Forget Twitter, Let’s Buy Medium

by Robert Benjamin (@coopkungfu)

Medium ad

In recent months, people around the world have been calling for Twitter to sell to its users. This was sparked in large part by the reoccurring rumblings of economic instability, coupled with the realization that while a whole lot of people have come to rely on the platform as their theater for public discourse. But perhaps Twitter’s sister platform, Medium, may be the better value, better fit, and more plausible option for a user buyout.

On January 4 a small but important disturbance to ad-tech’s strangulation of quality media rippled through the internet. Medium CEO Ev Williams announced that the company would be laying off one-third of its workforce, and more importantly that it is abandoning the prevailing ad-driven media model. Williams described Medium’s renewed focus on building a value-driven monetization model and properly rewarding people who write and share ideas according to “their ability to enlighten and inform, not simply their ability to attract a few seconds of attention.” He continued:

…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. 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.

Well said, and dead on. The ad-impression model, for lack of better words, has turned the majority of content on the internet to shit. Almost every sub-par aspect of our online experience (pop-ups, tracking, data mining, and the more recently buzzed-about “fake news”) can be traced back to this caustic form of monetization. When “produces a click” and “generates user data to sell off” are the sole criteria for successful content, stories like “Cinnamon Roll Can Explodes Inside Man’s Butt During Shoplifting Incident” are not just the norm, they are inevitable.

What Williams didn’t talk about is how incredibly hard it is to buck the system in place. In addition to an entire generation of users having been weaned exclusively on “free” access and content, the over-subsidizing of ad-tech models by venture capital has stifled or killed off most other species of more sustainable and responsible media monetization. That is why Medium went chasing the ad model in the first place and why simply switching out one monetization method for another may have difficulty taking root.

Medium has yet to unveil its plan to solve the poor economics around quality content. So with that challenge in mind, I humbly offer some thoughts in hopes of helping the company in some way succeed. Though I am what Williams calls in his post an “unknown individual,” I have spent the last three years envisioning, developing, and iterating balanced ownership structures paired with alternative monetization around independent narrative media. All of which is applicable to Medium’s task ahead. Here goes.

If you’re looking for a “different-bolder” approach, don’t just change monetization methods, change your entire ownership structure as well.

For starters, the standard ownership structure for platforms like Medium (or Twitter, et al.) puts them on a trajectory in which speculative capital interests overtake majority interest in the enterprise (through a public offering or over-leveraged venture capital). The platform ends up serving those interests above all others, and it becomes impossible to serve any greater good, let alone the interests of the user community. Vibrant engagement, which is the underlying goal of any monetization restructuring, has to then be continually paid for, either by rolling out new functionality, adding on new users, or relentless marketing.

But what if the users were actual stakeholders? This would make the other goal (directly supporting high-quality media) easier, as greater trust and engagement would be built in with each user. It would also free the platform from playing the speculative stock-price game so it can concentrate exclusively on being profitable and serving its actual users.

What does a better ownership structure look like?

A good deal written about the general idea of user-owned platform cooperatives. But the specific organizational structure I have been developing (called a Balanced Ownership Platform Cooperative) was designed to preserve the strengths of a tech startup while organically increasing engagement and connection to the user base. In the model, users (creators and audience) cooperatively own the platform (majority governance and economic participation) in partnership with investor and founder owners. The structure balances the needs of each of the various classes of stakeholders, each have a unique role and benefits in the overall value generation of the platform. The overarching goal is to create an environment free from the polluting effects of ad-impression models so that a vibrant ecosystem, which supports and rewards vibrant quality media, can flourish.

How would you accomplish such an ownership change?

Easy (hah)—sell it to us (the users) and restructure as a Balanced Ownership Platform Cooperative. There is a tremendous amount of flexibility in how to do this, as long as the user-owners gain their economic participation and governance rights in the platform in the long run. It could take the form of something like a mini-IPO, except without selling securities and instead offering cooperative memberships. It might involve fully cashing out capital and sweat equity investors with a multiplier, or rolling part of that equity into the new enterprise as preferred, dividend-paying stock. It would most likely also include a phased-management plan, in which the original founders retain majority governance for a long enough period to execute on the platform’s true founding vision. The good news there is that there are now some rock-star attorneys, consultants, and strategists who have experience structuring scalable platform cooperatives.

Then, better monetization.

People think subscriptions for online print media don’t work because in the early days of the internet this was attempted, and it didn’t work then. Much of this was due to how publishers overvalued and the audience devalued digital content, paired with the splintered approach to subscriptions and the general lack of attribution and copyright control. So the ad-impression, “free content” model—by way of heavy venture capital subsidization—took hold and reshaped the internet into the horrible click bait, privacy invading, banner-ad phenomenon we see today.

