Ev,
I’m rooting for you, as ever. I’m glad you’re being realistic about subscription fatigue. (I spent just two weeks looking at what it would cost me to pay my way through all the pay walls I confronted for things I actually wanted to read and it added up to $3,500.) A few points:

• The argument about the digital divide has diminished as everyone has ended up with a phone (we not longer need to specify “smart”) and access to the net. But a new digital divide rises with pay walls. Journalism and quality content could be redlined for the privileged. I heard a top editor recently talk about “trickle-down journalism” — that is top, paid sites would report things that would eventually be rewritten and distributed by everyone else. I could feel the room in which he said it shudder.
• It’s a cliché but true to say that the audience never fully paid the cost of journalism. It has always been subsidized by multiple revenue streams and still will be with new streams. This is why I work with publishers to explore commerce, events, services, and so on. I will respectfully submit that a sub-only or bundle-only model will work no better than an ad-only model.
  So I could see Medium performing other services to bring in more revenue from more sources. I long ago wrote a business plan for a service that would arrange speaking engagements for authors and others with a Patreon/Kickstarter model that would mitigate risk. (That is, we set the event only if we sell enough tickets.) In that sense, Medium could act as an agent for its writers.
  Like every media company (in their dreams), Medium could act as an agent for ancillary products: movies, shows, etc.
  I would also encourage you to look at commerce: I’d gladly buy books via a Medium →Amazon link if you add value by giving me the books that authors — individually and collectively — and readers recommend. I could also see specialized commerce in other areas (e.g., food writers → food).
• And I would urge you not to give up on advertising. Now that you’ve gotten off the crack of it, you can revisit it with quality standards set. I look at Quartz and see advertising that fits, that doesn’t offend, that delivers value. So long as you’re no long chasing attention for attention’s and volume’s sake, I think you can create limited advertising of value that adds value for you and your writers.
• I must tell you that through I have subscribed to Medium, I have not thrown my own writing behind the wall because I value the distribution more than I value the limited cash I would earn. I am sure I am not alone. Would anyone give me pennies for a Patreon campaign? I’d like to try.

Thus I’d like to see Medium continue with pay and free and experiment with multiple revenue streams to get addicted to none.