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?

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