On Wednesday, Medium founder and CEO Ev Williams announced major changes to Medium’s business model in a blog post titled “Renewing Medium’s Focus.” In the post, Williams outlines the background that led to the decision to shift course in 2017. Among the changes will be cutting 50 jobs, or about one-third of the Medium team, and closing its New York and Washington, D.C. offices. More importantly, a reimagined Medium also means the elimination of its native advertising model which has provided revenue for two dozen or so publishers now in beta, says Politico.

“Obviously, this is a tough thing to do, made tougher by the immense respect and love we have for these people who have helped make Medium what it is today,” Williams wrote. “We reached this decision when Medium’s management team came together to review the last year and take a hard look at our business?-?where we are and where we’re headed. While we could continue on our current path?-?and there is a business case for doing so?-?we decided that we risk failing on our larger, original mission if we don’t make some proactive changes while we have the momentum and resources to do so.”

Williams explained that 2016 was Medium’s best year yet with readers and published posts up about 300 percent year over year. However, they’re also falling short, he said. When the company started in 2012, it set an ambitious goal of building a new kind of publishing platform – one that would be both sustainable and rewarding for content creators. This new model allowed virtually anyone to create an account and publish stories, whether they were publishers, businesses or individuals.

Last year Medium continued to evolve its business model in 2016. In April, for example, Medium announced that it would offer revenue opportunities to select publishers. Publishers who signed up for the beta test would have the opportunity to earn revenue from three different avenues:

1. Advertising through promoted stories
2. Sponsored content through native advertising
3. Subscription offerings to their readers

To support this new structure, Medium ramped up its sales and support teams, but it wasn’t ready for that step, and Medium has now decided that this new model actually contributes to an already “broken system.”

“We decided we needed to take a different?-?and bolder?-?approach to this problem. We believe people who write and share ideas should be rewarded on their ability to enlighten and inform, not simply their ability to attract a few seconds of attention. We believe there are millions of thinking people who want to deepen their understanding of the world and are dissatisfied with what they get from traditional news and their social feeds. We believe that a better system?-?one that serves people?-?is possible. In fact, it’s imperative,” said Williams.

To work toward that model, Medium is shifting its focus toward defining a new model that rewards writers and creators based on the value they provide readers. Medium did not offer specifics about its path moving forward.

Politico spoke to five publishers who are part of the beta testing and said they did not receive notice of the pending changes prior to Williams’ announcement. In fact, one learned about the change in a Recode article, says Politico.

One publisher we talked to in the summer of 2016 – Boston Institute for Nonprofit Journalism (BINJ) – was hoping to create long-term, sustainable revenue with memberships through this Medium revenue opportunity. We reached out to Chris Faraone, director of editorial for BINJ, yesterday to see what he knew about the changes. Faraone told us that Medium had not notified BINJ prior to the announcement, but they have been in touch since.

“It doesn’t seem like anything will change actually,” Faraone said. “We are meeting with them on the phone next week, but from what I understand, we still keep on trucking.”

Faraone said since BINJ started its membership program through Medium, they’ve gained nearly 80 subscribers generating approximately $400 a month in revenue which he said is “nothing to sneeze at.”

It sounds like the subscription piece will remain in place, but the advertising options and revenue shares with publishers will remain intact.

Insider Take:

It seems like Medium has a dream for what it wants to become, but it is having trouble figuring out how to get there. This is indicative of the publishing industry right now as legacy publishers straddle the divide between print and digital and are trying to determine how to maximize revenue while still providing quality content. Many are trying different business models or creating hybrids to find that sweet spot.

Medium is just the latest publisher to announce such changes. It is big news, however, because the company is relatively young and others are looking to them to pave the way with new, more viable and sustainable business models.