This week’s news that Medium is laying off 50 employees and closing its offices in Washington, D.C. and New York came as a surprise to the stable of news organizations that signed up to use the site as its publisher.
The prospects for Medium, which was sold to publishers as a high-end alternative to traditional web advertising, now look less rosy as the company backpedals from what CEO Ev Williams called a “broken system (of) ad-driven media.”
On a Google Hangout Thursday, Medium told publishers that it was discontinuing its “Promoted Stories” program, the company’s native advertising offering, said Neil Miller, the founder of pop culture site Film School Rejects. For Miller, that means he has until May to find another business model.
“From there, they don’t have any answers as to how we’ll be able to make enough money to pay our teams,” Miller said. “That’s all up in the air. Which leaves me four months to figure it out.”
It’s possible that Film School Rejects could forge a new strategy — Miller says the news isn’t “entirely apocalyptic.” They’ve been able to sell sponsorships, and the site has had “moderate” success with memberships.
“To be honest, I can’t afford, nor would my heart hold up for, a move back to a private server and WordPress,” Miller said. “So, barring a miracle, my site will live and die on Medium. I’m optimistic that I’ll find some sort of solution and be able to remain on Medium.”
Other publishers are rosier. Sunil Rajaraman, the CEO of the Bold Italic, said that his team is sticking with Medium because of it’s content management system. The Bold Italic makes most of its revenue from ads its team sells directly, so it’s not impacted by the change very much.
“One of the main considerations we made when switching to Medium was how easy it was process-wise to use their CMS, and we love it,” Rajaraman said.
Ben Wolford, the founder of online social justice magazine Latterly, is also sticking with Medium. Latterly wasn’t part of Medium’s ad program — they didn’t have the traffic to justify it — so the change doesn’t affect them.
“In some ways, I was actually encouraged by Ev’s post because of his commitment to finding a new model,” Wolford said. “For small indie publications, ads were never the answer, and even if we scale I don’t want to be tied to that model. I’d much rather Latterly keep making money the way we do now: memberships and quarterly print sales.”
Ultimately, Medium’s decision was a reflection of the current trajectory of advertising on the internet, said Rick Edmonds, Poynter’s media business analyst. Directly sold and programmatic ads are becoming less tenable in light of Facebook and Google’s continued rise.
The alternative? Convince readers to pay for journalism.
“As Evan Williams’ memo says, relying on ads looks less appealing from a revenue standpoint all the time — and fouls the classy environment they have been creating,” Edmonds said. “So it is time to change course and go for more reader revenue, though I take Williams at his word that how to do that will take more work.”
Or, as media thinker Jay Rosen put it:
Every day the evidence grows: ad-supported publishing is a trap, traffic a mirage, sustainability a hard cruel road. https://t.co/LFAaKL4RUr
— Jay Rosen (@jayrosen_nyu) January 5, 2017
Correction: A previous version of this story called Medium’s native advertising product “sponsored stories.” It’s actually called “promoted stories.”
