DO THE MATH
Medium Just Told Us What Their Minimum Cut Is
Medium introduced their optional price tier yesterday. I signed up immediately, as did many of the people I read regularly. Why?
I WANT to pay the people I read — maybe like you — — more money.
I want more people to come here to write; I want the people I enjoy —perhaps you again — to stay here; I want Medium to succeed.
Also, I often want to share great posts — possibly some of yours, by the way — with friends who do not have Medium. The authors will get paid for those views! Again, I like doing that for my friends when writers post something my friends may find interesting, and with this, I’ll be helping writers too.
So that’s why I signed up.
However, I have read some posts by people who do not want this. That’s fine: some people can’t afford it. Some people could afford it, but don’t think Medium offers enough value to be worth more than the base tier.
That I honestly do not understand. Five dollars for a month’s worth of entertainment and education? That’s cheap, cheap, cheap. But to each his own, so if that’s your opinion, fine.
I have also read some posts that have taken this announcement to rail against Medium’s lack of transparency, saying things like “Medium hasn’t explained what their take of the extra money is!”
But they did. Or at least they have told us something important about how much of the base $5 membership goes to authors. It’s simple math: if an extra $10 gives writers four times what they get now, three times has to come from the extra money.
So what’s the least they could be taking now? If they take nothing from the extra $10 for the company, then $10 is three times what they give authors now. So, the most they could be sharing now is $3.33 (rounded off).
They might be sharing less, of course. But it can’t be more, assuming the 4x more claim is accurate. To say it another way, Medium cannot be sharing more than $3.33 of the $5 fees.
They may or may not be taking some part of the extra money from the Friend tier. If they are taking…