10 ms·

reddit gold, one year later (spoiler: the naysayers were wrong)

140 points by raldi 15y ago

ohashi 15y ago
I was hoping for some numbers. Glad it worked well though and the timing was fantastic :)
- raldi 15y ago
  And I wish I had permission to share them. :) I will point out a quote from the original reddit gold announcement: "Conde Nast allocates resources proportional to revenue."
  - redthrowaway 15y ago
    How do you still have access to said numbers?
    - raldi 15y ago
      I was at reddit through March, which included the time when the big hiring wave was approved.
      - redthrowaway 15y ago
        Ah, so you just remember the fairly recent numbers. I thought from your comments here and in the linked post that you had access to current numbers, which would have been fairly odd. Carry on.
braindead_in 15y ago
Inspiring. "It won't work" should be on the checklist for every entrepreneur.
- sorbus 15y ago
  People claiming that something won't work is not a good heuristic for finding things that will work. It may be the case that people say that many ideas that turn out to work won't, but they are overshadowed by all of the ideas that people say won't work that don't.
  - alinajaf 15y ago
    Agreed. I would add that, given you've found other ways to validate your idea, nothing inspires you quite as much to deliver as the opportunity to prove a naysayer wrong :P
  - raldi 15y ago
    True: People also said the CueCat wouldn't work. So sometimes the naysayers do know what they're taking about.
    - malnourish 15y ago
      Perhaps I'm missing something, but that seems to have resurfaced (in a sense) with QR codes.
      - mooism2 15y ago
        The big objections to CueCat, as I remember them, were that people would never install the hardware (and if they tried they'd need tech support), and that dragging adverts over to the desktop computer would be too much hassle. QR code readers are a software (not hardware) install, and they install onto your phone (not PC), which is quite naturally close at hand when your reading off paper. I'm not saying QR codes will proceed to establish themselves long-term. I am saying that if they don't, that will tell us more about the potential ecosystem for this sort of thing than CueCat's failure did, simply because major usability frictions inherent to the earlier technology are now out of the equation.
rospaya 15y ago
The Digg implosion is the worst thing that happened to reddit, as a community.
- redthrowaway 15y ago
  I don't feel that way at all. As reddit grew, the desires of the masses changed. I'm no longer interested by the majority of it, but that doesn't mean it's bad. In fact, millions of people seem to believe the opposite. I don't use reddit anymore because I found it to be an unproductive use of my time, but that doesn't mean it's bad. Youtube, for all of the stupidity of its comments, has nonetheless grown a fairly tight community of people who interact with each other through videos. Wikipedia, for all its politicking and acrimony, has a very tight community of core contributors. Reddit's community isn't the same as it used to be, true. It's much larger and much broader in appeal. Sure, that means I'm not as enamoured of it as I once was, but it's hardly a death knell. In every measurable way, reddit is doing better than it ever has.
  - coderdude 15y ago
    >>As reddit grew, the desires of the masses changed. I think that's what the issue is here. For people who have been part of a community for a long time it is painful to see this migration away from the core values you once thought the community stood for. In my opinion, "the desires of the masses changed" is just another way of saying that the community got hijacked by a wave of new users who didn't value what the entrenched users valued. This is, I think at least in a way, similar to a show jumping the shark.
  - raldi 15y ago
    "Reddit is turning into Digg." -redditor, 2005 http://www.reddit.com/r/reddit.com/comments/17913/reddit_now_supports_comments/c228 http://www.reddit.com/r/reddit.com/comments/17913/reddit_now...
    - redthrowaway 15y ago
      Is it still Digg they're on about? I thought the complaint now was that reddit was turning into 4chan? HN is turning into reddit, reddit is turning into 4chan... Shall we take bets on how long it will be until people start bitching about G+ turning into facebook? I think this is just a necessary byproduct of our need to find patterns in events and relate current experiences to past ones. Rather than saying, "the dynamic on this site is changing from something familiar to something new", we always feel the need to compare it to some past experience. Thus, techies are always looking for "the next microsoft", calling g+ "the next facebook", looking for the next Netscape Moment, and so on. It seems to be a very deeply-ingrained need for us to cast entities and experiences as being reminiscent of those we've had before. I'm sure this is an instinct that is usually very beneficial, but boy howdy does it ever cause an inordinate amount of kvetching on the tubes.
greendestiny 15y ago
I think it says a lot of bad things about online advertising that a completely voluntary subscription program that gives you essentially nothing beats it as a revenue source. Although that's just a guess, the success of reddit gold might be increase in revenue without having to serve more traffic.
- speckledjim 15y ago
  It says nothing about online advertising. Reddit is pretty much the worst website to try and advertise to. The community is extremely anti-advertising, anti-capitalism anti-big-companies, etc etc. Coupled with that I don't think the demographic is one that spends big money. They're not shopping for holidays or cars, they're mainly wasting time. Your comment has been upvoted to the top (I believe) because unfortunately that same culture of anti-advertising spills over to HN. Remember. Google made $9bn last quarter, mostly from online advertising. A massive amount of that (about half?) went to 3rd party websites. There's money in this game... All this post says is "Donations are successful for some value of 'success'". If it was really all that successful, I don't think all the employees would have left.
  - davidw 15y ago
