Publishers Should Own and Control Their Platform

Sep 30, 2019

Article ImageEvery publisher needs a platform. If they don’t control that platform, they are at the mercy of platform owners whose behavior is shaped by incentives that may not align with the needs of publishers.

Outsourcing is a smart strategy for many business operations. Manufacturing businesses outsource office cleaning to cleaning companies. Technology businesses outsource app development to third-party developers. These outsourcing decisions are backed by sound reasoning. Businesses should focus on their core competence, paying third-parties for necessary services that aren’t the business’s primary value generator. No organization is the best at everything and third-parties may be more efficient or less expensive.

The logic of outsourcing is not always relevant though. When a business depends on a platform and the platform's operators' interests don’t align with its users, outsourcing is a mistake. Publisher platforms are a paradigmatic example.

Web publishing businesses depend on their platform to build and engage an audience. But publishing platforms rely on venture capital or the support of a big company. They act in the interest of the backer or owner, and not in the interest of their users. Sometimes the interests of platform and users align, and sometimes they don’t. The platform owner has the final word.

Let’s be clear; publishing platforms may be created with the best of intentions by founders who are passionate about publishing and driven to help creators. But market realities intrude, reshaping the platform’s mission and disrupting the relationship between platform and publisher.

Anyone who watches web publishing closely will recognize the pattern. A platform is founded with bold ambitions to improve publishing workflows or promote the best content. For a while, all is well, but, eventually, the platform begins to chip away at the experience that attracted publishers. Pressure from investors, the media, or social factors influence the platform to change in ways that hurt publishers, who are forced to find another platform or build their own.

Posterous was a blogging platform. Founded in 2008, Posterous made it easy for everyone to publish on the web and to syndicate content to other platforms. In 2012, Posterous was acquired by Twitter and the following year it was shut down. Posterous’s founders were full of good intentions, but running a publishing platform is expensive. With no route to a sustainable business model, the founders had no choice but to sell to a bigger platform that needed engineers but had no use for a blogging platform. This narrative has been repeated many times.

Google+ was launched in 2013. A social network with publishing features, Google+ was backed by one of the largest internet companies in the world. Google invested hundreds of millions of dollars into Google+ and integrated it into other services, including YouTube and search. Prominent writers like Mike Elgan went all-in on Google+, using it as their primary publishing and promotional platform. 

On April 2, 2019, Google+ was closed down in the wake of security fiascos and low engagement. Platforms are hard to get right, and most fail, even when backed by the deep pockets of a company like Google.

Facebook is the biggest social media network in the world with over 2 billion monthly active users. It is deeply integrated into the lives of people around the world, who rely on it for news, communications, and to organize their social and business lives. Publishers have invested hugely into optimizing for Facebook, often at the expense of building their own platforms. Publishing business like Upworthy grew almost entirely as a result of Facebook referrals.

In 2018, Facebook changed its news feed algorithms. Instead of surfacing publisher content, Facebook now prioritizes user-generated content. Overnight, Facebook-dependent publishers experienced a catastrophic decline in traffic and advertising revenue. As TechCrunch’s Micheal Rucker put it in an article titled How Publishers Will Survive Facebook’s Newsfeed Change: “Publishers will buckle down on their owned-and-operated properties and ensure that they are creating the best user experience on the destinations they can actually control.”

Which brings us to perhaps the most interesting platform vs. publisher story of recent years: Medium. Since 2012, Medium has been one of the most attractive publishing experiences on the web. Its team is passionately committed to creating a space for content creators and publishers to flourish, but, as we have already said, building a platform is expensive. Medium is VC-backed with more than $100 million of investors' money.

To generate a return for investors — it has never made a profit — Medium has morphed through several monetization schemes, including advertising and paywalls. Medium attracted major publishers with promises of advertising revenue and support. It was once the home of The Awl, ThinkProgress, Film School Rejects, Hairpin, and The Billfold. But, every time the business model changed, publishers lost out and moved to a platform they owned and controlled.

One of the most baffling developments was the removal of custom domains. Publishers were lured to Medium by the promise of a managed CMS with a beautiful design that allowed them to publish under a domain they owned. Control of a domain is essential to publishers. It is their online brand, and it allows them to move between platforms without giving up control of their identity. Without a custom domain, publishers are entirely dependent on Medium, and many moved off the platform to reassert control over their destiny.

Entrepreneur and developer David Heinemeier Hansson diagnosed the cause of Medium’s problems in 2017: “Medium rigged that VC bomb and is failing to disarm. And just like most other VC bombs, it too will explode and take with it the prospect of a lovely, smaller, important typewriter business.”

Hacker Noon is an interesting example. A developer-focused publisher built on Medium, Hacker Noon now finds itself at odds with the platform. Hacker Noon was supported by third-party sponsorships. It displayed sponsor advertising on article pages. At the end of last year, Medium banned all third-party advertising and replaced Hacker Noon’s advertising with Medium ads.

Cut off from its source of revenue, Hacker Noon launched a crowd-funding campaign to support a move to an owned publishing platform. But it ran into difficulties: who controls the content that Hacker Noon had edited and published? Medium does. Hacker Noon writers were Medium users, and Hacker Noon nothing more than a collection of Medium articles.

Ev Williams, Medium’s founder and a co-founder of Twitter, once said “The idea won’t be to start a website. That will be dead. The individual website won’t matter. The Internet is not going to be about billions of people going to millions of websites. It will be about getting it from centralized websites.”

That sentiment should be terrifying to publishers because it means handing control of their business and content to a platform with incentives that are radically different from those of individual publishers.

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