For Medium, the most sensible monetization policies would probably be:
- microtransactions from readers to authors (where Medium takes a cut whenever anybody wants to cash out, & otherwise holds cash in escrow). (This is essentially what Adsense, Mechanical Turk, and Second Life did.)
- pay for privacy (a variation on freemium used by github, wherein normal use is free but paid accounts can whitelist or blacklist posts to specific audiences — making it possible to treat medium like a private forum)
Users of Medium can already use something like patreon, but Medium could potentially benefit from integrating something like SPP (an ancestor of patreon) and taking a cut. In SPP, a work is created but only released to the public when a certain threshhold of funding/donation is passed; since Medium is a publishing platform, they are in a unique position to hold a piece of writing in escrow until the threshhold is passed. (I like SPP in concept, but of all the variations I cover in my overview piece, it’s the only one that hasn’t really been properly implemented, and the idea may be a little too alien to most users.)
Medium already uses a freemium model to some extent, with publications having greater control of color and layout. This by itself won’t keep them afloat, though. I think if they kept publications as their freemium model & added microtransaction support (maybe even just as an author option in the licensing menu), they could do significantly better than they would with advertising.
If full support for microtransactions is too scary for them (since it would require casual users to put money into the system), another possibility is to integrate submission payment into Medium itself. Some publications pay for submissions, but perform draft submission & editing via Medium itself; the only portion of the process that’s done outside of Medium is the payment. (I’ve been paid for submissions and had a ~4 month wait between publication and payment because of overseas wire transfers.) If publications are already paying into Medium, giving users all an account balance & building support for basic publication agreements into Medium itself would actually streamline the process enough that Medium could justify taking cuts comparable to what PayPal takes. (And, while Medium holds on to all that borrowed money they can keep the interest that accumulates.) Doing this might be a first step toward supporting microtransactions on a larger scale.