    What you say about reddit is true, but that doesn't necessarily meant that online advertising works, either. I've never earned more than a pittance from any of the ads on my sites.
    - speckledjim 15y ago
      Then respectfully, you're doing it wrong. There's unfortunately a lot of people who believe all you need to do is slap ads on any website and watch the money come in. It actually takes time, effort, learning, and to some extent skill to know what will work and what won't work. You either need targeted users with intent, or you need more users. Saying you can't make money from online advertising is like a non-programmer saying you can't write a tetris game. They're saying that because they haven't learnt to program yet and so it seems impossible to them. > that doesn't necessarily meant that online advertising works, either. The fact that Google paid out $4bn or whatever last quarter to 3rd party websites surely shows that online advertising works.
c1sc0 15y ago
What I liked most about the Reddit Gold program was how it shows the strength of the community: if you can pull off a 'freemium' move without actually developing significant extra features you're clearly doing something right.
acangiano 15y ago
One point that hasn't been made is that part of Reddit Gold's success is due to the fun way in which it is presented. Reddit Gold members are jokingly considered to be an ultra high-brow, elite group that hangs out in a lounge with their monocles, top hats, Bentleys, and yachts. It's a playful inside joke that makes people want to be in it, even if the actual features of a premium subscription are negligible. It's also common to have people give each others gold subscriptions in response to kind acts or as a reward for particularly insightful comments. There are lessons to be learned for those implementing the freemium business model, for sure, although I completely disagree with people who claimed that this is an indication that advertising doesn't work. Selling products or services often beats advertising (revenue wise), but there is plenty of money to be made with ads. (I speak firsthand, as I've always done well with ads.)
- ghurlman 15y ago
  Sounds an awful lot like the TotalFark model (and userbase attitude) that's been around for years... probably a lot of crossover there as well.
  - kn0thing 15y ago
    Definitely. I'd been chatting with Drew about lessons learned from TotalFark for quite some time before Gold.
    - raldi 15y ago
      Props to the guy I'm replying to, for cultivating a community that was receptive to crazy ideas like this.
  - _delirium 15y ago
    SomethingAwful has had something like that since the early 2000s as well, with some things being purely status, like paying an extra $10 to get a bigger avatar image. Also introduced as a (successful) solution to their previous lack of success monetizing via ads. (I believe, at least for a while, you could also change someone else's avatar for something like $20 or $30, and they could pay some similar amount to insure it against changes.)
cypherpunks 15y ago
I read reddit, but I would never buy a gold account. The site has too much hate speech, and it is hard to support that financially. Between the misogyny and the atheist anti-Christian bigotry, it's pretty bad. You don't have to be either a woman or a theist to see that's wrong. The question of how to address this issue while maintaining free speech is a more complex one. The reddit founders, however, have shown no interest in finding ways to improve site quality from this perspective, and indeed, appear to support the bigotry. Anyway, I bear a huge grudge against the site because they banned my account for sockpuppeting and harassment, so take all of the above with a grain of salt.
- naner 15y ago
  The site has too much hate speech, and it is hard to support that financially. Between the misogyny and the atheist anti-Christian bigotry, it's pretty bad. You don't have to be either a woman or a theist to see that's wrong. The site doesn't promote hate speech, it allows free speech. Also I think you're overstating things. The question of how to address this issue while maintaining free speech is a more complex one. Free speech and censorship are mutually exclusive. Reddit already has mechanisms to allow community censorship (report posts, post deletion by moderators, banning, invite-only subreddits, etc.), but paid reddit employees only step in when things get out of hand. Also the community is very fickle. Any perceived censorship by reddit employees that seems suspect and they get out the pitchforks. This has happened a few times (e.g. the Sears incident). I do think the front page could be better filtered, though. Right now the default reddit front page is pretty... weird.
  - Terretta 15y ago
    To make it less weird, run something (e.g. RES) to filter out all posts linking to imgur. You'll be amazed at the difference.
    - SkyMarshal 15y ago
      RES, for anyone not in the know: http://reddit.honestbleeps.com/ http://reddit.honestbleeps.com/
tokenadult 15y ago
The real bottom-line question for Conde Nast, the company that bought out Reddit, is when does the earnings stream from Reddit begin to pay back the investment used to buy Reddit at a reasonable rate of return? I have seen NO reporting at all that refers to actual numbers and "shows the work" to demonstrate that Reddit was anything other than a losing investment for the company that bought Reddit. If anyone reading this has a link to a thorough analysis of how Reddit contributes to Conde Nast's financials, in light of the large up-front (and now sunk) cost of acquiring Reddit, I would be glad to give it a careful reading, financial calculator in hand.
- scorpion032 15y ago
  If a computer programmer buys a large real estate and says he hasn't got any return out of it, by not building anything, does it suggest real estate inherently is bad? It takes commitment, knowledge and a careful execution to see a site that gets over a billion page views every month, to monetize. For that, let's start with not pissing off the people who work on it, first. If conde has already paid a large sum to acquire a property, how much more, percentage terms, would it really cost to add a few more servers, a few more developers, ad-ops? If you can't pay for gas, you should think about it, even before you buy a car.

