to see what happens not just in blogging, but all forms of content creation.
Ajith Thilakan 