Pando

The most no brainer move of 2017: Medium should buy Patreon

By Sarah Lacy , written on January 5, 2017

From The Disruption Desk

Yesterday, Evan Williams of Medium made a hard announcement, based on a hard choice: He is laying off one-third of the company and admitting in hindsight they made a wrong turn last year when they doubled down on outside content powered by an ad-driven model.

Like a lot of folks in the media, we’ve taken issue with Medium’s strategy at times, at times marveled at what exactly the strategy is. We’ve argued that being a platform and a content provider are simply two different things, requiring very different DNAs in leaders.

Still, I was not one of the journalists joining in the grave dancing frey yesterday. I respect someone like Williams who has made more money than he can ever spend for not walking away or selling this off once it didn’t work. It’s clear his heart is in his original vision, which he rearticulated in his post thusly:

To build a platform that defined a new model for media on the internet. The problem, as we saw it, was that the incentives driving the creation and spread of content were not serving the people consuming it or creating it — or society as a whole. As I wrote at the time, “The current system causes increasing amounts of misinformation…and pressure to put out more content more cheaply — depth, originality, or quality be damned. It’s unsustainable and unsatisfying for producers and consumers alike….We need a new model.”

He continued:

Upon further reflection, 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. 

Seriously, any journalist hating on that message is just kind of a dick.

A reminder of what Paul wrote on Monday:

If you’re a work-a-day news reporter, working for an ad driven publication, this is going to be a horrible year. Ghastly and depressing. Real arsenic-in-the-tea stuff. The 2016 election was the final nail in the coffin for any outlet whose success was predicated on the notion that the wider population is looking for unbiased, deeply-reported facts…

...But even so 2017 is going to be depressing as journalists realize just how little anyone cares about facts any more. And if readers don't care, advertisers certainly won't.

So who in the journalism business will have a good year?

In short, anyone who figures out how to channel the American public’s bubbling anger -- on both sides of the political aisle -- into direct action…

...If Pando were still ad driven, we’d be fucked. Re/Code sits in an odd mushy middle, although it benefits from a wealthy parent and a lucrative conference business.

Which brings me to the last un-fucked category of media companies in 2017: Any one for which readers have proved they’re willing to pay a monthly or annual subscription, or shell out for costly conference tickets. The New York Times and Vanity Fair and the New Yorker are going to have a great year, espeically as Trump continues to attack them by name. As will Teen Vogue by the way. In the tech world, the Information (again) and Pando should keep our heads above water as will any number of niche outlets for which there is an eager audience with a few bucks a month to spare. This will be the biggest year yet for subscription businesses. Conference businesses will have to work harder because suddenly everyone will have a conference.

There just aren’t a ton of options to do great work and get paid for it right now. And, as Paul wrote, it’s worse in a post-Trump world, where no one seems to care about facts. And your legal liability is likely higher in a post-Peter Thiel/post-Trump world. And Facebook and Google are swallowing basically all the gains in online ad revenue while abandoning any responsibility they have (or depending on your point of view, don’t have) in making sure truth wins out.

What was already bad has only gotten worse the longer Medium has existed for journalists who want to do intelligent, investigative, long form or insightful work.

Let’s stop being dicks for a moment-- and I say this as someone Evan Williams told to “fuck off” the last time I wrote about Medium-- and acknowledge that great journalists should be nodding not sneering at Williams’ note.

That doesn’t make the problem any easier to solve. We too have grappled with these same problems, totally changing our business model a year and a half ago. And we pulled it off. We survived! But on a very small scale and not without cutting costs -- and salaries-- dramatically in the process. We survived because of NSFWCORP’s novel approach to unlocks and the technology it built that Pando acquired back in 2013 in part, but out of stubbornness and mission mostly. We also survived because we were lucky enough to build a loyal following and brand back in our ad-supported free days.

Applying any of those lessons is pretty much a non-starter on the scale of Medium. I do not envy Williams. I barely pulled it off here.

But there does seem one obvious, quick, and easy thing that Medium should do right this very second: Buy Patreon. Williams says he does not want to continue to build on an ad driven framework. And he says he wants to make sure writers get rewarded by the millions of people who want to read intelligent content based on writing great content.

He is talking about subscriptions, and arguably, micro-subscriptions scaled up and distributed in a way that they add up to meaningful money.

Why build this when you can buy it, buy a community of creators, and buy the expertise of how these campaigns work right now in Patreon?