Meanwhile, in the last five years, the subscription model has made a comeback in various forms of media and software, helping to make Netflix, Microsoft, Adobe, Hulu, Spotify all successes. It should be noted that each of these examples either relied on established brands or were already established brand to when introducing their subscription model. What hasn’t yet been solved is how to make a subscription model work for more independent content. Shared ownership, however, creates an opportunity to kick subscription models into high gear—rather than asking people to pay you, you’re inviting to invest in something they own.

Make the subscription cost very affordable and tiered.

By now paying directly for any content has become quite foreign to most people, so make sure the bar to entry isn’t high. At least as co-owners the would have some skin in the game, while general users would have time to realize how much they needed a community like the new Medium. Possibly a freemium option like Hulu used for a couple years would be appropriate.

Make the subscription value exceedingly clear.

This means (for audiences) grouping a hell of a lot of quality content together under one subscription. For the producers it means having the ability and access to compete for revenue. It also means having a curation-and-discovery system that continually raises quality content up so that it can be discovered. Shared ownership, also, incentivizes the company to be very transparent with its users so that they’re very aware of what is being done with their investment.

Allow for controlled and curated advertising.

With the caveat that it can not be majority of revenue and that farming out personal information is not allowed, there is no denying the value to advertisers in reaching any community of size. It would be a mistake to not capture that value and help keep subscription costs low while increasing revenue. By creating a less-than-50%-revenue rule, and doing away with both impressions based ads as well as irresponsible use of user information, many of the most corrosive elements of advertising can be mitigated.

Allow for micro-charges on popular, branded content.

A pure open-subscription model like Spotify can lead to a stratification of established brands that drowns out quality, independent voices. This is bad thing when a platform’s stated goal is to highlight new voices. A system of mirco-charges could counteract this, creating incentives for people to seek out less familiar content creators. This could be done through blockchain-style leger system or by simply bundling the micro-charges with the monthly subscriptions.

So what do you say? Are we ready to turn Medium into a Balanced Ownership Platform Co-op, and change the internet for the better?

18 thoughts on “Forget Twitter, Let’s Buy Medium

  1. William Cerf Reply

    I believe that Medium is privately held.
    Is there any thought that they might be interested in selling a stake in the firm?

    • Robert Benjamin Reply

      It is a new premise so at the moment they probably haven’t considered it as an option. Only that they are embarking on a complete re-rool of their monetization to be inline with the original founding intent of the platform. As they are privately held and it is my assumption the original founders (maybe even just Ev Williams) still owns a majority share in the businesses, initiating a sale or conversion would be doable.

  2. Mark Latham Reply

    Here’s an idea for a first step toward a co-op version of Medium: Reach out to any existing co-op whose members could benefit from funding some written content, for example coverage of their next board of directors election. Ideal would be a co-op where every member has a login, such as a credit union. We tested this at the University of British Columbia’s student union – see Experiments in Voter Funded Media: http://votermedia.org/publications/ExperimentsInVoterFundedMedia.pdf

    • Robert Benjamin Reply

      I like the idea of approaching existing established cooperatives to see if they would kick into a general cooperative that supports media creation though it seems it is more of a marketing cooperative endeavor. They could get x amount of stories for the yearly contribution that would be of value to their core business activities (hopefully more exciting than board meetings). Though not sure how much of that could transfer into generating a broad user generated written media platform like Medium.

    • Robert Benjamin Reply

      Structurally that might work but but the only way to get the Founders and the $130M in Venture capital that has been invested in the platform to take the ride would be to at least partially cash them out. Right now they are still hoping for large IPO exit.

  3. Steve Herrick Reply

    I like this idea, especially since I’ve been mulling over some similar ideas.

    One thing I’d encourage you to consider is using very open licenses for the writing, like CC-BY-SA, CC-BY, or maybe even CC0. Allowing reuse, including for commercial purposes, could actually add value to this project. Co-ops should start thinking in terms of participating in the commons, which means gradually breaking down the distinction between producer and consumer.

    • Robert Benjamin Reply

      Though not adverse to increasing the Commons, as long as fully extractive corporations dominate all the large user contributor platforms/marketplaces and seem to be benefiting more from common ecosystems, the focus (at least for me) is first and foremost taking back the levers of distribution and marketing and building systems that produce tangible value ($) around the what independent creators contribute, at least to the point where they have the ability even survive off their work. If that was accomplished I think there would be a lot more opportunity to openly share amongst other more democratically distributed organizations without out as much risk of value evaporating to the top.

      • Steve Herrick Reply

        I think using more open licenses would help you with distribution and marketing. Not just because they’re newsworthy in their own right, but because if artists reuse and remix each other’s work, that builds the reputation of both the original artist and the distributor. And if the remixer can make money on the remix, that builds something of a “supply chain” of cultural content, which will ultimately make being a small-scale producer more sustainable.