140 points by raldi 15y ago

ohashi 15y ago

I was hoping for some numbers. Glad it worked well though and the timing was fantastic :)

raldi 15y ago
And I wish I had permission to share them. :) I will point out a quote from the original reddit gold announcement: "Conde Nast allocates resources proportional to revenue."
- redthrowaway 15y ago
  How do you still have access to said numbers?
  - raldi 15y ago
    I was at reddit through March, which included the time when the big hiring wave was approved.
    - redthrowaway 15y ago
      Ah, so you just remember the fairly recent numbers. I thought from your comments here and in the linked post that you had access to current numbers, which would have been fairly odd. Carry on.

braindead_in 15y ago

Inspiring. "It won't work" should be on the checklist for every entrepreneur.

sorbus 15y ago
People claiming that something won't work is not a good heuristic for finding things that will work. It may be the case that people say that many ideas that turn out to work won't, but they are overshadowed by all of the ideas that people say won't work that don't.
- alinajaf 15y ago
  Agreed. I would add that, given you've found other ways to validate your idea, nothing inspires you quite as much to deliver as the opportunity to prove a naysayer wrong :P
- raldi 15y ago
  True: People also said the CueCat wouldn't work. So sometimes the naysayers do know what they're taking about.
  - malnourish 15y ago
    Perhaps I'm missing something, but that seems to have resurfaced (in a sense) with QR codes.
    - mooism2 15y ago
      The big objections to CueCat, as I remember them, were that people would never install the hardware (and if they tried they'd need tech support), and that dragging adverts over to the desktop computer would be too much hassle. QR code readers are a software (not hardware) install, and they install onto your phone (not PC), which is quite naturally close at hand when your reading off paper. I'm not saying QR codes will proceed to establish themselves long-term. I am saying that if they don't, that will tell us more about the potential ecosystem for this sort of thing than CueCat's failure did, simply because major usability frictions inherent to the earlier technology are now out of the equation.

rospaya 15y ago

The Digg implosion is the worst thing that happened to reddit, as a community.

