A business model for Medium (and the rest of online content)
Medium CEO Ev Williams posted that he’ll be pivoting the company toward a mysterious new business model:
[W]e 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. And toward building a transformational product for curious humans who want to get smarter about the world every day. It is too soon to say exactly what this will look like.
This is a hard problem. Luckily, I’ve solved it for him (and the whole world of online content), as you can see below.
Chat log for new Medium product
HM: Hi, I’m Happy, the AI content butler for medium.
Josh, a user: Hi. Happy Medium. That’s sort of cute.
HM: It’s not polite to make fun of someone’s name.
J: Sorry. So, Happy, what can you do for me?
HM: Let’s just have a chat, and then I can get you exactly the content you want, without interruptive and irrelevant ads, make you smarter, and save you time.
J: Sounds great.
HM: Let’s start with this. Tell me what you’re looking for from the articles and content you read.
J: I want to get smarter. I want the clearest, most immediate news, from sources I can trust. I want balance. And I want to smile once in a while.
HM: I bet we can help you out. And just to be clear, I can find lots of content, not just what’s on Medium. Now, you said you want news sources you can trust. Who do you trust?
J: The New York Times, The Boston Globe, The Wall Street Journal, The Washington Post.
HM: Those are all newspapers. Do you want to go beyond newspapers?
J: Yes. But no fake news.
HM: OK. How about if I focus on news that other users like you have rated as accurate, and avoid sources that fact-checkers say are inaccurate?
J: Sounds awesome.
HM: You want blogs with that?
J: Sure, I’ll look at blogs, but make that no more than 15% of what you give me.
HM: Can do. Now let’s talk topics. From what you read on Medium, it seems like you’re interested in US Politics. Anything else?
J: US politics is great. You can mix in a little international, too. I’m also interested in business news, technology, social media, and the media industry in general.
HM: OK, I can do that. That’s all serious stuff. Anything on the lighter side? Hobbies, maybe?
J: Sure. I like to know about new science fiction stuff on TV, like Black Mirror. I like bicycling and world travel.
HM: How about funny stuff? Satire?
J: Sure, but no more than 10%, OK?
HM: OK. And remember, I see what your Twitter friends are reading, too, so I can use that, too.
HM: Now let’s talk format. Do you like long articles or short ones?
J: A few long articles mixed in is great, especially if they’re the ones other people said were good.
HM: OK. How ’bout video?
J: Yeah, but I prefer to read, mostly.
HM. So, we’ll make sure it’s mostly text with a few videos. Podcasts?
HM: No podcasts. OK. Now let’s talk about how you’re going to pay for this. Because it costs money to create and curate all this content, and we need a business model.
J: I hate irrelevant ads.
HM: Like I said, no irrelevant ads. We can get rid of all the ads, if you want.
J: That would be awesome.
HM: If we do that, you’ll have to pay me $20 a month. I’ll keep some of that, and I’ll share some with the people supplying the articles, in exchange for letting you read them ad-free.
J: That’s pretty steep.
HM: You can also pay $10 a month for a few ads, or you can get the same mix for free.
J: I like free.
HM: Well, of course, if you pick free, then I have to slip some advertising into the mix. But here’s the thing: it will only be good advertising.
J: How is that possible?
HM: Well, I know a lot about you, and every time you read something I learn more. I also know about your friends. So I know what kind of ads you’ll like. Based on what you told me, seems like travel ads, bicycle ads, local ads from Boston, and science fiction movies and TV might interest you, and ads from some quality content providers. I’ll make sure you only see stuff that interests you, and if you don’t like it, you can just click to tell me and I’ll be smarter next time.
J: I’m curious: how does this work for the advertisers?
HM: A thoughtful questions. Advertisers will pay a lot more for people who are reasonably interested in their products. The way advertising works now is dumb — it’s lots of random, untargeted, annoying ads plus cookie-driven ads for stuff you already saw. But I’m an A.I. I can be a lot smarter than that. I know what you might be interested in — I’m learning more all the time — so I can bring you ads you’re more likely go for. The advertisers with those products love people who are primed and ready to engage, so they pay a lot more for that. And that way everybody wins.
J: Wow, that’s much smarter. But I still don’t like ads, and I don’t want to pay a lot.
HM: How’s this. We’ll start you off at the $10 level, but I’ll make the first month free. You’ll see what some of the ads are like. At the end of the month, you can pay $20 for completely ad-free, leave it as it is and keeping paying $10, or go for the free option with the smart ads included. Remember, if you choose to go free, you’ll see the ads on the content providers’ sites as well, since they need to get paid.
