Medium at a Crossroads and the decline in Earnings.

I should write a FAQ on how to understand the economic model of Medium since everyone seems so befuddled. It's not that hard people.

There are basically two models for a site like Medium.

Writers Collective versus Writers Marketplace.

Writers Collective was the original model and intent of "Ev" the founder guy.

In this model, people sign up to get into the "flea market" of writers. They browse around and everything in the flea market is free to them once they pay the admissions fee.

ALL the money goes in ONE POT.

At the end of the day, MEDIUM takes the 'gate fees' and gets its cut "off the top" for running the flea market. My estimate is that's about 25% of total revenue.

Then, like a casino does, they decide what percentage they will pay out to the writers. This is something that they are completely opaque about but some inferences can be made.

Because, they will give writers 50% of the split for each subscription they get. This gives a clue to what MEDIUM's overhead and profitability numbers must look like.

The system figures out which writers got the most reading time. Then it allocates "the pot" out to all the writers based on a straightforward so much money per minute of time basis.

It's a "All for One, One for All" kind of model.

Writers Marketplace is the "New Model"

In this model, Medium is the "flea market" owners only. They "rent" you a space and the rest is up to you.

This is pretty much how SubStack works.

In this model, writers get subscribers. For each subscriber you get. You get 50% of their monthly "dues" and Medium gets 50% for running the platform. This is a pretty good deal.

It's the same split brothels in Nevada give to sex workers. -FYI

In this deal, it doesn't matter what your 'reading time' metrics are. It's ALL about subscriptions.

It's an "Everyone out for Themselves" kind of model.

Now, do you see the consequence of transitioning from the "Old Model" to the "New Model"?

Writers who have big subscriber fan bases will make BANK. But, they put next to NOTHING in the pot for the rest of the writers in "the collective".

A smaller pot means smaller 'per minute' earnings for everyone who is getting paid on that basis.

If you don't have subscribers, that's why your earnings are declining. The "big name" writers are draining money out of the pot before it gets distributed to everyone else.

There's nothing mysterious about it.