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Reddit should try honestly. "We are losing lots of money, we need to start making money, reddit gold isn't bringing in enough revenue to pay the bills. 3rd par

Reddit should try honestly. "We are losing lots of money, we need to start making money, reddit gold isn't bringing in enough revenue to pay the bills. 3rd party apps don't show ads, which costs us a lot of money every month. Keeping the 3rd party APIs up and running also costs us money. Because Reddit needs to stop losing money, we are closing down 3rd party apps." I don't know what why it is so hard to say that...

jsheard 3y ago
Reddit had an easy way out for the issue of 3rd party apps not showing ads, they already have a paid subscription which removes the ads on the official clients, so they could have made the API exclusive to users with a subscription. People would have been upset, but not this upset.
- marcolussetti 3y ago
  Honestly, I think they would have had a sizeable amount of people paying for the subscription. Now, even if they backtrack on this later on in a few months or years, they burned the good will, so I doubt developers are going invest the time to make a good Reddit client after this.
  - Alupis 3y ago
    Not at all - if anything, this opened the door for more premium Reddit apps that charge monthly - with billing being in-line with Reddit Premium.
    - Silhouette 3y ago
      It also opened the door for a more premium non-Reddit app that charges monthly and directly competes with Reddit. From everything I've seen so far there might be enough of the existing Reddit community who are upset enough with the recent direction to make that leap viable and if the reported figures are accurate then the finances might also work if enough people jump ship to establish a new community.
      - Alupis 3y ago
        Yes, but much like the "exodus" from Twitter, and others over the years - they all fail to reach critical mass. There's a very real early-mover effect, the likes of which have prevented Mastodon and even Truth from gaining huge ground. Truth, being perhaps the most interesting, because the main personality behind it sort of compelled it to be semi-well-known simply because of media coverage. The other attempts do not share that effect, however.
        Silhouette 3y ago
        They all fail to reach critical mass until someone does. That's always been the history of social networks. Once sites like Myspace and LiveJournal were everywhere. The next generation mostly went on Facebook and Facebook snapped up Instagram. Now a younger generation is on sites like TikTok. Digg and Slashdot are still going but they didn't stop Reddit becoming huge or more specialised sites with overlapping demographics (like HN for example) from building their own communities. You're right that early movers have some advantage but it's a big world and the Next Big Thing doesn't have to win the whole market on day one - only enough of it to plant seeds that can grow over time.
- Alupis 3y ago
  > they already have a paid subscription which removes the ads on the official clients Apollo is shutting down because the founder thinks they'll incur about $2.50 per month of costs per user, and apparently doesn't believe enough people will be willing to pay $5 monthly to keep Apollo running. So, this Reddit Premium (billed at $5.99 monthly) either has few-to-no paid users, or Apollo's founder isn't even trying to sustain his business.
  - phonon 3y ago
    He addresses that in the post. He only has 30 days to accommodate the price increase. What is he supposed to do about his current clients that already paid for the year? Take a huge financial loss until his updated pricing catches up? He asked for more time, they said no.
    - Alupis 3y ago
      [flagged]
      - toyg 3y ago
        I'd be similarly judgemental if Christian had been the only one to behave like this. But when you look at the field, everyone was taken by surprise by the prices. Pretty much all the major apps are closing. Were all developers hopelessly naive? All of them? I find that hard to believe.
        takeda 3y ago
        The OP didn't even bother to read the conversation. This was announced in April, but Reddit did not provide prices. It only assured this won't be as expensive as Twitter API access, and the drama started once it actually did.
      - kimixa 3y ago
        That "hope" appears to be founded on statements made to them by Reddit themselves, according to the linked post and it's communication snippets. Or at least a much larger time to recalibrate that "hope".
- bscphil 3y ago