redthrowaway 15y ago
I don't feel that way at all. As reddit grew, the desires of the masses changed. I'm no longer interested by the majority of it, but that doesn't mean it's bad. In fact, millions of people seem to believe the opposite. I don't use reddit anymore because I found it to be an unproductive use of my time, but that doesn't mean it's bad. Youtube, for all of the stupidity of its comments, has nonetheless grown a fairly tight community of people who interact with each other through videos. Wikipedia, for all its politicking and acrimony, has a very tight community of core contributors. Reddit's community isn't the same as it used to be, true. It's much larger and much broader in appeal. Sure, that means I'm not as enamoured of it as I once was, but it's hardly a death knell. In every measurable way, reddit is doing better than it ever has.
- coderdude 15y ago
  >>As reddit grew, the desires of the masses changed. I think that's what the issue is here. For people who have been part of a community for a long time it is painful to see this migration away from the core values you once thought the community stood for. In my opinion, "the desires of the masses changed" is just another way of saying that the community got hijacked by a wave of new users who didn't value what the entrenched users valued. This is, I think at least in a way, similar to a show jumping the shark.
- raldi 15y ago
  "Reddit is turning into Digg." -redditor, 2005 http://www.reddit.com/r/reddit.com/comments/17913/reddit_now_supports_comments/c228 http://www.reddit.com/r/reddit.com/comments/17913/reddit_now...
  - redthrowaway 15y ago
    Is it still Digg they're on about? I thought the complaint now was that reddit was turning into 4chan? HN is turning into reddit, reddit is turning into 4chan... Shall we take bets on how long it will be until people start bitching about G+ turning into facebook? I think this is just a necessary byproduct of our need to find patterns in events and relate current experiences to past ones. Rather than saying, "the dynamic on this site is changing from something familiar to something new", we always feel the need to compare it to some past experience. Thus, techies are always looking for "the next microsoft", calling g+ "the next facebook", looking for the next Netscape Moment, and so on. It seems to be a very deeply-ingrained need for us to cast entities and experiences as being reminiscent of those we've had before. I'm sure this is an instinct that is usually very beneficial, but boy howdy does it ever cause an inordinate amount of kvetching on the tubes.

greendestiny 15y ago

I think it says a lot of bad things about online advertising that a completely voluntary subscription program that gives you essentially nothing beats it as a revenue source. Although that's just a guess, the success of reddit gold might be increase in revenue without having to serve more traffic.

speckledjim 15y ago
It says nothing about online advertising. Reddit is pretty much the worst website to try and advertise to. The community is extremely anti-advertising, anti-capitalism anti-big-companies, etc etc. Coupled with that I don't think the demographic is one that spends big money. They're not shopping for holidays or cars, they're mainly wasting time. Your comment has been upvoted to the top (I believe) because unfortunately that same culture of anti-advertising spills over to HN. Remember. Google made $9bn last quarter, mostly from online advertising. A massive amount of that (about half?) went to 3rd party websites. There's money in this game... All this post says is "Donations are successful for some value of 'success'". If it was really all that successful, I don't think all the employees would have left.
- davidw 15y ago
  What you say about reddit is true, but that doesn't necessarily meant that online advertising works, either. I've never earned more than a pittance from any of the ads on my sites.
  - speckledjim 15y ago
    Then respectfully, you're doing it wrong. There's unfortunately a lot of people who believe all you need to do is slap ads on any website and watch the money come in. It actually takes time, effort, learning, and to some extent skill to know what will work and what won't work. You either need targeted users with intent, or you need more users. Saying you can't make money from online advertising is like a non-programmer saying you can't write a tetris game. They're saying that because they haven't learnt to program yet and so it seems impossible to them. > that doesn't necessarily meant that online advertising works, either. The fact that Google paid out $4bn or whatever last quarter to 3rd party websites surely shows that online advertising works.

c1sc0 15y ago

What I liked most about the Reddit Gold program was how it shows the strength of the community: if you can pull off a 'freemium' move without actually developing significant extra features you're clearly doing something right.