J: Sounds like a good deal. So, how do I start?
HM: Put the Medium app on your phone; just check it out when you’ve got a spare moment in the day (it’s more useful than Facebook!). And add the Happy Medium extension on your browser, so I can get smarter about who you are and what you like. I’ll bring you the content you want in a daily email or notifications on your phone, or if you don’t like those options, just ask for something different.
J: Thanks. I can’t wait to get started, Happy. This looks like the start of a beautiful friendship.
Saving us from ourselves?
Any content distribution system based on clicks is a mess. We click on clickbait. We read, not what we want, but what impulse drives us to. We click on stupid ads by accident or because they fool us. Quality isn’t immediately obvious in what we click, content or advertising, so we can’t tell the difference. Any click-based system — as Facebook is now — perverts the media world into a dark and dreary chaos even as it undermines legitimate content providers.
Quality content needs a model. That model must be based on not what people click, but what their higher brain functions want. An A.I. can figure that out, especially with a little explicit feedback from the reader. And that’s worth paying for.
Ev Williams said he wanted Medium to be a venue for quality content. This is natural brand extension for him. But it doesn’t have to be Medium. Google could do this and put it on your browser and your phone, especially if it’s an Android. Apple could do it. Amazon could do it, because it knows what you buy. And I hope all of them turn their A.I.’s to this problem, because a robust competition in A.I. driven content butlers will serve all of us.
It’s not going to be free. Advertisers deserve a place in this world, too. But there’s no reason that the content distribution system has to be as dumb and ignorant as it now is. We can do better than this.
An ambition post. I’d add it to my Happy Medium whitelist 🙂
Happy Medium would lose me. I am not willing to pay for ad free. Heck, I am not even willing to pay for the NYT because I know that I can avoid the paywall by going into private mode. Medium was explicitly set up as a space for people to create and consume content not just without interruption, but also without the perverting influence that financial incentives wreak on content, and especially user generated content. (keywords, slideshows, etc.) Without that it is just another CMS Blogger/Typepad/Tumblr/Wordpress.com/Associated Content. While YouTube made this transition, it wasn’t just because of network effects. Hosting and streaming massive amounts of video is hard and expensive. As for “AI” that feels to me like Jon Hagel’s late 90’s buzzword “infomediary”, i.e. let us track you and sell your privacy which has sort of happened anyway.
Medium, to my mind, should emulate Craigslist — a platform with very limited revenue aspirations and very few employees that makes money on a very small area of content where some kind of commerce naturally happens. The world needs that. Honestly, that is what I think they were trying to do at the beginning, and lost their way. PS. The new HBS book, The Content Trap is kind of interesting and covers some of this.
Great piece, as always. Two comments about your post:
1) The idea of an interview format for a service like Happy Medium that wants to get to know you. The rising chatbot phenomenon is a good one for a lot of experiences, especially ones that involve getting fairly easy responses from someone that are more easily fetched via conversation than by forcing the user to navigate a set of menus looking for boxes to check. Of course not too far from now the interview won’t even be necessary. All of the things you suggest HM will ask are things it can intuit by just observing behavior. Which leads to a bigger point that coincides with your final note about Google and Amazon: Google almost does this already on Google Now. I use it often to quickly see how topics I am following are progressing. Only in the Google Now world (as it would be with Amazon) there’s no need to explicitly ask for money as both of these players will subsidize as Amazon has done with Amazon Video and Google does with YouTube.
2) Medium could never pull this off precisely because it doesn’t have the life-spanning relationship that Google and Amazon have. But if the company really wants to try, it should emphasize its ability to match not only topics with readers, but personalities and biases with readers. In other words, you read Atlantic because you are aligned with the biases of the writers (whether you know it — or acknowledge it — or not). But Medium’s writers are all over the map (though mostly left-leaning). A smart Medium platform would lean into the content a bit, using AI to identify which content aspects appeal to you as an individual. You seem to like personal narratives? You tend to read things that suggest a firm moral framework? Those subtler dimensions are the ones that would allow the company to direct you to content that is going to resonate with you on a level that FB links never can. Then, over time, Medium would offer to let you know what it’s learning about you and help you benchmark yourself against other people — then it would ask you if you want it to broaden your experience horizons and recommend specific types of content you should consider reading with an eye to expanding your thinking.
Your analysis suggests that Medium could be more valuable as part of Google or Amazon.
Maybe that is what they are looking for!