  Aren't they effectively just offloading this whole question onto the apps? For the sake of argument, let's say what they are charging for the API is about 80% per-user of what they make for users who use the official app (and therefore see ads). I have no idea what the actual numbers are, this is just theoretical. In that case, app developers have several options: * start showing users ads, and use that to pay both themselves and Reddit * start charging a monthly fee for the app, and use that to pay both themselves and Reddit * some combination of these two (e.g. pay a subscription for ad-free use) Sure, Reddit could make this easier for app developers, but isn't it all basically the same thing at the end of the day? Reddit wants (or needs? I have no idea what their financials look like) to make a certain amount of money per-user or per page view. Apps take home ~100% of their profits currently, and make Reddit ~nothing. So Reddit is pricing in a profit rate into API access. I mean, just to look at Apollo, they have 166K ratings on the Apple App Store, and surely far more users than that. Reddit wants $20M a year from them. That's high, maybe too high, but how does it compare to the value of (say) a million users a year on the official Reddit app? If Apollo switched to a subscription model on which they charged $1 a month to users, would they be able to pay Reddit's API fees? (Assuming those API fees would drop by at least 50% after non-paying users quit using Apollo.)
  - whimsicalism 3y ago
    > I have no idea what the actual numbers are, this is just theoretical. The issue is that the actual numbers are closer to 2,000%, not 80%. [0] [0]: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/ https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...
    - MostlyStable 3y ago
      The comment you are responding to is talking about revenue, not costs. Very different.
      - whimsicalism 3y ago
        Read before correcting, I am also talking about revenue.
- Reason077 3y ago
  Exactly. In fact, Spotify works exactly like this: you can use any third-party client you like, so long as you have a Spotify Premium paid subscription. If you have a free account, you need to use the official clients with ads.
  - TremendousJudge 3y ago
    or the web client with an adblocker
    - dvngnt_ 3y ago
      shhhhh
pixl97 3y ago
Because you can't IPO for a zillion dollars and leave suckers holding the bag that way
kmac_ 3y ago
I wonder if Reddit ever considered and calculated options like showing ads, selling reddit gold and merchandise through partner apps. Maybe it could be coined into win-win-win but ended as it is.
xmprt 3y ago
Because I'm not so sure that it's true. Reddit isn't massively profitable but it also doesn't have to lose a ton of money. IIRC they were able to run a much tighter ship and operate off of just Reddit Gold and ads for at least a decade before they started this recent hypergrowth phase
- hospitalJail 3y ago
  I wonder how much of costs went up due to hosting their own images and videos. A text website is easy to run.
  - fkyoureadthedoc 3y ago
    They probably spent more money on staffing rewriting into a shitty React SPA and then trying to address its dire performance.
- paradox460 3y ago
  13 years ago, when I worked part time for them, it was about 5 people, with support being provided by Condé Nast peeps. This was right during the middle of the Digg v4 exodus to reddit. I remember when reddit got its billionth pageview month
micromacrofoot 3y ago
because they're going public, saying "we're broke, please invest" isn't going to work for them — at this point everything they do is to more or less prop up the value until everyone can cash out
taurath 3y ago
There's a step before this. They're losing a lot of money because the choices they made to take investment to earn more money. They could've gone the route of wikipedia. They could've stayed extremely lean. They took $1.3 BILLION in funding, minimum. They have 500-1000 employees. Its greed that they got here. They made choices, and then as a consequence of those choices they made choices that are significantly reducing the value they provide to their users. Its enshittification, its killing the golden goose, its destroying a public good for the benefit of investors who don't care about anything other than making a return. The worst part is the investors don't care about anything other than making the numbers look good in the short term so they can dump their investment onto other investors. Its like all of corporate america decided to watch The Wire and go "Oh see how they're pumping up the numbers to make them look good for the mayor, but not actually solving crime? THAT should be our business plan!". Providing value is a side effect of making money, on the false equivalence that making money means you're providing value, so therefore making more money means you're providing more value.
hayst4ck 3y ago
Yeah. The wikipedia approach to an online platform seems ideal. Wikipedia is pretty fantastic. Signal is pretty great. I'm pretty happy with NPR. Archive.org makes me happy. Appeal to people with money (the professional class) and then beg. I feel like the next great social media platform will result from a rich person disillusioned by reddit (a Bryan Acton type) creating a platform resistant to "next quarters profit"-ism.
- easyKL 3y ago
  Although your examples are very centralized projects, your thoughts about the next social media platform is the desired way to go.
takeda 3y ago
The fees aren't small, they also forbid 3rd party apps to show their own ads and will be blocking NSFW subreddits from API (none of those things apply to their mobile app). So ultimately they want 3rd party to use subscription model to ultimately get worse experience.

