SINCE the dawn of the Internet, publishing has shifted mostly to the digital space and has experienced major setbacks – figuring out a viable business model is one of them.
As reported by Bloomberg, Twitter co-founder Ev Williams’ online publishing platform Medium has had to fire a third of its staff due to a business model that he called “broken.” According to Williams, 50 jobs have been cut primarily in Medium’s sales and business departments. Since its launch in 2012, Medium has been a bit of a darling in the content platform space having raised US$132 million in venture financing from the likes of Andreessen Horowitz.
As it relied on the same business model as other media companies used to draw revenue, namely putting ads on article pages, Williams now looks to change the model as it “served the goals of corporations” instead of readers.
“We are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day,” said Williams in a blog post. At this point, it is unclear whether Medium’s prior business model was successful or not as the company has not disclosed revenue details.
It’s fair to say that Williams is a veteran in the online publishing space, as he had helped start social media giant Twitter. Despite providing a platform for global influencers such as celebrities, politicians and business tycoons to share their views and evolving into a successful media company – Twitter has floundered in terms of developing a viable business model and has been looking for buyers.
According to Forbes, Twitter’s business model is like Medium, also “broken” due to the fact that the interests of advertisers are not aligned with its users. The gap between how content platforms can make money, what advertisers want and the user experience is widening and publishers will need to find a way to serve the interests of all parties involved if they want to build a scalable business.
The challenges faced by the likes of Medium and Twitter are felt by publishing companies all over the world, and Asian organizations are also being forced to find creative and strategic ways to stay above the fray.
Rev Asia, one of Malaysia’s leading digital media groups, recently acquired three Malay-language content portals – prior to that, it acquired two Chinese-language social news and content websites, all in an effort to stay relevant in its home market.
Another Malaysian media giant, Catcha Group, is also one of the region’s success stories in the industry. Aside from its digital and print media workings, the company has also ventured into other sectors including a recent investment in a co-working space to widen its portfolio.
In Japan, Yomiuru Shimbun Holdings, which owns the most popular daily newspaper in the world – The Yomiuri Shimbun – reported US$2.88 billion in media revenue in the first quarter of 2016. The company also owns English language daily The Japan News, alongside a 14.6 percent stake in the Nippon TV network, making it one of the most successful media companies in the world.
The media landscape appears unforgiving to those who can’t keep up, but extremely rewarding for those who can. Whether or not Twitter’s Medium can be innovative enough to keep its chin above water will be anyone’s guess.
Additional reporting by Kate Ng