Commentary
'Medium' Offers Employee Buyouts As Business Model Shifts
- by March 25, 2021
Evan Williams, the founder-CEO of Medium, announced the buyout
plan in a videoconference and an email to employees that he re-posted to the blogging site. Siobhan O'Connor, who joined
the company as vice president of editorial in 2018, will leave amid a management reshuffling.
Williams touted the achievements of Medium's editorial team, which had
grown to 80 people by the end of last year, while also explaining some of the business difficulties with its online publications. The economics just aren't the same as for its original business of
aggregating bloggers.
“What’s worked less well is where we’ve followed the traditional editorial playbook — specifically, commissioning stories from
professional writers into publications with broad mandates," he said in the post. "When I say 'worked less well,' I don’t mean the work itself, but the equation of cost, audience and return on
investment.”
Williams started Medium in 2012 after become a billionaire with the initial public offering for social network Twitter, which he co-founded.
Medium in 2019 expanded its journalism efforts with the introduction of OneZero, which covers technology and science, and later added GEN for politics and culture, Elemental for health and
Zora for women of color. The expansion came two years after the company shifted from ad-supported content to subscriptions.
However, Web traffic for the publications wasn't
strong enough, and their readers weren't converting into paying subscribers. The company has seen consumers gravitate toward individual bloggers, rather than a publication.
“The role of publications — in the world, not just on Medium — has decreased in the modern era," William said. "I don’t mean the role of professional editorial,
but the idea of an imprimatur that establishes credibility or trust…Credibility and affinity are primarily built by people — individual voices — rather than brands.”
He said employees who agree to leave voluntarily are eligible for a lump sum equaling five month's pay, while their health insurance will be covered for six months. The status of its
publications are uncertain, with Williams saying the company plans more experimentation.
“I can see more focused, high-affinity publications working well as part of the
Medium bundle," he said, "And I can also see the editorial team being great at conceiving and executing those types of publications.”
The announcement of
employee buyouts came several weeks after workers failed to support a unionization effort. The Medium Workers
Union needed only one more vote to reach a simple majority for recognition, according to a statement on March 1.
Medium's restructuring is notable as many publishers
have worked to get their costs in line with declining ad revenue. Media buyers are shifting their spending to search and social media, making subscriptions much more vital to growth.
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