jsheard 3y ago

Reddit had an easy way out for the issue of 3rd party apps not showing ads, they already have a paid subscription which removes the ads on the official clients, so they could have made the API exclusive to users with a subscription. People would have been upset, but not this upset.

marcolussetti 3y ago
Honestly, I think they would have had a sizeable amount of people paying for the subscription. Now, even if they backtrack on this later on in a few months or years, they burned the good will, so I doubt developers are going invest the time to make a good Reddit client after this.
- Alupis 3y ago
  Not at all - if anything, this opened the door for more premium Reddit apps that charge monthly - with billing being in-line with Reddit Premium.
  - Silhouette 3y ago
    It also opened the door for a more premium non-Reddit app that charges monthly and directly competes with Reddit. From everything I've seen so far there might be enough of the existing Reddit community who are upset enough with the recent direction to make that leap viable and if the reported figures are accurate then the finances might also work if enough people jump ship to establish a new community.
    - Alupis 3y ago
      Yes, but much like the "exodus" from Twitter, and others over the years - they all fail to reach critical mass. There's a very real early-mover effect, the likes of which have prevented Mastodon and even Truth from gaining huge ground. Truth, being perhaps the most interesting, because the main personality behind it sort of compelled it to be semi-well-known simply because of media coverage. The other attempts do not share that effect, however.
      - Silhouette 3y ago
        They all fail to reach critical mass until someone does. That's always been the history of social networks. Once sites like Myspace and LiveJournal were everywhere. The next generation mostly went on Facebook and Facebook snapped up Instagram. Now a younger generation is on sites like TikTok. Digg and Slashdot are still going but they didn't stop Reddit becoming huge or more specialised sites with overlapping demographics (like HN for example) from building their own communities. You're right that early movers have some advantage but it's a big world and the Next Big Thing doesn't have to win the whole market on day one - only enough of it to plant seeds that can grow over time.
Alupis 3y ago
> they already have a paid subscription which removes the ads on the official clients Apollo is shutting down because the founder thinks they'll incur about $2.50 per month of costs per user, and apparently doesn't believe enough people will be willing to pay $5 monthly to keep Apollo running. So, this Reddit Premium (billed at $5.99 monthly) either has few-to-no paid users, or Apollo's founder isn't even trying to sustain his business.
- phonon 3y ago
  He addresses that in the post. He only has 30 days to accommodate the price increase. What is he supposed to do about his current clients that already paid for the year? Take a huge financial loss until his updated pricing catches up? He asked for more time, they said no.
  - Alupis 3y ago
    [flagged]
    - toyg 3y ago
      I'd be similarly judgemental if Christian had been the only one to behave like this. But when you look at the field, everyone was taken by surprise by the prices. Pretty much all the major apps are closing. Were all developers hopelessly naive? All of them? I find that hard to believe.
      - takeda 3y ago
        The OP didn't even bother to read the conversation. This was announced in April, but Reddit did not provide prices. It only assured this won't be as expensive as Twitter API access, and the drama started once it actually did.
    - kimixa 3y ago
      That "hope" appears to be founded on statements made to them by Reddit themselves, according to the linked post and it's communication snippets. Or at least a much larger time to recalibrate that "hope".
bscphil 3y ago
Aren't they effectively just offloading this whole question onto the apps? For the sake of argument, let's say what they are charging for the API is about 80% per-user of what they make for users who use the official app (and therefore see ads). I have no idea what the actual numbers are, this is just theoretical. In that case, app developers have several options: * start showing users ads, and use that to pay both themselves and Reddit * start charging a monthly fee for the app, and use that to pay both themselves and Reddit * some combination of these two (e.g. pay a subscription for ad-free use) Sure, Reddit could make this easier for app developers, but isn't it all basically the same thing at the end of the day? Reddit wants (or needs? I have no idea what their financials look like) to make a certain amount of money per-user or per page view. Apps take home ~100% of their profits currently, and make Reddit ~nothing. So Reddit is pricing in a profit rate into API access. I mean, just to look at Apollo, they have 166K ratings on the Apple App Store, and surely far more users than that. Reddit wants $20M a year from them. That's high, maybe too high, but how does it compare to the value of (say) a million users a year on the official Reddit app? If Apollo switched to a subscription model on which they charged $1 a month to users, would they be able to pay Reddit's API fees? (Assuming those API fees would drop by at least 50% after non-paying users quit using Apollo.)
- whimsicalism 3y ago
  > I have no idea what the actual numbers are, this is just theoretical. The issue is that the actual numbers are closer to 2,000%, not 80%. [0] [0]: https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_call_with_reddit_to_discuss_pricing_bad/ https://old.reddit.com/r/apolloapp/comments/13ws4w3/had_a_ca...
  - MostlyStable 3y ago
    The comment you are responding to is talking about revenue, not costs. Very different.
    - whimsicalism 3y ago
      Read before correcting, I am also talking about revenue.
Reason077 3y ago
Exactly. In fact, Spotify works exactly like this: you can use any third-party client you like, so long as you have a Spotify Premium paid subscription. If you have a free account, you need to use the official clients with ads.
- TremendousJudge 3y ago
  or the web client with an adblocker
  - dvngnt_ 3y ago
    shhhhh

