How Does Medium Make Money? (Full Explanation)

Medium is a popular writing platform for up-and-coming bloggers. In this article, we will be talking about what Medium is, and how Medium makes money from readers and writers.

Medium makes money solely through its $5/month (or $50/year) subscription model. As the platform doesn’t run ads on the site, the only revenue, outside of potential external funding or investment, is made via the subscriptions paid for by readers.

Below, we’ll talk more about how Medium makes money, and provide a bit more background on how the platform works too. If you’re curious about some alternatives to Medium, be sure to stick around to the end!

What Is Medium?

Medium is a subscription-based website where readers can view stories written by other writers on the platform. Readers can choose to access the platform for free, but they’ll only be able to read 3 full stories per month. You can write for free on Medium, which makes many people wonder how Medium makes money.

Is Medium a Good Way to Make Money?

Medium is a good way to make money if you can put out regular, high-quality content. However, it takes time and effort to build up a following on Medium, and quality is always more important than quantity. 

How Does Medium work?

Medium allows anyone to start writing on Medium for free and gives writers the prospect of earning money for their writing. This is what Medium calls its Partner Program, and you can understand why it’s attractive to many freelance writers! This allows Medium to produce lots of content on a daily basis from countless different writers talking about a variety of different subjects.

People interested in Medium’s content then pay a $5/month (or $50/year) subscription fee. This gives them access to all articles on the platform. Subscribers can then “clap” for any article if they enjoyed the content. This “clap” will help that specific writer in a similar way to likes on a YouTube video. You can find out more about this in our article about claps on Medium.

The Old Claps System

Previously, when a reader clapped for an article, a portion of their subscription fee went into the writer’s pocket. Each subscriber had a limit of 50 claps per article, and this is still the case. The more claps a reader gave to different writers, the more diluted the value of their claps became.

This is because each clap corresponded to a percentage of their $5/month subscription. So, the clap of a member who only clapped once for only one article per month was a more valuable clap than that of a user who clapped 50 times for every article they read.

This didn’t mean the writer of the article got the entire subscription fee of $5 from that single clapper. The Medium algorithm – like all algorithms – was and still is complicated and largely a mystery. But it used to work something like this anyway.

Though the clap-based payment system is a thing of the past, Medium still takes claps into account when they’re recommending and ranking articles on the homepage. But let’s take a closer look at the way Medium currently pays writers.

The New Read-Time System

So, how do writers earn money now? It depends on 2 major factors: member read time and the number of reads. Whenever a paid reader reads an article on Medium, like before, a percentage of their subscription fee is paid to this writer. The more a subscriber only reads a certain writer’s articles, the more money the reader will be contributing to the writer.

But it’s important to remember that it’s member read time that counts. The number of reads won’t mean much if people are simply clicking on your headline and then bailing after the first sentence. Medium has its own methods of defining what counts as a view and what counts as a read. However, it’s the time spent reading that’s really important.

Also important is the fact that it’s only paying members’ reads that contribute to a writer’s earnings. If a non-paying member reads your story, their read time will only count if they become a member within 30 days. You can find out exactly what Medium has to say about the way they pay writers here.

How Does Medium Make Money?

Medium makes money from members that pay a $5/month (or $50/year) subscription fee. They don’t make money in any other way, such as through ads or selling products or services.

Button on asking people to sign up for a paid membership.
Medium primarily makes money through its subscription model

We know that Medium does not run any ads, nor do they sell writers’ articles, so the money they make comes from their readers’ subscription fees. But as they keep the algorithm a secret, we don’t know how much of each subscription Medium keeps – let’s call this Medium’s fee. It’s entirely reasonable for them to take a cut of every subscription, as they are providing and maintaining the platform and have salaries to pay.

The writer won’t know the number of paid readers that viewed their article nor for how long they read it. Likewise, readers won’t know how much money they contributed to any specific writer. This allows Medium to take an unknown – without knowing the algorithm – portion of all subscription fees.

How Does Medium Make Money From Writers and Readers?

Medium makes money from both writers and readers, depending on the way you look at it. As nobody knows their exact algorithm, Medium can take an unknown and possibly variable percentage from subscribers. Nobody knows whether they take a flat percentage of every subscription, or if this amount varies depending on the reading habits of the specific user.

This technically means that, while on the surface Medium is taking some of the reader’s money, they’re also taking a cut of the potential earnings of the writer. Not only that, but as more writers join the platform and create more good content, more readers will be inclined to join up. This means that Medium does generate more subscriptions as an indirect result of the quality of the writers’ collective work.

How Does Medium Stay Successful?

Medium stays successful as it provides readers with lots of content to enjoy, and it provides writers with a simple way to earn money from their writing. Medium also acts as a link between readers and writers, rather than simply the provider of a service.

Readers appear to be paying Medium for a service, but they are really paying the writers on Medium by reading their content. Both the old claps system and the new read-time system are methods of transferring money from subscriber to content creator, based on the quality of the writers’ content.

Readers are happy to pay a relatively small subscription fee to get access to thousands of articles. Writers are happy to earn money based on the quality of their writing. By providing both parties with what they want, Medium stays successful. But what are some alternatives to Medium, for those that aren’t happy with the way the platform works?

Alternatives to Medium

1. Hubpages

Hubpages’ business model is similar to that of Medium, in that readers “pay” the writers. However, Hubpages pays writers when readers view and click ads on their page. This is vastly different to the ad-free, subscription model of Medium.

For readers – It’s free to access high quality articles.

For writers – It’s free to write for Hubpages, but you must sign up for their monetization program to start getting paid for writing (through Google AdSense).

How Hubpages makes money – From ads they run and commissions they earn from affiliate partners, while a portion of ad revenue goes to writers.

Money-making potential – Generally worse than Medium, as it takes lots of views/clicks on ads to make money.

2. Wattpad

Wattpad is an extremely popular social storytelling platform, where writers (especially in the fiction genre) can create stories for readers. However, you only have the chance of getting paid after you’re invited into the Wattpad paid stories program or become a Wattpad star.

For readers – It’s free to use, and you can find thousands of great stories on Wattpad. However, you will need to cough up some cash to read Wattpad’s paid stories!

For writers – It’s free to write and expand your portfolio, but you’re only paid after joining the Wattpad paid stories program and people pay to view your story. You can also apply to become a Wattpad star and have the chance to do brand deals.

How Wattpad makes money – They run ads on the site and have brand partnerships.

Money-making potential – Quite a large potential for top writers on the platform, but it still helps average writers build their fan-base, which you can monetize externally as well.

3. LiveJournal

LiveJournal is basically a site where you can express yourself. Think of it as an online journal. You can join LiveJournal for free, whether it’s to read others’ stories, or to write your own!

For readers – It’s free to join, and you can read many posts for free on LiveJournal.

For writers – There’s a free plan and a paid plan, with the paid plan offering more advanced features. Take note that you’ll have to sign up for the paid plan to set up Google AdSense and get paid for running ads.

How LiveJournal makes money – From paid plans.

Money-making potential – Fairly limited to ads, but you can expand your fan-base and monetize it externally.

That’s How Medium Makes Money!

Medium is a great platform to use for both readers and writers. If you want access to a massive range of stories covering just about any topic you can imagine, the $5 subscription is well worth it, and you can sign up here. If you’re a writer, you can earn money from your writing with no sign-up costs! This allows Medium to make its money through a subscription model that keeps both readers and writers happy.