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Hello Medium! Here’s the business model to aim for

October 4, 2017 by Ashwin Leave a Comment

medium-business-model-post-image
Few months back, Medium launched their subscription model.  Though it is in the right direction of selling premium content on the platform, I see potential for a better model.

How Medium’s current model works?

  • Publishers get on board the platform
  • They publish both free and locked (premium) content
  • Locked content are available to paying members of Medium (3 free articles per month allowed)
  • Publishers get paid based on the user response (read “medium claps”) to locked articles
  • More claps lead to more revenue (~0 claps lead to ~0 revenue!)

To put it visually, here’s how it looks.

medium-current-model

The problems I see with this model…

  • Biggies like NYTimes, FT, Bloomberg etc. get on to the platform – not for claps, but for an easier or simplified subscription model
  • Readers are already sold on the brand names, they trust these brands to deliver quality content
  • Also, as a reader I pay a premium for generic content – content I don’t read or consider valuable
  • Value proposition for the publisher is vague or unsubstantial

Here’s my proposed business model for Medium…

  • Bundle the publishers
  • Create a News bundle with say NYTimes, FT, Bloomberg, Guardian etc.  Create a Tech bundle with say Wired, FastCompany etc.
  • Sell bundles to readers.  If I am looking for News content, I subscribe to the News bundle
  • I can add more bundles based on my interest, at a minimal top-up to my subscription (similar to the way how TV channel bundles work)
  • It is a “win-win” for publishers and readers
    • Readers – I pay for what I read.  I pay a fraction of what I pay to individual news providers
    • Publishers – I get a consistent revenue stream.  I offer a simplified way to on-board readers, while compromising on the profits

Again, here is the updated visual for the new model.

medium-proposed-model

As a side note, this is exactly the model that Google is trying to get into – Google makes changes to help publishers sell subscriptions.  Better to react fast!!

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Filed Under: Business, Last Five, Technology Tagged With: business, business model, medium, publishing, technology

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