pixl97 3y ago

Because you can't IPO for a zillion dollars and leave suckers holding the bag that way

kmac_ 3y ago

I wonder if Reddit ever considered and calculated options like showing ads, selling reddit gold and merchandise through partner apps. Maybe it could be coined into win-win-win but ended as it is.

xmprt 3y ago

Because I'm not so sure that it's true. Reddit isn't massively profitable but it also doesn't have to lose a ton of money. IIRC they were able to run a much tighter ship and operate off of just Reddit Gold and ads for at least a decade before they started this recent hypergrowth phase

hospitalJail 3y ago
I wonder how much of costs went up due to hosting their own images and videos. A text website is easy to run.
- fkyoureadthedoc 3y ago
  They probably spent more money on staffing rewriting into a shitty React SPA and then trying to address its dire performance.
paradox460 3y ago
13 years ago, when I worked part time for them, it was about 5 people, with support being provided by Condé Nast peeps. This was right during the middle of the Digg v4 exodus to reddit. I remember when reddit got its billionth pageview month

micromacrofoot 3y ago

because they're going public, saying "we're broke, please invest" isn't going to work for them — at this point everything they do is to more or less prop up the value until everyone can cash out

taurath 3y ago

There's a step before this. They're losing a lot of money because the choices they made to take investment to earn more money. They could've gone the route of wikipedia. They could've stayed extremely lean. They took $1.3 BILLION in funding, minimum. They have 500-1000 employees. Its greed that they got here. They made choices, and then as a consequence of those choices they made choices that are significantly reducing the value they provide to their users. Its enshittification, its killing the golden goose, its destroying a public good for the benefit of investors who don't care about anything other than making a return. The worst part is the investors don't care about anything other than making the numbers look good in the short term so they can dump their investment onto other investors. Its like all of corporate america decided to watch The Wire and go "Oh see how they're pumping up the numbers to make them look good for the mayor, but not actually solving crime? THAT should be our business plan!". Providing value is a side effect of making money, on the false equivalence that making money means you're providing value, so therefore making more money means you're providing more value.

hayst4ck 3y ago

Yeah. The wikipedia approach to an online platform seems ideal. Wikipedia is pretty fantastic. Signal is pretty great. I'm pretty happy with NPR. Archive.org makes me happy. Appeal to people with money (the professional class) and then beg. I feel like the next great social media platform will result from a rich person disillusioned by reddit (a Bryan Acton type) creating a platform resistant to "next quarters profit"-ism.

easyKL 3y ago
Although your examples are very centralized projects, your thoughts about the next social media platform is the desired way to go.

takeda 3y ago

The fees aren't small, they also forbid 3rd party apps to show their own ads and will be blocking NSFW subreddits from API (none of those things apply to their mobile app). So ultimately they want 3rd party to use subscription model to ultimately get worse experience.