The idea of readers paying authors or artists small amounts of on going money directly for doing great work has been floated by a lot of startups. I’ve usually been a skeptic of it. The challenge in subscriptions is convincing anyone to go right now, enter a credit card and pay you anything; not just how much you charge them. As a creator, I would have never even tried something like Patreon if I hadn’t seen the enormous success that John Dolan, aka the War Nerd, had with it.

Dolan is extraordinarily talented. He writes about wars and history with a lyrical grace and depth of knowledge and even humor that I’d argue, absolutely no one else in the world can. There are thousands and thousands of people who adore Dolan. They will pay any subscription amount if they can get Dolan regularly. Pando benefitted from this greatly. But increasingly, those folks weren’t that interested in our other content.

So Paul encouraged Dolan to spin out into a War Nerd Patreon, where his fans could just give him all their money directly, cutting us out. Dolan now makes more than $14,000 a month on Patreon-- more than we were paying him monthly as a freelancer. And I’d imagine all of his supporters are far happier, the bulk aren’t paying more than they were subscribing to Pando, they are getting more War Nerd content, and every cent goes to Dolan.

Paul and I have spun out our own side projects too: Paul did a weekly election podcast, and has just pivoted into a “Come to Satan” watch on the tech industry cozying up to the new Trump Administration, and I’ve been doing a weekly podcast about badass moms building companies. My podcast recently passed $2,400 a show, or nearly $5,000 a month if everyone rebills. (The public facing number is lower, because Patreon knows from experience many will not. Another sign of how well they know the specific challenges to the “pledge” system.) That money goes to support my book research, the recent Web site I’ve built out for the show, and other projects around the topic. But in terms of revenue, it’s not much less than I get paid for my work at Pando every month, and one podcast a week is far less work.

Patrons who care only about this topic are able to pay me as little as $1 a show-- far less than a Pando subscription. And larger companies that support the show pay at most $500 a month for the largest shout outs and ad placements. That’s one-tenth the cheapest sponsorship/ad purchase you can make on Pando. It’s a way smaller audience, and it’s an even more niche audience. But if you want to reach them, it’s an amazing bargain. If you want to be part of the community as it grows, $1/show is also an amazing bargain. And as the creator-- even one that has two kids to support in a city as expensive as San Francisco-- it’s well worth my time for what it all adds up to.

To my astonishment, Patreon works. And in my tiny sample set, it has worked in each of the projects that Pando -- or ex-Pando folks-- have attempted across really different demographics. The one thing in common is people who want to pay experienced journalists for non-click-bait work.

Exactly what Medium says it wants to do on a large scale. Patreon has learned a lot about how lots of different artists and writers have done this well, and Medium could get all that day one instead of another few years of trying to figure it out.

Likewise, Patreon could get a lot out of a deal like this. Patreon’s mobile site is an abomination, and its app isn’t much better. Medium employs some of the smartest people in the industry to solve those problems. There are other ways I wish Patreon could help its creators more too.

For instance, I have no idea if Patreon alerts Patrons if their credit cards are frequently failing. I’ve told Patrons before that they were no longer getting charged, and they’ve seemed shocked. Frequently it’s an honest mistake-- an obsolete work credit card after changing jobs or something like that-- that they are happy to correct, but it puts the creator in a bad spot to be the one to have to ping the Patron and ask if they still wanted to support them. Inside a bigger company incentivized to help make thousands of creators money, I think a lot of this could be improved.

Likewise, Medium has a huge audience, and I’m sure they have a trove of data on that audience. There was little Patreon could do to support my podcast, for instance, because a lot of their largest creators seem to be gamers and very male-oriented communities. But Medium likely has a large community of creators and readers in every vertical. Encouraging creators to support one another, perhaps in exchange for more placement could re-create the link sharing and blogrolls we saw in the early days of blogging.

I recently built a Wordpress site for my blog, because I wanted to do more design wise and content wise than a Patreon page could allow. Once again, a natural fit with Medium.

There are plenty of ways Medium could help Patreon.

Of course, I hesitate to even suggest this because Patreon has been such an amazing find for me, and so many other creators. Many of us rely on Patreon to help pay our bills and support projects we’re passionate about. My podcast on motherhood and entrepreneurship is my favorite content I produce all week, in part, because it’s so uplifting and so inspiring in a year that’s been anything but.

The worst thing would be for Medium to buy it, integrate it and decide in a year that that approach doesn’t work either. More acquisitions like these die rather than succeed. So I don’t know how much I’m selfishly rooting for this to happen. But if I’m a Medium shareholder, it’s an absolute no brainer.