acangiano 15y ago

One point that hasn't been made is that part of Reddit Gold's success is due to the fun way in which it is presented. Reddit Gold members are jokingly considered to be an ultra high-brow, elite group that hangs out in a lounge with their monocles, top hats, Bentleys, and yachts. It's a playful inside joke that makes people want to be in it, even if the actual features of a premium subscription are negligible. It's also common to have people give each others gold subscriptions in response to kind acts or as a reward for particularly insightful comments. There are lessons to be learned for those implementing the freemium business model, for sure, although I completely disagree with people who claimed that this is an indication that advertising doesn't work. Selling products or services often beats advertising (revenue wise), but there is plenty of money to be made with ads. (I speak firsthand, as I've always done well with ads.)

ghurlman 15y ago
Sounds an awful lot like the TotalFark model (and userbase attitude) that's been around for years... probably a lot of crossover there as well.
- kn0thing 15y ago
  Definitely. I'd been chatting with Drew about lessons learned from TotalFark for quite some time before Gold.
  - raldi 15y ago
    Props to the guy I'm replying to, for cultivating a community that was receptive to crazy ideas like this.
- _delirium 15y ago
  SomethingAwful has had something like that since the early 2000s as well, with some things being purely status, like paying an extra $10 to get a bigger avatar image. Also introduced as a (successful) solution to their previous lack of success monetizing via ads. (I believe, at least for a while, you could also change someone else's avatar for something like $20 or $30, and they could pay some similar amount to insure it against changes.)

cypherpunks 15y ago

I read reddit, but I would never buy a gold account. The site has too much hate speech, and it is hard to support that financially. Between the misogyny and the atheist anti-Christian bigotry, it's pretty bad. You don't have to be either a woman or a theist to see that's wrong. The question of how to address this issue while maintaining free speech is a more complex one. The reddit founders, however, have shown no interest in finding ways to improve site quality from this perspective, and indeed, appear to support the bigotry. Anyway, I bear a huge grudge against the site because they banned my account for sockpuppeting and harassment, so take all of the above with a grain of salt.

naner 15y ago
The site has too much hate speech, and it is hard to support that financially. Between the misogyny and the atheist anti-Christian bigotry, it's pretty bad. You don't have to be either a woman or a theist to see that's wrong. The site doesn't promote hate speech, it allows free speech. Also I think you're overstating things. The question of how to address this issue while maintaining free speech is a more complex one. Free speech and censorship are mutually exclusive. Reddit already has mechanisms to allow community censorship (report posts, post deletion by moderators, banning, invite-only subreddits, etc.), but paid reddit employees only step in when things get out of hand. Also the community is very fickle. Any perceived censorship by reddit employees that seems suspect and they get out the pitchforks. This has happened a few times (e.g. the Sears incident). I do think the front page could be better filtered, though. Right now the default reddit front page is pretty... weird.
- Terretta 15y ago
  To make it less weird, run something (e.g. RES) to filter out all posts linking to imgur. You'll be amazed at the difference.
  - SkyMarshal 15y ago
    RES, for anyone not in the know: http://reddit.honestbleeps.com/ http://reddit.honestbleeps.com/

tokenadult 15y ago

The real bottom-line question for Conde Nast, the company that bought out Reddit, is when does the earnings stream from Reddit begin to pay back the investment used to buy Reddit at a reasonable rate of return? I have seen NO reporting at all that refers to actual numbers and "shows the work" to demonstrate that Reddit was anything other than a losing investment for the company that bought Reddit. If anyone reading this has a link to a thorough analysis of how Reddit contributes to Conde Nast's financials, in light of the large up-front (and now sunk) cost of acquiring Reddit, I would be glad to give it a careful reading, financial calculator in hand.

scorpion032 15y ago
If a computer programmer buys a large real estate and says he hasn't got any return out of it, by not building anything, does it suggest real estate inherently is bad? It takes commitment, knowledge and a careful execution to see a site that gets over a billion page views every month, to monetize. For that, let's start with not pissing off the people who work on it, first. If conde has already paid a large sum to acquire a property, how much more, percentage terms, would it really cost to add a few more servers, a few more developers, ad-ops? If you can't pay for gas, you should think about it, even before you buy a car.