        For example, as a translator, there’s a lot of material I could be working on independently to then resell to journals or directly to the public. But, most of it is under ND and/or ND licenses. Creative Commons is marginally better than standard copyright, but it still stands in the way of “the commons” providing us with a livelihood, which was the exact purpose of the original commons. In my case, I would be much more likely to pay for a subscription to a content service if I knew that subscription could potentially pay for itself.

        That’s what I meant the other day when I tweeted that both a co-op economy and a commons economy will blur the lines between producer and consumer. When you encourage me to be one, you encourage me to be the other. That’s cooperation.

        That said, I agree that corporate cooptation, or enclosure, of the commons is a very real threat. I’m going to dedicate some time to thinking of solutions.

        • Robert Benjamin Reply

          You bring up a good point on “un-used” value that sits there sometimes due to say copyright protection. I’ts possible that something like what you talking about could just be built into the cooperative. You as a translator say would be a producer member as well and any of the writer/producers could opt in allow other producer members to translate/utilize derivative work and there would be some pre-determined split. Key is the exchange of works happens within the umbrella of the cooperative.

  4. Devin Reply

    I think https://steemit.com/ has the right model: make it easy for people to give tiny amounts of money to content creators and tie contributions to reputation.

    The way steem collaborates with their community is also admirable.

    Check it out if you haven’t yet.

    • Robert Benjamin Reply

      Yeah hearing a lot of good things about Steemit. Been meaning to dive into their a little further to understand it more. From what I understand they do have a great community voting feature that determines value with a micro contributions element. What might be missing on the economic side is a reoccurring low monthly subscription? Unless that is in there and I did’t see it. A micro contribution system alone doesn’t seem like it would generate enough revenue distribution to make ( at least complex) endeavors sustainable. I suppose the steam power investment mechanism is a way to drive in resources though I am wary of speculative financing in general and when tied to these new currency markets makes it even more suspect. Either way Steemit seems like a perfect candidate for a platform cooperative as well. The capital contribution, built in trust, and re-occuring revenue source would all be additives to what they already are building. If you know any of the founders or want to collaborate on a similar Platform Cooperative proposition for them let me know.

  5. Brendan Denovan Reply

    Hi Robert,

    Hove you reviewed the model used by the Bristol Cable? As a multi-stakeholder model, it has a lot of merit. Their business model also relies on training and education as a value proposition for members. It would be great to have a whole sub-discussion on media ownership within the platform co-ops movement.

    • Robert Benjamin Reply

      I took a look. Seems interesting. I like the multi institutional stakeholder approach they have (readers, writers, and the town). I have difficulty thinking on a one town kind of basis so always looking on how some thing could scale up to national or world level. Maybe there is some ideas in there of connecting media organizations, universities, and readers in some ways?

      • Brendan Denovan Reply

        Hi Robert,

        I think the key to ‘scaling up’ we need to imaging the local entities being in a federated relationship and sharing the platform. The strength in the co-operative sector has always relied on federating. Medium is a great shared platform that could host multi-stakeholder ‘clusters’ that are sustainable and focus on local public interest news. That doesn’t require those members see only that content, being a local paying member could access regional, national or global content curated to the users preferences.

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  7. Jaime Arredondo Reply

    Hi Robert,
    Very interesting proposal. Have you sent it to Ev Williams? Would be curious to see his take on it.

    I am also interested in the point you raised about attorneys, consultants, and strategists who have already structured scalable platform cooperatives.

    If you have some examples of these scalable platform cooperatives and their results that would be awesome 🙂

    • Robert Benjamin Reply

      Hi Jaime. As of yet it hasn’t been sent to Ev Williams or anyone at Medium directly. I don’t have that kind of access I’m afraid. Just trolling them a little on twitter in hopes it catches their attention.

      It is still early in the Platform Cooperative moment and yet to be any breakouts that have reached the kind of scale we need to prove the model. (Stocksy United being a standout that seems to be both profitable and growing as a freelancer/founder owned platform).

      The “scalable” I’m referring to is the unique Balanced Ownership Platform Cooperative organizational structure that I created a few years ago. The intent was to align the long term distributed ownership goals with the inherent need all online tech startups have, to quickly reach a level of wide user adoption and become socially and economically relevant. A large upfront capital and sweat equity investment being a key component to that ability to scale.

      As securing the large chunk of start up capital for this new model has been the limiting factor in getting the Platform Cooperative startups I’m working on off the ground I’m spending some time approaching platforms that have already reached and that would be a good fit for a reorganization. The post on Medium was part of that effort.

      Do you have any specific Platform Cooperative goals yourself?

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